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2025 Bay Area Sustainability Blueprint: From Research to Practice, how Nature Risks and Data Insights are Reshaping Sustainable Investment

by Roundtable Reflection

Roundtable Reflections:

2025 Bay Area Sustainability Blueprint: From Research to Practice, how Nature Risks and Data Insights are Reshaping Sustainable Investment

2025 Bay Area Sustainability Blueprint: From Research to Practice, how Nature Risks and Data Insights are Reshaping Sustainable Investment

Building on months of reflection, on December 4, 2025, our research institute, together with Syncicap Asset Management, and FAIRR, has once again extended this thematic workshop series, and successfully co-hosted the fifth closed-door workshop, centered on ESG data, ratings and indices. The focus of this time is: “From Research to Practice – How Nature Risks and Data Insights Reshape Sustainable Investment.”

 

The event featured keynote presentations from Ofi Invest—a leading European asset manager, FAIRR— an investor network focused on ESG risks and opportunities in the global food system, as well as academic representatives from our research institute, sharing cutting-edge research on ecosystem restoration and valuation. The workshop also brought together guests from financial institutions, NGOs, ESG data providers and consulting firms, to engage in vibrant discussions on frontier topics in sustainable finance, thereby promoting deeper integration between academic research and investment practice.

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Key Takeaways

Luisa Florez

Global Head of Research in Sustainable Finance, Ofi Invest

Insurance losses resulting from climate-related disasters are escalating, potentially creating systemic risks comparable to the 2008 financial crisis. Consequently, the core focus of ESG investing is shifting from pursuing alpha towards risk management and resilience. Investors must utilize climate scenario models for forward-looking asset allocation.

In Europe, ESG is increasingly about resilience, robustness, and how to better prepare for future risks.

Our model is guided by the principle of materiality, not morality, a motto from our founder, which emphasizes a focus on the material issues in the sectors we cover. The Protein Producer Index tracks 33 sector-specific KPIs to focus on the material risks across meat, dairy, and aquaculture… It is an interactive tool that companies can use to search, screen, and prepare for engagements.

Data-driven benchmark tools are crucial for driving a sustainable transition in the food industry.

Marcus Wilert

Interim Director of Investor Outreach, FAIRR

Bernice Yu

Head of Operations, HKU Jockey Club Enterprise Sustainability Global Research Institute

Ms. Yu presented an academic study on large-scale ecological restoration projects in China. The research revealed that over the past two decades, China has invested nearly 1 trillion RMB in ecological restoration. The associated health benefits generated by these projects are estimated at approximately 13 trillion RMB, demonstrating a substantially positive return on investment.

This proves that large-scale ecological restoration is not only environmentally significant but also represents a long-term investment with considerable returns and manageable risks.

Diversified Insights

Topic 1: From Pledges to Integrity: New Frontier in Addressing Transitional Greenwashing

  • Attendees broadly concurred that the discourse on sustainable investment has evolved: the central question is no longer whether companies make commitments, but rather the credibility of those pledges and the integrity with which they are carried out.
  • The market is returning to ‘pragmatism’, with scrutiny now focused on operational details such as technology dependency and the credibility of capital expenditure plans.
  • Many Asian companies exhibit a strong results-oriented approach to ratings, which may lead them to overlook underlying risks in pursuit of high scores, thereby increasing their susceptibility to accusations of greenwashing.
  • The lack of uniform ESG benchmark methodologies gives rise to disparate rating tools, creating confusion for investors.
  • Inconsistent and nontransparent corporate disclosures in emerging Asian markets present a primary obstacle to verifying the authenticity of company commitments.

Topic 2: The True ‘Test’: How Governance Turns Social Promises into Practice

  • The founder’s values directly determine the level of a company’s investment in employee welfare and labor rights, far outweighing the significance of public policies.
  • In the diverse markets of Asia, an appropriate communication strategy is essential to effectively encourage suppliers to adopt higher social standards, such as improved animal welfare.
  • Any transition must be premised on the ‘just transition’. Particularly in China, where social equity serves as the cornerstone of sustainable development, it should never be overlooked.

