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ESG Forum 2025, Innovation Driving a Green and Sustainable Future

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Event Recap: 

ESG Forum 2025: Innovation Driving a Green and Sustainable Future

ESG Forum 2025: Innovation Driving a Green and Sustainable Future

On November 25, 2025, in partnership with the Hong Kong Economic Journal (HKEJ), we co-hosted the “ESG Forum 2025” at the Hong Kong Convention and Exhibition Centre. Under the theme “Innovation Driving a Green and Sustainable Future,” the forum convened government officials, regulatory representatives, and industry leaders to examine how Hong Kong can harness green technology innovation and its strengths in sustainable finance to navigate geopolitical challenges and industrial restructuring. Against the backdrop of global climate action and economic recovery, the event also aimed to further consolidate Hong Kong’s role as an international green finance hub.

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Mr. Christopher Hui, GBS, JP, Secretary for Financial Services and the Treasury

Hong Kong’s position as an international green finance hub relies on four key pillars: fostering innovation, developing markets, cultivating talent, and strengthening international cooperation. The ground-breaking application of wholesale Central Bank Digital Currency (wCBDC) in settling tokenized green bonds has laid the technical foundation for interoperability across digital infrastructures. To mitigate greenwashing risks, the government’s introduction of the Hong Kong Taxonomy for Sustainable Finance carries significant value. Extending from purely “green” to include “transition” activities, this taxonomy provides precise guidance for capital allocation. Moreover, the government’s Green and Sustainable Fintech Proof-of-Concept (PoC) Funding Support Scheme is designed to overcome the “last mile” challenges in commercialization, ensuring that technological solutions effectively address real industry needs. Additionally, leveraging its deep and liquid capital markets, Hong Kong will continue to support international institutions such as the Asian Infrastructure Investment Bank (AIIB) in mobilizing funds to enhance infrastructure systems in developing countries.

Ms. Bernice Yu, Head of Operations, HKU Jockey Club Enterprise Sustainability Global Research Institute

The Hong Kong Economic Policy Green Paper, released earlier this year, dedicates a chapter to Hong Kong’s climate risks, a contribution from our research institute, which identifies typhoons and sea-level rise as two of the most critical climate threats facing the city. These phenomena are projected to trigger disasters such as flooding, posing direct threats to economic activity and public safety. In light of China’s national Carbon Neutrality Goals, ESG has transitioned from a “bonus factor” in corporate operations to a mandatory requirement that must be implemented.

However, a gap persists between corporate commitments and practical action, as businesses often face constraints such as cost pressures, technological bottlenecks, and compliance challenges. Against this backdrop, academic research must be translated into actionable commercial solutions. To support corporate transformation, our institute is now prioritizing the advancement of a key initiative: the “Sustainability Index Program.” One project under this program aims to capture public preferences regarding various ESG indicators and analyse the weighting of metrics across different ESG dimensions. This will ultimately help enterprises more effectively integrate ESG into their core values and strategies.

Highlights

Mr. Au King-lun, Executive Director of the Hong Kong Financial Services Development Council, noted that the “low-hanging fruit” in green projects has largely been harvested in recent years. He emphasized that the market must now pivot toward “transition finance,” which requires more substantial funding and entails greater technical complexity. To tackle the fragmentation in carbon market standards, he suggested that Hong Kong develop an internationally recognized carbon credit rating and trading system. Such a system would help dismantle regional barriers and promote the global flow of carbon assets.

 

Mr. Xu Haifeng, Deputy Chief Executive and Chief Risk Officer of Bank of China (Hong Kong) Limited, emphasized that building a green ecosystem depends on developing inclusive financial standards and designing taxonomies that align with international norms while reflecting Asia’s unique characteristics. In terms of product innovation, he noted that efforts should extend beyond carbon emission metrics to also encompass areas such as biodiversity, supply chain collaboration, and climate adaptation financing. Furthermore, technology-driven progress has already delivered tangible results: settlement processes have been shortened from several days to just one day. This gain in efficiency has established a convenient and transparent digital channel, enabling global investors to participate in Asia’s green transition.

