For full report, please send an email to reginatai@alayaconsulting.com.hk

1. Survey of ESG Reports in Hong Kong 2018
An Overview
20 September 2018

2. Table of Contents
Introduction
Reporting Practices
Sustainability Governance
Environmental Disclosure
Social Disclosure
Industry Analysis
2

3. Introduction
3
The objective of this research is to identify the prevailing trend of disclosures
and identification of gaps for continued improvement. The escalating appetite of
institutional investors for ESG information is certainly one of our motivations to
keep undertaking this annual survey.
Data and analysis are based on review of public information
comprised of annual reports and stand alone ESG reports.
Looking at ESG reports of the top 200 Hong Kong listed companies
with the largest market capitalization (“T200”) as at the end of 2018
Mar.
Research Purpose
Research Scope
Methodology

4. Reporting Practices
4

5. Reporting Practices
58
39
32
6
26
GRI
GRI-Referenced
SSE
SZSE
CASS-CSR
Other reporting guidelines adopted
GRI reports takes up nearly 30%
No Mention
7%
HKEX
Only
49%
Adopted other
reporting guidelines
in addition to HKEX
44%
Reporting Standards Breakdown
Diverse reporting standards are used, especially in case of companies also listed
in China since they are obliged to follow rules of their respective stock exchanges.
Greater adherence to GRI in the future is expected. We believe by adopting the
GRI framework, companies are getting themselves ready to take actions as they
are committed to higher transparency.
Report assurance
1st Qtr 2nd Qtr
13%
Pre-assurance makes sense
Companies might find it makes financial
sense to conduct pre-assurance, in order to
scrutinize their internal systems and monitor
the accuracy of the data prior to external
assurance.
5

6. Sustainability Governance
6

7. Sustainability Governance
Board involvement – easier said than done
35%
21%
10%
34%
Board/CEO involvement in
the governance body
Board/CEO involvement
without governance body
A governance body without
Board/CEO involvement
No mention on any forms of
governance structure
7
Though there are now more companies that have established
a ESG governance body (45%, compared to last year’s 31.5%),
only 35% of the T200 have board involvement.
Having a systematic approach toward ESG management is
necessary for an effective reporting process but leadership of
the board is the crux of ESG risk management and taking up
related opportunities.
Responding is as critical as engaging stakeholders
31%
31% did not respond to key
aspects concerned by
stakeholders in the stakeholder
engagement section
As emphasized by the HKEX, companies should avoid
superficial materiality assessment and stakeholder engagement.
The process of assessment and the companies’ response to
stakeholders’ concerns should be reflected in the report.

8. Sustainability Governance
Rising alignment with SDGs
8
18%
(2017: 6%)
Top 3 SDGs aligned in T200 reports
For investors who are increasingly seeking to make positive
impact on the environment through their investments, obtaining
SDG-related insights about a company’s environmental and social
impact is definitely helpful in making more informed decisions.
A good reporting on SDGs should be forward-looking, seeking
positive change through innovative initiatives.

9. Environmental Disclosure
9

10. Environmental Disclosure
10
Narrative disclosures stop short of results achieved
The narrative KPIs, such as description of
resources conservation and emissions
reduction measures, demonstrate a high
level of disclosure (over 90%).
However, companies need to be aware that
they are required to disclose both the
measures and the results achieved.
While it seems it is relatively easy to
measure the results of energy use
efficiency measures (A2.3), over 40% of the
companies have failed to disclose results
for emissions control (A1.5), waste
reduction (A1.6) and water use (A2.4).
0% 20% 40% 60% 80% 100%
A1.5 Air emission and effluent
A1.6 Hazardous/non-hazardous
waste
A2.3 Energy usage
A2.4 Water usage
Narrative KPIs Disclosure
Measures with results achieved Disclosed measures only
No disclosure

11. Environmental Disclosure
11
Absence of an explanation is a breach of listing rule
For quantitative KPIs, T200 were found to
be more ready to disclose carbon
emissions and consumption of energy and
water than waste and air emissions.
Disclosure on packaging materials
consumption performed the worst with
3/4 of the T200 failing to report the figures.
After publication of the HKEX ESG
Analysis Report in May, it is clear that no
disclosure and absence of a proper
explanation amounts to a breach of listing
rules.
0% 20% 40% 60% 80% 100%
Air emissions & effluents (A1.1)
Carbon emissions (A1.2)
Hazardous waste generated…
Non-hazardous waste…
Energy consumption (A2.1)
Water consumption (A2.2)
Packaging materials (A2.5)
Percentage of T200
Quantitative KPI disclosure
Complied Explained Failed to comply or explain
Among the T200, about 5% of companies did not provide any form of
explanation for non-disclosure for KPI A1.2, A2.1 and A2.2, while as much as
a quarter did not do so for KPI A1.1 and A2.5.