Topic 3: Rethinking ‘Value’: the New Calculus of Returns and Impact

  • Impact investors must possess the ‘willingness to pay’ by accepting potentially lower expected returns, though this does not necessarily equate to an inevitable sacrifice in actual realized returns.
  • Taking the example of ‘green roof’ research in architecture, although the initial financial costs are higher, the long-term environmental benefits and social value they generate are substantial.
  • From a strategic corporate perspective, a growing number of companies are recognizing that ESG is not merely a compliance cost but a strategic opportunity to drive innovation, access new markets, and ultimately achieve long-term financial returns.
Closing Remarks

Sustainable finance is undergoing rapid maturation, evident in the evolution of its frameworks, methodologies, and practical applications. Market attention is shifting from broad aspirational commitments toward assessing the feasibility and credibility of corporate transition plans. Investors are increasingly looking beyond high-level policy statements to scrutinize concrete capital allocation strategies, evaluate the maturity of technology roadmaps, and verify the track records of companies in fulfilling past pledges.

 

A key insight emerging from the discussion is that superficial ESG practices often originate from inadequate top-down leadership. Whether rooted in foundational corporate values or reinforced through incentive structures that link executive compensation to ESG metrics—such as employee well-being and supply chain management—meaningful advancement requires the integration of sustainability into the very fabric of corporate governance. Only by establishing robust internal mechanisms can companies transcend mere compliance and authentically embed sustainability into their organizational culture.

 

Concurrently, the financial materiality of natural capital is being systematically reappraised. Climate-related physical risks are intensifying pressure on sectors like insurance, while large-scale ecosystem restoration offers considerable long-term investment potential. These trends underscore those natural factors can no longer be treated as externalities; they are now material financial variables with direct impacts on corporate balance sheets. This realization is progressively shifting investment frameworks away from conventional models and toward more integrated approaches that incorporate long-term resilience and sustainability.

Guests List

Once again, we extend our sincere gratitude to our co-organizers—Syncicap Asset Management and the FAIRR, for not only making this closed-door roundtable possible, but also for sharing cutting-edge industry practices with us all.

 

We also deeply appreciate the participation of all guests in discussion. Thank you for your active engagement, thoughtful contributions, and the valuable insights you brought to the conversation (listed below in alphabetical order by organization name):

  • Beijing Trans FinTech Ltd
  • Friends of the Earth (HK)
  • HKU Business School
  • HKU Faculty of Architecture
  • Lever Foundation
  • Moody’s
  • Ofi Invest
  • SHERO Inspire
  • Sumitomo Mitsui DS Asset Management
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Bridging Gaps, Building the Futures: Modern Governance and Evidence-Based Strategies for Hong Kong’s Philanthropic Sector

by Roundtable Reflection

Roundtable Reflections

Bridging Gaps, Building the Futures: 

Modern Governance and Evidence-Based Strategies for Hong Kong’s Philanthropic Sector

Bridging Gaps, Building the Futures:

Modern Governance and Evidence-Based Strategies for Hong Kong’s Philanthropic Sector

Hong Kong has a rich history of philanthropy, with non-governmental organizations (NGOs) playing a vital role in addressing environmental protection, social welfare, and community needs. However, as these needs become more diverse and specialized, the sector faces growing challenges. NGOs must now meet higher donor expectations for accountability, while improving both service delivery and impact measurement.

While the sector has demonstrated measurable progress in recent years, persistent structural limitations continue to affect its development trajectory: inconsistent disclosure standards, suboptimal governance mechanisms, uneven distribution of professional training resources, and underdeveloped impact measurement frameworks. These challenges somewhat constrain the sector’s sustainable development.

To address these challenges, our institute organized a closed-door roundtable discussion on August 15th that assembled distinguished academics, seasoned non-profit executives and practitioners with extensive field experience. Through candid conversations, participants examined how innovative governance approaches and robust impact measurement could help Hong Kong’s philanthropic sector – and those across Asia – become more transparent, efficient, and impactful.