 

Ms. To Pui-wai, Senior Vice President, (Sustainability) for Technology, Innovation and Entrepreneurship at Invest Hong Kong, highlighted the significant transformation in Hong Kong’s green investment landscape: the share of investment from the Chinese mainland has surged from 6% in 2000 to 22% in 2023. Moreover, she pointed out that the Chinese mainland leads the global energy storage market. Building on this trend, Ms. To stressed that Hong Kong should not only focus on “bringing in” top global green technology companies but also assist mainland enterprises with advanced technologies in “going global.” She emphasized that Hong Kong is not merely a financing hub but also the optimal gateway for mainland green technology firms to enter international markets.

Conclusions
  • Transition Finance Takes Centre Stage
    The era of exclusive green project benefits has passed. Funding must now support the transformation of high-to-abate sectors, requiring more sophisticated financial instruments and inclusive standards.
  • Digital Infrastructure Boosts Efficiency
    Tokenization, digital currency settlements, and blockchain have moved beyond pilot stages into real-world use, significantly cutting the cost of cross-border green capital flows.
  • Carbon Markets Need Bond-Style Frameworks
    To tackle market fragmentation, carbon markets should adopt a unified rating system akin to bond markets, a role Hong Kong is well-positioned to lead, given its credibility and market foundation.
  • Asia Becomes the Green Investment Hub
    As global green tech investment shifts eastward, Hong Kong can seize this momentum to bridge China’s green production capabilities with international climate finance.
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CASI Sustainability Forum: Building Capacity for a Transition Finance Ecosystem in Asia

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Event Recap:

CASI Sustainability Forum: Building Capacity for a Transition Finance Ecosystem in Asia

CASI Sustainability Forum: Building Capacity for a Transition Finance Ecosystem in Asia

On September 12, 2025, marking the conclusion of the Hong Kong Green Week, “CASI Sustainability Forum: Building Capacity for a Transition Finance Ecosystem in Asia” was successfully held. Co-organized by the Capacity-building Alliance of Sustainable Investment (CASI), the HKMA Infrastructure Financing Facilitation Office (IFFO), HKU Jockey Club Enterprise Sustainability Global Research Institute (“the Institute”), and the CFA Institute, the forum brought together over 150 in-person and nearly 300 online participants. It provided a platform for discussing practical strategies to enhance capacity building essential for Asia’s green transition, underscoring the region’s vital role as an engine of global economic growth.

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Key Pathways for Transition Finance in Asia

Given Asia’s reliance on fossil fuels and the mounting pressure on hard-to-abate sectors to transform, transition finance has emerged as a crucial mechanism for enhancing the region’s economic stability and long-term resilience. The forum’s in-depth discussions highlighted five key directions to advance transition finance across Asia:

    • Incentivize Leaders, Support Laggers. An effective low-carbon transition requires well-designed mechanisms that not only reward leading companies, for instance, through lower financing costs, but also provide concrete support to those lagging behind to reduce transition risks.
    • Promote and Adopt Clear Transition Taxonomies. A unified and standardized classification system can minimize ambiguity, lower the cost of identifying eligible transition activities, and direct capital toward economic activities genuinely committed to decarbonization.
    • Leverage Open-Source Tools to Ease Financing Barriers. Companies, especially SMEs, can use government-led carbon accounting platforms and other open-source tools to develop transition plans, facilitating easier access to transition financing.
    • Harness the Catalytic Role of Core Supply Chain Enterprises. Priority support should be given to large enterprises capable of driving change across their entire supply chains. Green supply chain finance can then extend this support to SMEs within the value chain, assisting those most in need of transition.
    • Strengthen Tangible Policy Incentives. Measures such as central bank relending facilities, capital relief programs, interest subsidies, and the promotion of low-cost clean energy in industrial parks play a crucial role in accelerating the transition.
Opening Remarks

Dr. Ma Jun

Chairman of CASI

Dr. Ma emphasized that despite global challenges in sustainable finance, Asia has become the focal point for concrete climate action. The region now accounts for 70% of the world’s new renewable energy capacity and half of all related investments, highlighting its pivotal role in the global energy transition. However, he also noted that an 80% financing gap for renewables in Asia reflects significant challenges in project development and capital mobilization.

Against this backdrop, Dr. Ma highlighted that since its establishment in 2023, CASI has expanded its network to 70 member institutions and trained over 6,500 professionals across more than 90 countries and regions. He underscored CASI’s growing role as a knowledge hub that bridges global best practices with the specific needs of emerging markets.

Prof. He expressed the delight for the Institute being the co-organizer of the CASI Sustainability Forum, which contributes to the advancement of sustainable finance in the region and helps establish a robust foundation for global collaboration. He highlighted his two representative academic research outcomes that demonstrate practical approaches to promoting corporate sustainability.