12. Environmental Disclosure
12
Act slow in setting targets
Target-setting on carbon (12%), waste (6.5%), energy (10.5%) and water (3%) remained low.
0%
10%
20%
30%
40%
Proportionofindustry
Target-setting by industry
Carbon Waste Energy Water
Consumer
Services
Energy IT &
Telecommu
nications
Properties &
Construction
Materials UtilitiesConsumer
Goods
Conglomerates Financials Industrials

13. Social Disclosure
13

14. Social Disclosure
14
Recommended disclosure doesn’t mean
no disclosure is needed
45%
57%
38%
60.5%
52%
10%
6%
14%
22%
60%
63%
99%
92%
B1.2 Employee Turnover
B2.1 Number and rate of work-related fatalities
B2.2 Lost days due to work injury
B2.3 Occupational health and safety measures adopted
B3.2 Average training hours
B4.1 Measures to avoid child and forced labour
B4.2 Steps taken to eliminate child and forced labour
practices when discovered
B6.3 Practices to protecting intellectual property rights
B6.5 Consumer data protection and privacy policies
B7.1 Number of concluded legal cases regarding corrupt
practices
B7.2 Prevenetive measures and whistleblowing
procedures
B8.1 Focus areas of Community Investments
B8.2 Resources contributed to the community
Selected Social KPI Disclosures (Full Disclosures)
Potential social risks have been
emerging with various social changes.
Depending on the nature of business,
corporations have to deal with labour
and safety issues in the supply chain,
growing expectations of young
employees on ESG issues and cyber
threats, etc.
Despite the fact that social KPIs are
still only “recommended disclosures”,
more attention should be paid to
identifying and reporting on material
social topics.
Quantitative KPIs
Narrative KPIs

15. Social Disclosure
15
Managing risks on IPR, privacy and data security
Privacy is fundamental for all industries. Descriptions of relevant methods implemented for monitoring of privacy issues are lacking
in many of the T200 reports. This should not be overlooked especially in the digital age. Data leakage and trademark conflicts may
bring inestimable risks to the company and its stakeholders.
0% 20% 40% 60% 80% 100%
Information Technology
Consumer Goods
Financials
Industrials
Materials
Properties & Construction
Consumer Services
Conglomerates
Energy
Telecommunications
Utilities
OVERALL
KPI B6.3 Practices to protect intellectual property rights
Full Disclosure Partial Disclosure No Disclsure
0% 20% 40% 60% 80% 100%
Telecommunications
Information Technology
Financials
Consumer Services
Utilities
Properties & Construction
Consumer Goods
Energy
Materials
Conglomerates
Industrials
OVERALL
KPI B6.5 Consumer data protection and privacy policies
Full Disclosure Partial Disclosure No Disclosure

16. Social Disclosure
16
Little attention on human rights, conflict minerals and responsible sourcing
Assessing the company’s performance in human rights and
use of conflict minerals should be extended to the entire
value chain to enable better control of and response to such
risks and crises.
12% 4.5%
Human rights recognized as a
potential material aspect in the
matrix
Disclosure on conflict minerals
37%
47%
17%
Supplier assessment
Conducted, with no. of assessements reported
Conducted, no. of assessements not reported
No disclosure
Though the nature and types of suppliers vary by industries,
companies should adopt appropriate selection criteria and
assessment methods according to their material aspects.

17. Social Disclosure
17
Community Investment should go beyond philanthropy
Proactively seeking collaboration
opportunities to tackle social challenges
through making use of their own expertise
and innovations can create more value for
both the company and its stakeholders.
1%
11%
14%
26%
27%
34%
40%
45%
52%
57%
69%
85%
No mention
Others
Technological Innovation
Industry development
Elderly
Disaster Relief
Arts, culture, sports
Health care
Underpriviledged/ Social inequality
Environment
Poverty
Education
KPI B8.1 Focus area of Community Investment

18. Industry Analysis
18

19. Industry Analysis
19
Telecommunications top the list Industry-specific analysis shows that
telecommunications and utilities have
achieved higher average scores, especially
on the environmental aspects.
Industrials and properties and construction
industries have lower scores, with relatively
weak disclosures on material aspects
including occupational health and safety,
and managing climate risks at the Board
level etc.
Taking the materiality principle into serious
consideration during the reporting process
can strengthen disclosure on aspects most
concerned by stakeholders.
56.7
51.2
48.1
47.9
47.5
46.8
45.2
45.0
44.6
42.1
40.2
Telecommunications
Utilities
Consumer Services
Information Technology
Financials
Conglomerates
Materials
Consumer Goods
Energy
Properties &…
Industrials
Average ESG Score* by industry
*Alaya ESG score is based on the findings from the survey conducted by our researchers for the largest (market cap.) 200 HK listed companies.
We take into consideration of 23 scoring topics covering environmental, social and governance. Each scoring topic has been assigned a
weighting subject to the sector in which the company is classified according to the Hang Seng Industry Classification System (HSICS).

20. Selected Industry Average*
20
Scope I & II carbon emissions (Median)
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-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000
TonnesofCO2equivalent

21. Selected Industry Average*
21
Lost days due to work-related injury (Median)
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000Numberofdays
Please note social KPIs are only recommended disclosures. The limited sample size may distort the median value.
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22. Selected Industry Average*
22
Monetary donations (Median)
-
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000HKD
Please note social KPIs are only recommended disclosures. The limited sample size may distort the median value.
Powered by

23. About Alaya Consulting
Alaya is a specialist ESG consultancy focusing on ESG
reporting, pre-assurance and executive training.
We are a small organization working to create significant
impact. Since 2014, we have been in partnership with large
and emerging companies to help foster their long-term growth.

24. 谢谢！Thank you!