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ISSUES ADDRESSED
  • How can NGOs systematically strengthen transparency and accountability practices?
  • How can organizations develop robust impact measurement frameworks using empirical data to demonstrate operational efficiency and social value?
  • How might NGOs adapt governance models to ensure decision-making better reflects beneficiary needs?
  • How can NGOs use digital tools to build data systems for more precise program delivery and impact measurement?
  • How can NGOs cultivate diversified, sustainable funding streams to ensure long-term viability?
HIGHLIGHTS

Dr. Annelotte WALSH

Director of Research at the Centre for Asian Philanthropy and Society (CAPS)

Dr. Walsh began by presenting findings from the CAPS biennial “Doing Good Index” report. The index, covering 17 Asian economies since its 2018 launch, provides multidimensional analysis of regional philanthropic ecosystems, including Hong Kong’s unique position and performance. She emphasized the non-profit sector’s urgent need to enhance financial transparency and adopt accountability standards comparable to commercial enterprises.

Regarding technological applications, Dr. Walsh examined both the potential and implementation challenges of AI and other innovations in addressing social issues, highlighting variations in technology adoption across organizations. She highlighted three key priorities: (1) enhancing due diligence practices, (2) establishing clear communication mechanisms for impact measurement, and (3) deepening industry-wide discussions on philanthropy’s evolving role.

Drawing from legal expertise and practical experience, Prof. Bishop identified common challenges facing NGOs: inadequate transparency, insufficient financial disclosure, the absence of government-maintained authoritative registration platforms, as well as issues with data-sharing mechanisms and impact measurement. He noted that some funders maintain conservative attitudes toward digital tools, while existing free solutions remain underutilized due to operational complexity or capacity gaps — highlighting the urgent need for technological capacity building.

Regarding randomized controlled trials (RCTs) as a potential solution, Prof. Bishop acknowledged their value while noting limitations in fully capturing the outcomes of social programs. He advocated for the enhanced transparency, integrated technological innovation and application, and the development of diversified evaluation methodologies, which are critical for improving operational effectiveness and credibility in the NGO sector.

Prof. David BISHOP

Associate Professor of Teaching, HKU Business School
Associate Director, HKU Jockey Club Enterprise Sustainability Global Research Institute

Prof. Guojun HE

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

Prof. He elaborated on the Institute's systematic approach to enhancing sustainability in the philanthropic sector, emphasizing how structured training programs are driving standardization and sustainable development across the industry.

Specifically, Prof. He shared his research team’s findings on utilizing volunteer monitoring and RCTs to improve corporate environmental compliance, highlighting the practical value of transparency and accountability mechanisms. Addressing the real-world challenges Hong Kong NGOs face in transparent data collection, he proposed three key solutions:
•     Implementing incentive-compatible information disclosure mechanisms
•     Providing systematic RCT methodology training for NGOs
•     Exploring innovative applications of AI technology to optimize operational efficiency

Dr. Lu shared insights drawn from both academic research and practical experience on guiding NGOs to adapt to ESG trends, while examining institutional logic and philanthropic scalability. He previously leveraged social media platforms to mobilize altruistic initiatives and promote greater financial transparency in NGO disclosures.

Dr. Lu emphasized the critical importance of public disclosure in non-profit trust and fund management, advocating for evidence-based approaches using RCTs to evaluate program effectiveness. Addressing data management challenges, he noted that improved practices can enhance operational and reporting quality — though not all organizations necessarily require complex systems implementation.

Dr. Ke LU

Lecturer, HKU Department of Social Work and Social Administration

Mr. Kyrus SIU

Director in Greater China region, The Social Investment Consultancy (TSIC)

Drawing from his professional background in grant due diligence, NGO board experience, and international collaborations, Mr. Siu emphasized the critical importance of clearly defining NGOs and establishing robust impact measurement frameworks. He observed that Hong Kong NGOs tend to prioritize stable revenue streams over public funding, which consequently reduces their incentives for information disclosure — particularly when transparency and reporting are most crucial for government-funded initiatives.