In one project, carried out in collaboration with Ant Group, a subtle “green nudging” intervention—setting “no utensils” as the default option on a food delivery platform—led to an increase of over 20 percentage points in user adoption of this eco-friendly option, implemented at minimal cost. In another study, social media was utilized to facilitate real-time public monitoring of corporate pollutant discharge, resulting in a reduction of compliance violations by more than 60%.

Prof. He used these cases to illustrate how academic research can provide scientific evidence, actionable pathways, and scalability potential to support sustainability capacity-building. He extended a warm invitation for partnerships with businesses to enhance such capacities and promote a science-based transition toward a low-carbon future, benefiting both individual enterprises and broader society.

Prof. Guojun He

The Hong Kong Jockey Club Professor in Economics, HKU Business School; Director of HKU-Jockey Club Enterprise Sustainability Global Research Institute

Dr. Ma Jun

Chairman of CASI

Dr. Ma emphasized that despite global challenges in sustainable finance, Asia has become the focal point for concrete climate action. The region now accounts for 70% of the world’s new renewable energy capacity and half of all related investments, highlighting its pivotal role in the global energy transition. However, he also noted that an 80% financing gap for renewables in Asia reflects significant challenges in project development and capital mobilization.

Against this backdrop, Dr. Ma highlighted that since its establishment in 2023, CASI has expanded its network to 70 member institutions and trained over 6,500 professionals across more than 90 countries and regions. He underscored CASI’s growing role as a knowledge hub that bridges global best practices with the specific needs of emerging markets.

Prof. Guojun He

The Hong Kong Jockey Club Professor in Economics, HKU Business School; Director of HKU-Jockey Club Enterprise Sustainability Global Research Institute

Prof. He expressed the delight for the Institute being the co-organizer of the CASI Sustainability Forum, which contributes to the advancement of sustainable finance in the region and helps establish a robust foundation for global collaboration. He highlighted his two representative academic research outcomes that demonstrate practical approaches to promoting corporate sustainability.


In one project, carried out in collaboration with Ant Group, a subtle “green nudging” intervention—setting “no utensils” as the default option on a food delivery platform—led to an increase of over 20 percentage points in user adoption of this eco-friendly option, implemented at minimal cost. In another study, social media was utilized to facilitate real-time public monitoring of corporate pollutant discharge, resulting in a reduction of compliance violations by more than 60%.


Prof. He used these cases to illustrate how academic research can provide scientific evidence, actionable pathways, and scalability potential to support sustainability capacity-building. He extended a warm invitation for partnerships with businesses to enhance such capacities and promote a science-based transition toward a low-carbon future, benefiting both individual enterprises and broader society.

Keynote Speech Takeaways

Mr. Arthur Yuen

Deputy Chief Executive of the Hong Kong Monetary Authority (HKMA)

Faced with increasingly severe extreme weather events, the transition to a sustainable future has never been more urgent. Asia, which contributes more than half of global carbon emissions, is also among the regions most vulnerable to climate change—making its transition challenges particularly acute. According to the International Monetary Fund (IMF), the region requires at least $1.1 trillion in climate investment annually, yet faces a funding shortfall of approximately $800 billion. To tackle these challenges systematically, the HKMA is committed to addressing the “four major gaps” in the market, with the goal of building an efficient and resilient transition finance ecosystem.

    • Standardization Gap
      The HKMA has launched the “Hong Kong Taxonomy for Sustainable Finance” and continues to expand its coverage to more sectors and economic activities. For the first time, it offers clear technical screening criteria to identify transition activities.
    • Readiness Gap
      The HKMA has published industry good practice cases and is developing more formal guidance to assist banks in assessing and managing client risks throughout the transition process.
    • Information Gap
      Hong Kong has announced a clear timeline for adopting the ISSB standards, enhancing the transparency and consistency of corporate climate disclosures and ensuring the availability of high-quality, comparable data for the market.

    • Talent Gap
      While sustainable finance is regarded as the largest business growth opportunity, ESG knowledge remains the most critical skills gap for the future. To address this, the “Pilot Green and Sustainable Finance Capacity Building Support Scheme” has subsidized training for over 2,600 professionals, systematically strengthening expertise in the sector.

