The Green and Sustainable Finance Cross-Agency Steering Group (Steering Group) on 20 December announced that it has entered into a collaboration arrangement with CDP, an international non-profit organisation that runs the global environmental disclosure system for companies, to jointly enhance climate data availability and sustainability reporting in Hong Kong
The Steering Group and CDP will work together to:
- enhance climate and environmental disclosure, improve data availability and accessibility in Hong Kong;
- support capacity building and upskilling, to facilitate local companies in disclosing high-quality climate and other environmental-related data in line with existing and upcoming global standards and best practice; and
- facilitate data flow, to provide financial institutions with better data resources to assess climate and environmental related risks, and supporting the real sector in the transition towards carbon neutrality.
As part of this collaboration, the Steering Group and CDP have developed a Climate and Environmental Risk Questionnaire for Non-listed companies/small and medium-sized enterprises (SMEs) (SME Questionnaire) (Note). This is a first cross-sector reporting template designed for first-time reporting corporates in Hong Kong, especially SMEs. The template comes in three versions (Annexes 1 to 3) with different level of granularity, to cater for variation in the reporting corporates’ size and sophistication. The easy-to-use template is intended to aid corporates’ sustainability reporting processes and raise their sustainability visibility to lenders, investors and supply chain clients so to better access sustainability financing. It will also facilitate financial institutions’ collection and assessment of company-level data for risk assessment and relevant business decisions.
To encourage take up, the Steering Group and CDP have developed comprehensive guidance and learning materials for the use of the template, and will arrange targeted capacity building sessions starting in Q1 2023. The Steering Group will also work with the financial institutions and industry bodies to deploy the questionnaire, facilitate data collection and encourage corporates’ adoption of the questionnaire. It is developing a data portal to collect and allow financial institutions to access relevant corporate data, subject to consent.
Eddie Yue, Co-Chair of the Steering Group and the Chief Executive, the Hong Kong Monetary Authority said, “Data is a critical factor in promoting the adoption of sustainable finance by financial institutions and corporates. With the launch of this collaboration with CDP, we are taking in important step in broadening our data effort to include SMEs, an important and previously hard-to-reach segment of our economy. We look forward to working with CDP to encourage the use of this template and further enhance Hong Kong’s sustainable finance ecosystem.”
Julia Leung, Co-Chair of the Steering Group and Acting Chief Executive Officer, the Securities and Futures Commission said, “Companies worldwide are increasingly setting climate goals and actively considering their respective decarbonisation pathways. This collaboration with CDP will enhance the availability and accessibility of comparable and reliable value chain data, which will not only benefit companies that are seeking to understand their current climate footprints and chart the way forward, but also contribute positively to the global emissions reduction agenda.”
Donald Chan, Managing Director for APAC, CDP said, “SMEs make up a significant proportion of the global economy and their activity will be essential to the net-zero transition. So, it is crucial that SMEs are equipped with the tools and resources needed to not only commit to and accelerate environmental action, but to ensure their own long-term business viability. As the world’s only independent global environmental disclosure system, CDP is committed to supporting SMEs to do so. We are delighted to partner with Steering Group on this pivotal project to drive more, and better, disclosure and action in Hong Kong and improve data quality for all real economy actors.”
Note: The SME Questionnaire is aligned with the Task Force on Climate-related Financial Disclosures (TCFD) framework. It was developed with the support of the Data Working Group under the Centre for Green and Sustainable Finance (member list). There are three versions of SME Questionnaire developed to cater for different size and need of companies. The Steering Group will continue to review and update the questions periodically with CDP’s assist, in line with global standards.
Annex 1 – Questionnaire for Micro Enterprises
Annex 2 – Questionnaire for Small Enterprises
Annex 3 – Questionnaire for Medium Enterprises
Source: Hong Kong Monetary Authority