He noted that NGOs are commonly constrained by outdated systems and a lack of collaboration, which impedes resource and data sharing. He called on funders to allocate budgets for technology and system upgrades, while emphasizing how capacity building is critical for enhancing impact.

With her dual expertise in operations management and non-profit collaboration, Ms. Pow presented case studies of cost-saving partnerships among small and medium NGOs. She highlighted fundamental differences between NGOs and private sector entities in terms of goal-setting and organizational understanding. Ms. Pow enhances NGO governance frameworks through three key approaches: professional training programs, strategic advisory services, and resource integration. She emphasizes that transparency, well-defined objectives, and efficient resource utilization pose particular challenges amidst policy changes impacting funding allocation. She urges NGOs and funders to strengthen collaboration by: Concentrating efforts in areas where they can deliver maximum impact, Enhancing Disclosure Practices, and Optimizing Resource Allocation.

Ms. Stephanie POW

Program Director, Asian Charity Services (ACS)

Dr. Annelotte WALSH

Director of Research at the Centre for Asian Philanthropy and Society (CAPS)

Dr. Walsh began by presenting findings from the CAPS biennial “Doing Good Index” report. The index, covering 17 Asian economies since its 2018 launch, provides multidimensional analysis of regional philanthropic ecosystems, including Hong Kong’s unique position and performance. She emphasized the non-profit sector’s urgent need to enhance financial transparency and adopt accountability standards comparable to commercial enterprises.

Regarding technological applications, Dr. Walsh examined both the potential and implementation challenges of AI and other innovations in addressing social issues, highlighting variations in technology adoption across organizations. She highlighted three key priorities: (1) enhancing due diligence practices, (2) establishing clear communication mechanisms for impact measurement, and (3) deepening industry-wide discussions on philanthropy’s evolving role.

Prof. David BISHOP

Associate Professor of Teaching, HKU Business School
Associate Director, HKU Jockey Club Enterprise Sustainability Global Research Institute

Drawing from legal expertise and practical experience, Prof. Bishop identified common challenges facing NGOs: inadequate transparency, insufficient financial disclosure, the absence of government-maintained authoritative registration platforms, as well as issues with data-sharing mechanisms and impact measurement. He noted that some funders maintain conservative attitudes toward digital tools, while existing free solutions remain underutilized due to operational complexity or capacity gaps — highlighting the urgent need for technological capacity building. Regarding randomized controlled trials (RCTs) as a potential solution, Prof. Bishop acknowledged their value while noting limitations in fully capturing the outcomes of social programs. He advocated for the enhanced transparency, integrated technological innovation and application, and the development of diversified evaluation methodologies, which are critical for improving operational effectiveness and credibility in the NGO sector.

Prof. Guojun HE

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

Prof. He elaborated on the Institute's systematic approach to enhancing sustainability in the philanthropic sector, emphasizing how structured training programs are driving standardization and sustainable development across the industry. Specifically, Prof. He shared his research team’s findings on utilizing volunteer monitoring and RCTs to improve corporate environmental compliance, highlighting the practical value of transparency and accountability mechanisms. Addressing the real-world challenges Hong Kong NGOs face in transparent data collection, he proposed three key solutions:

  • Implementing incentive-compatible information disclosure mechanisms
  • Providing systematic RCT methodology training for NGOs
  • Exploring innovative applications of AI technology to optimize operational efficiency

Dr. Ke LU

Lecturer, HKU Department of Social Work and Social Administration

Dr. Lu shared insights drawn from both academic research and practical experience on guiding NGOs to adapt to ESG trends, while examining institutional logic and philanthropic scalability. He previously leveraged social media platforms to mobilize altruistic initiatives and promote greater financial transparency in NGO disclosures.