Mr. Paul Moody began by highlighting the “paradox” of Asia’s economic development: the very sectors that have driven its growth over the past three decades—manufacturing, shipping, and agriculture—are also among the world’s largest sources of carbon emissions.
 
Today, Asia must forge a new growth path amid a warming planet. Transition finance targets hard-to-abate industries that cannot turn green overnight. Their decarbonization journey is long, uncertain, and costly. Whether supporting the managed phase-out of coal-fired power plants or enabling shipping fleets to adopt zero-carbon fuels, transition finance can serve as a critical bridge between the high-emission “today” of carbon-intensive industries and the net-zero “tomorrow”—provided such efforts are scientifically grounded and rigorously implemented.
 
Yet, transition finance in Asia faces multiple challenges: fragmented taxonomy standards, a lack of reliable emissions baselines and sectoral decarbonization pathways, as well as limited expertise among financial institutions, regulators, and companies in assessing complex transition plans. Despite these hurdles, homegrown solutions are gaining momentum. India's draft climate finance taxonomy, Singapore's blended finance partnerships, Indonesia's global carbon market integration, and ASEAN's regional transition guidelines all signal a growing consensus around credible transition finance.
 
With its deep capital markets, global connectivity, and strong regulatory reputation, Hong Kong is poised to become not only a green finance hub but also a centre for “verification and assurance” in transition finance—helping shape and lead the global sustainable development agenda.

Mr. Paul Moody

Managing Director, Global Partnerships & Client Solutions, CFA Institute

Mr. Arthur Yuen

Deputy Chief Executive of the Hong Kong Monetary Authority (HKMA)

Faced with increasingly severe extreme weather events, the transition to a sustainable future has never been more urgent. Asia, which contributes more than half of global carbon emissions, is also among the regions most vulnerable to climate change—making its transition challenges particularly acute. According to the International Monetary Fund (IMF), the region requires at least $1.1 trillion in climate investment annually, yet faces a funding shortfall of approximately $800 billion. To tackle these challenges systematically, the HKMA is committed to addressing the “four major gaps” in the market, with the goal of building an efficient and resilient transition finance ecosystem.

    • Standardization Gap
      The HKMA has launched the “Hong Kong Taxonomy for Sustainable Finance” and continues to expand its coverage to more sectors and economic activities. For the first time, it offers clear technical screening criteria to identify transition activities.
    • Readiness Gap
      The HKMA has published industry good practice cases and is developing more formal guidance to assist banks in assessing and managing client risks throughout the transition process.
    • Information Gap
      Hong Kong has announced a clear timeline for adopting the ISSB standards, enhancing the transparency and consistency of corporate climate disclosures and ensuring the availability of high-quality, comparable data for the market.
    • Talent Gap
      While sustainable finance is regarded as the largest business growth opportunity, ESG knowledge remains the most critical skills gap for the future. To address this, the “Pilot Green and Sustainable Finance Capacity Building Support Scheme” has subsidized training for over 2,600 professionals, systematically strengthening expertise in the sector.

Mr. Paul Moody

Managing Director, Global Partnerships & Client Solutions, CFA Institute

Mr. Paul Moody began by highlighting the “paradox” of Asia’s economic development: the very sectors that have driven its growth over the past three decades—manufacturing, shipping, and agriculture—are also among the world’s largest sources of carbon emissions.


Today, Asia must forge a new growth path amid a warming planet. Transition finance targets hard-to-abate industries that cannot turn green overnight. Their decarbonization journey is long, uncertain, and costly. Whether supporting the managed phase-out of coal-fired power plants or enabling shipping fleets to adopt zero-carbon fuels, transition finance can serve as a critical bridge between the high-emission “today” of carbon-intensive industries and the net-zero “tomorrow”—provided such efforts are scientifically grounded and rigorously implemented.


Yet, transition finance in Asia faces multiple challenges: fragmented taxonomy standards, a lack of reliable emissions baselines and sectoral decarbonization pathways, as well as limited expertise among financial institutions, regulators, and companies in assessing complex transition plans. Despite these hurdles, homegrown solutions are gaining momentum. India's draft climate finance taxonomy, Singapore's blended finance partnerships, Indonesia's global carbon market integration, and ASEAN's regional transition guidelines all signal a growing consensus around credible transition finance.


With its deep capital markets, global connectivity, and strong regulatory reputation, Hong Kong is poised to become not only a green finance hub but also a centre for “verification and assurance” in transition finance—helping shape and lead the global sustainable development agenda.