Dr. Lu emphasized the critical importance of public disclosure in non-profit trust and fund management, advocating for evidence-based approaches using RCTs to evaluate program effectiveness. Addressing data management challenges, he noted that improved practices can enhance operational and reporting quality — though not all organizations necessarily require complex systems implementation.

Mr. Kyrus SIU

Director in Greater China region, The Social Investment Consultancy (TSIC)

Drawing from his professional background in grant due diligence, NGO board experience, and international collaborations, Mr. Siu emphasized the critical importance of clearly defining NGOs and establishing robust impact measurement frameworks. He observed that Hong Kong NGOs tend to prioritize stable revenue streams over public funding, which consequently reduces their incentives for information disclosure — particularly when transparency and reporting are most crucial for government-funded initiatives.

He noted that NGOs are commonly constrained by outdated systems and a lack of collaboration, which impedes resource and data sharing. He called on funders to allocate budgets for technology and system upgrades, while emphasizing how capacity building is critical for enhancing impact.

Ms. Stephanie POW

Program Director, Asian Charity Services (ACS)

With her dual expertise in operations management and non-profit collaboration, Ms. Pow presented case studies of cost-saving partnerships among small and medium NGOs. She highlighted fundamental differences between NGOs and private sector entities in terms of goal-setting and organizational understanding. Ms. Pow enhances NGO governance frameworks through three key approaches: professional training programs, strategic advisory services, and resource integration. She emphasizes that transparency, well-defined objectives, and efficient resource utilization pose particular challenges amidst policy changes impacting funding allocation. She urges NGOs and funders to strengthen collaboration by: Concentrating efforts in areas where they can deliver maximum impact, Enhancing Disclosure Practices, and Optimizing Resource Allocation.

KEY TAKEAWAYS

The in-depth discussions yielded several actionable insights for advancing Hong Kong’s philanthropic sector toward sustainable development:

Evidence-Based Program Evaluation

Adopting scientific methods like randomized controlled trials (RCTs) enhances assessment objectivity and credibility, creating a robust evidence base for strategic decision-making.

Cross-Sector Collaboration Framework

Establishing stable, complementary partnerships with universities, research institutions, and government bodies fosters knowledge sharing and resource synergy.

Innovative Funding Model

New financing approaches should balance operational flexibility with long-term stability, mitigating over-reliance on single funding sources.

Technology-Enabled Impact Monitoring

AI and digital tools can improve impact measurement precision and timeliness, while strengthening program optimization and stakeholder communication.

Organizational Capacity Building

Systematic improvements in leadership, technical competencies, and management systems form the foundation for resilience and sustained social impact.

CLOSING REMARKS

The closed-door meeting not only facilitated the exchange of practical experiences but also revealed deeper systemic challenges facing the sector. It exposed fundamental issues such as misaligned incentive mechanisms – NGOs relying on private donations lack sufficient motivation for comprehensive disclosure, while outdated IT systems coupled with funders’ persistent neglect of “administrative costs” have exacerbated data fragmentation and created collaboration barriers. These discussions have prompted more fundamental reflections. We firmly believe these open questions that emerged through our rigorous dialogue represent new starting points for driving a more meaningful industry transformation in the future.

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2025 Bay Area Sustainability Blueprint: Decoding Sustainability Data, AI Innovations and Practical Implementations

by Roundtable Reflection

Roundtable Reflections:

2025 Bay Area Sustainability Blueprint: Decoding Sustainability Data, AI Innovations and Practical Implementations

2025 Bay Area Sustainability Blueprint: Decoding Sustainability Data, AI Innovations and Practical Implementations

On April 16, 2025, jointly organised by our institute and Caijing Dushu, the closed-door workshop “2025 Bay Area Sustainability Blueprint: Decoding Sustainability Data, AI Innovations and Practical Implementations” was successfully held at the main campus of the University of Hong Kong.