Summary

In the transition toward a low-carbon future in Asia, capacity building in sustainable finance acts as both a critical catalyst for regional decarbonization and a central mechanism for tackling climate change and fostering inclusive growth. As an international financial hub, Hong Kong, supported by its mature capital markets, globally integrated regulatory framework, and open economy, is increasingly recognized as a pivotal player in advancing green finance capacity building throughout the region.

Hong Kong is uniquely positioned to enhance its role as a bridge by uniting academic research and industry expertise to create cross-sector collaborative platforms. Such initiatives can accelerate capacity development, promote the alignment of standards, and pilot innovative approaches in sustainable finance—thereby helping Asian nations achieve an equitable and climate-resilient transition in line with global goals.

As a co-organizer of this forum, the Institute reaffirms its commitment to serving as an open platform for dialogue and cross-sector collaboration. Grounded in rigorous research, we will continue to translate cutting-edge insights into practical, actionable solutions, foster deeper synergies among industry, academia and broader communities, and actively support the adoption of tangible corporate sustainability practices.

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Collaborative Efforts to Accelerate Transformation: How Finance Can Boost Sustainable Development in Southeast Asia

by Event Recap

Event Recap: 

Collaborative Efforts to Accelerate Transformation:
How Finance Can Boost Sustainable Development in Southeast Asia

Collaborative Efforts to Accelerate Transformation: How Finance Can Boost Sustainable Development in Southeast Asia

On September 9, Bank of China (Hong Kong) hosted “Collaborate to Accelerate Transition: Financing Sustainable Development in SEA” in Hong Kong. The event successfully convened leaders from regulatory agencies, financial institutions, corporations, and academia to explore opportunities and challenges in advancing sustainable development across Southeast Asia.

A landmark report, titled “The Asian Way: Sustainable Finance Market Outlook in Southeast Asia (“SEA”) and the Role of Hong Kong” , was officially released during the event. Jointly produced by Hong Kong Financial Research Institute of Bank of China, the MSCI Sustainability Institute and HKU Jockey Club Enterprise Sustainability Global Research Institute, the report analyses the robust demand for sustainable finance in Southeast Asia amidst current supply shortfalls. It further highlights Hong Kong’s critical role as an international financial centre in bridging global capital with regional green initiatives.

Panellists held in-depth discussions on building a sustainable financial ecosystem adapted to regional characteristics through the “Asian way”, and explored how Hong Kong can serve as a “super connector” in facilitating this process.


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Report Takeaways

Through an in-depth analysis of survey questionnaires, Professor Jeffrey Ng, Associate Director of the Institute, emphasized in the report:

  • Investors demonstrate strong willingness and clear demand. The SEA region exhibits a robust commitment to transformation: 75% of surveyed institutions expanded their sustainable investments over the past year. Looking ahead, 86% of SEA organizations plan to invest in or finance sustainability initiatives over the next five years —well above the 70% average across all respondents. Demand is particularly strong for sustainability-linked loans, green loans, and green bonds.
  • Sustainability is increasingly becoming a critical source of corporate value, presenting both opportunities and challenges. A growing number of institutions now regard sustainable development as a strategic opportunity for growth and efficiency improvement, rather than solely a compliance obligation. According to the survey, organizations are increasingly treating sustainability as a driver for business expansion and operational optimization rather than a regulatory requirement. “Business opportunities” (66%) and “cost savings and efficiency gains” (63%) emerged as the top two motivators overall. Across all regions surveyed, the high cost of transition is widely seen as the main barrier, underscoring the practical challenge of balancing upfront investments with anticipated returns.
  • Hong Kong’s role as a leading international green finance hub is widely acknowledged. The findings reinforce its strong credibility and prominent standing, underscoring its capacity to set benchmarks, attract capital, and spearhead both regional and global sustainable finance initiatives. Around 70% of respondents recognise Hong Kong as a trusted international green finance centre that can supply their institutions with the required sustainable financial products. This favourable perception remains consistent across regions, emphasizing Hong Kong’s pivotal potential in anchoring sustainable finance development throughout Asia.
  • The way forward is clearly outlined. Market expectations for Hong Kong are high, with a particular focus on three priority areas: transition finance frameworks and instruments, a high-integrity carbon market, and tailored investment vehicles designed to address specific regional market gaps. Close to two-thirds of enterprises consider transition finance frameworks a top priority, calling for clear guidance, standardized taxonomies, and blended finance mechanisms to accelerate decarbonization in high-abatement sectors.
Discussion Highlights