Building on the practical challenges and pain points identified in the previous session, for this time, the workshop brought together representatives from both internationally and domestically renowned data service providers, and third-party institutions, alongside the scholars from our institute, to explore pathways for enhancing the value of sustainability data products and the innovative applications of AI technology. This discussion delved deeply into the impact of geopolitical factors and the anti-ESG movement on rating methodologies, as well as the breakthroughs and limitations of AI in ESG data products R&D and practices.

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Issues Addressed
  • Will shifting geopolitics (e.g., Trump effect) reshape existing ESG rating systems? (e.g., altering indicator selection or weightings adjustments)
  • Does anti-ESG sentiment hinder ESG data adoption?
  • What is the future market demand for sustainability data? Industry observations vs. Academic perspectives
  • How to rate companies with diversified business lines?
  • Filling “N/A fields” in corporate ESG disclosures – solutions?
  • AI’s role in ESG disclosure: catalyst or cosmetic?
  • Can AI fully automate ESG data collection or verification?
  • Does AI-generated ESG reporting make greenwashing easier?
  • AI in ESG data today: practical applications & untapped potential?
Guests Highlights

Geopolitics, Anti-ESG Movements & Methodology Adjustments

Dequan Wang

Founder & Chief Executive Officer of Governance Solutions Group

Current market attention is increasingly shifting toward specific indicators and tailored analyses that reflect a company’s adaptability in a changing global landscape, supply chain resilience, and climate preparedness. It is important to adapt to the characteristics of different industries and different demands from investors.

Geopolitical shocks have a significant impact on specific industries, such as those with high carbon emissions or heavy reliance on overseas markets. This necessitates dynamic adjustments to relevant indicators and their weightings in ESG rating systems to accurately reflect risks.

Shuangbo Shen

Director of ESG Ratings and Data Center at China Cheng Xin,

Chief Operating Officer of

China Cheng Xin Green Finance International (CCXGFI) Co., Ltd

Aaron Wei

Director of ESG Business Management

at Fitch Ratings

Amid a complex environment, the core of sustainable rating methodologies should remain relatively stable, focusing on delivering clear, comparable, and pricing-anchored assessments, to provide consistent and transparent conclusions.

As long as carbon emissions persist, climate risk remains. Despite the US government’s reversal on climate policies, physical risks exist, objectively. And that means the lasting demand for data, assessments and ratings.

Cheng Bi

Chief Technology Officer 

& Co-founder of Youjivest Technology

Market Trend and Emerging Data Needs

Zongwen Fu

Assistant General Manager of the Hong Kong Quality Assurance Agency

Market demand is shifting from single, finalised rating scores towards diversified data products and solutions. Investors and companies are increasingly focusing on the accessibility of underlying data, the transparency of methodologies, and in-depth analytical capabilities for specific themes (e.g., climate risk, sustainability strategies).

As the application of sustainability information deepens, corporate data governance capabilities have become critical. There is significant growth in demand for data governance tools and professional services that support internal management and meet complex external disclosure requirements (e.g., ISSB, ESRS).

Haoming Xin

Director of Sustainability of CECEP Environmental Consulting Group Limited

Fei Wang

Marketing Director of the Macao International Carbon Emission Exchange

Current challenges in carbon trading include verification and validation of carbon credit quality. The US withdrawal from the Paris Agreement has accelerated demand in voluntary carbon markets for high-quality credit products, such as carbon removals. Regarding carbon market allocation mechanisms, the international approach adopts a cap-and-trade system, while China employs a dynamic carbon intensity-based allocation model. This reflects differing pathways in climate issues between developed and developing nations, highlighting the need to monitor risks arising from divergent practices.

AI Technology Applications, Challenges, and Breakthroughs

Data coverage, accuracy, timeliness, and verifiability remain the key bottlenecks in ESG data. Regulatory mandatory disclosure requirements and AI adoption are critical drivers for improving both the quantity and quality of data supply.