During the roundtable discussion, participants examined the differing levels of ESG adoption and emphasis across global markets, noting in particular the sustained momentum and growing enthusiasm for ESG practices in emerging economies—especially across Southeast Asia. The dialogue focused on the key drivers behind this trend. Professor Jeffrey Ng underscored the following points:

  • Diverging paths in sustainable development between East and West: In some Western markets, scepticism around ESG has grown, partly due to debates over fairness in social initiatives and the economic disruptions faced by traditional industries and workers during the energy transition. In contrast, Asian markets have adopted a more pragmatic and phased approach to ESG, with greater policy consistency and stronger market engagement.
  • Key challenges in sustainability transition: Two major obstacles were emphasized. First, awareness and understanding remain limited, as the benefits of sustainable development are often long-term and less tangible in the short run. Second, the uncertainty between costs and benefits poses a fundamental hurdle—both investors and companies struggle to guarantee that substantial upfront investments will lead to commensurate economic returns.

Professor Ng introduced the concept of “sustainable sustainability,” emphasizing that the process of advancing ESG must itself be sustainable. He advocated for a steady and inclusive pathway, cautioning against overly aggressive approaches, to ensure the enduring alignment of social, environmental, and economic objectives.

Closing Remarks

Through financial innovation, policy support, and strengthened regional collaboration, Hong Kong is reinforcing its position as a green finance hub and increasingly emerging as a pivotal force in optimizing sustainable capital allocation across Asia and advancing global climate governance.

Given the considerable potential for sustainable transformation in Southeast Asia, Hong Kong—as an internationally recognized green finance centre—is strategically positioned to capitalize on emerging opportunities and bolster regional development. Looking ahead, Hong Kong can further deepen cooperation with regional and international partners to collectively accelerate Asia’s transition toward a carbon-neutral future.

Feel free to read the full report here

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The Evolution of ESG Reporting: From Transparency to Transformation, and What Lies Ahead?

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Seminar Recap:

The Evolution of ESG Reporting: From Transparency to Transformation, and What Lies Ahead?

The Evolution of ESG Reporting: From Transparency to Transformation, and What Lies Ahead?

  • ESG reporting has evolved from voluntary initiatives (since GRI’s founding in 1997) to a regulatory imperative. Yet, fragmented standards continue to challenge businesses.
  • On May 6, our Institute partnered with HKU Business School’s Accounting and Law Area to host a closed-door seminar on this critical topic. We were honoured to welcome Dr. Allinnettes Adigue, Director of GRI ASEAN Network, also the teaching affiliated member of our institute, as the keynote speaker, to share invaluable insights and sparked thought-provoking discussions with faculty and students.
  • Centered around the theme “From Transparency to Transformation: The Future of ESG Reporting and Accountability,” the discussion provided an in-depth yet accessible exploration of the evolution of ESG reporting, the core challenges it currently faces, as well as future trends and opportunities, offering intriguing observations and unique insights. Let’s revisit the key takeaways!
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Key Takeaways

1. The Evolution of ESG Reporting: From Voluntary to Mandatory, with Proliferating Standards and Growing Complexity

  • Since the establishment of the Global Reporting Initiative (GRI) in 1997, ESG reporting has evolved from voluntary initiatives to mandatory requirements in an increasing number of jurisdictions. According to ESG Book’s latest research, global ESG regulations have surged by 155% in the past decade, with 1,255 policy interventions enacted worldwide since 2011—a sharp increase from the 493 regulations recorded between 2001 and 2010[1].
  • We have also seen the emergence of key frameworks and standards, including the Greenhouse Gas (GHG) Protocol, the UN Global Compact, the Sustainability Accounting Standards Board (SASB), the Task Force on Climate-related Financial Disclosures (TCFD), and more recently, the International Sustainability Standards Board (ISSB).
  • The continuous expansion of ESG regulations reflects growing governmental emphasis on corporate environmental, social, and governance responsibilities. However, the rapid proliferation of standards has also introduced challenges—companies and regulators now face the dilemma of selecting appropriate disclosure frameworks to effectively address diverse stakeholder expectations.

2. Double Materiality: Integrating Financial and Impact Perspectives for Holistic Sustainability Disclosure

A robust ESG reporting framework typically comprises three core components: general disclosure requirements, sector-specific considerations, and theme-specific guidance—collectively enabling adaptable yet comprehensive reporting. Current standards diverge in their emphasis:

  • •     Financial Materiality (e.g., ISSB): Focuses on how sustainability issues affect corporate financial performance and long-term value creation.
  • •     Impact Materiality (e.g., GRI): Assesses an organization’s positive/negative impacts on the environment, society, and economy.

These perspectives are complementary, rather than contradictory. Adopting a Double Materiality approach provides stakeholders with a complete picture of a company’s sustainability performance, risks, and opportunities.

3. Key Challenges in ESG Reporting: From Greenwashing Risks to Data Quality

Despite significant progress, ESG reporting still faces critical challenges in disclosure practices:

  • •     Regulatory Fragmentation: Multinational corporations must navigate divergent ESG disclosure requirements across jurisdictions, often with conflicting priorities and standards, significantly increasing compliance complexity.
  • •     Heightened Technical Demands: Rising regulatory expectations, such as data accuracy, verifiability, and standardized metric calculations—create compliance hurdles, particularly for organizations lacking dedicated ESG teams.
  • •     SMEs Capacity Gaps: Systematic ESG disclosure presents unique challenges for small and medium enterprises (SMEs), as it necessitates:
    • 。    Specialized resource allocation beyond typical operational capacities
    • 。    Structural adaptations to establish data collection and verification processes
    • 。    Proportionally higher costs relative to organizational scale
  • •     Greenwashing Concerns: The growing emphasis on ESG performance has led to selective disclosure or exaggerated sustainability claims, undermining report credibility and misleading stakeholders in their decision-making processes.

4. Future Directions and Opportunities: Digitization, Harmonization, and Academia’s Role

Looking ahead, the field of ESG reporting will see several key developments.

  • •     Tech-driven disclosure efficiency: AI and digital tools are transforming data collection, analysis, and reporting workflows
  • •     Standardized Yet Strategic disclosure: The industry will enhance transparency and comparability while maintaining flexibility in corporate practices strategically, enabling companies to tailor disclosures that highlight their distinctive ESG value propositions.
  • •     Embedded ESG into decision-making: ESG factors are becoming hardwired into policies, supply chains, and investment frameworks
  • •     Academia’s empowerment: From theory-building to methodological breakthroughs – continues powering this transformation.
Closing Remarks
  • With ESG regulations multiplying, especially region- and sector-specific disclosure mandates, how can companies ensure compliance while maintaining operational flexibility? How to align with global reporting standards and at the same time, addressing unique corporate needs to demonstrate true ESG leadership, not just box-ticking?
  • These challenges demand ongoing innovation and discussion, and our seminar isn’t about solutions—it’s about cross-sector dialogue. By convening experts, we aim to spark fresh ideas at the intersection of regulation, strategy, and impact.
Acknowledgments
  • Our thanks to:
  • •     The Area of Accounting & Law faculty, HKU Business School, especially Prof. Xin WANG (Area Head, Affiliated Researcher of the Institute), Prof. Jeffrey NG (Associate Director of the Institute), and Travis CHOW.
  • •     Dr. Allinnettes Adigue for her thought-provoking insights.
  • •     All participants for driving this fruitful and interactive discussion.
References
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Healthy Cities: Opportunities and Risks in Changing Times

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What a fruitful afternoon it has been at our Distinguished ESG Lecture! We kicked off with an insightful keynote address by Prof. David Cutler from Harvard University. He then joined an esteemed panel featuring Prof. Sophia Chan, Mr. Kam Sing Wong, Prof. Eric Schuldenfrei, Mr. MK Leung, and Prof. John Klopfer, which added depth to our discussions. Our gratitude to Prof. Guojun He for setting the tone with his welcoming remarks.

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The Future of ESG Reporting: Navigating Global Standards and Regulations

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We are thrilled to announce the successful hosting of our inaugural Distinguished ESG Lecture yesterday, “The Future of ESG Reporting: Navigating Global Standards and Regulations.” , featuring esteemed keynote speakers Chair Prof. Alexander Bassen and Prof. Kerstin Lopatta, along with panel discussion members Anthony Cheung, Bien Wong, CESGA, and Karen Ho. Special thanks to Prof. Guojun He for the welcoming remarks.