Xiangfeng Liu

Founder & Chief Executive Officer of QuantData

Hailiang Chen

Director of the Artificial Intelligence Research Institute, Assistant Dean (Taught Postgraduate), Professor in Innovation and Information Management at the HKU Business School, Affiliated researcher in HKU Jockey Club Enterprise Sustainability Global Research Institute

AI’s potential in financial analysis coexists with its current limitations. As an assistive tool, AI can efficiently process sustainability-related data and conduct sentiment monitoring. In legal research, AI could enable rapid retrieval of civil case rulings. However, in high-stakes areas, such as investment decision-making and regulatory compliance, AI-generated data biases could pose significant risks and should be adopted with precaution.

Key Takeaways

Balancing Consistency and Agility in ESG Ratings Methodology

The trade-off between consistency and agile adjustments in ESG ratings is crucial. While ESG metrics and weightings must adapt to external changes, maintaining the long-term consistency of core methodologies is essential. In today’s geopolitical complexity and escalating climate crises, rating agencies should create resilient assessment frameworks that are responsive to external risks and evolving definitions of sustainability. Future ESG data products will need to strategically balance consistency with flexibility, as well as standardization with customization.

Today’s go-to model: AI Enhances Speed, Human Oversight Ensures Quality

AI significantly accelerates tasks like data extraction, processing, preliminary analysis, and report generation, delivering cost and efficiency gains. However, it has limitations in interpreting complex graphics, verifying information authenticity, avoiding tautologies, processing unstructured data, and ensuring accuracy in critical areas. In ESG data applications, AI acts as an efficiency tool, while final validation and quality control are entrusted to experienced professionals.

Bridging academia and industry for sustainable innovation

Academic research can provide rigorous theoretical frameworks, methodological validation, and impact measurements for ESG data, ratings, and indices. Meanwhile, industry offers real-world applications, data feedback, and practical demands, that drive iterative improvements. This relationship—where theoretical advancements inform practice, and real-world challenges refine theory—can be vital for fostering a robust sustainability ecosystem.

We are so delighted to gather industry experts and academia scholars, to share cross-sectoral insights, observations, and innovative approaches. Our institute will also host more thought-provoking events. Stay engaged and we look forward to more people joining us in more fruitful and insightful dialogues!

Closing Remarks

In today’s volatile environment—shaped by geopolitical shifts, the anti-ESG movement, and rapid AI advancements, the development, application, and promotion of sustainability data, ratings, and indices, all face unprecedented challenges, but untapped potential as well. While ESG data products proliferate with diversified market demand, critical questions remain: How can we develop meaningful data products? How do we harness AI’s full potential to empower decision-makers? How can we jointly drive tangible progress in sustainability?

 

We are so delighted to gather industry experts and academia scholars, to share cross-sectoral insights, observations, and innovative approaches. Our institute will also host more thought-provoking events. Stay engaged and we look forward to more people joining us in more fruitful and insightful dialogues!

About the Event

The Greater Bay Area emerges as a key player in the global ESG landscape by advancing sustainable development through multi-sector collaboration, green finance innovation, and regional integration.

Our Greater Bay Area development blueprint theme will feature a series of events, inviting distinguished academics and industry guests to discuss the practical issues encountered in promoting sustainable development in the Greater Bay Area through seminars, closed-door discussions, etc. Building on the practical challenges and pain points identified in the previous session, this time, we brought together experts from both internationally and domestically renowned data service providers, and third-party institutions, alongside the scholars from our institute, to explore pathways for enhancing the value of sustainability data products and the innovative applications of AI technology.

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Our reflection_thumbnail_esg index

2025 Bay Area Sustainability Blueprint: Divergence, Use, and Practices of Sustainability Index and Ratings

by Roundtable Reflection

Roundtable Reflections:

2025 Bay Area Sustainability Blueprint: Divergence, Use, and Practices of Sustainability Index and Ratings

2025 Bay Area Sustainability Blueprint: Divergence, Use, and Practices of Sustainability Index and Ratings

In our Bay Area Sustainability Blueprint Series, on March 19th, our institute collaborated with Caijing Dushu to host a closed-door workshop focused on “Divergence, Use, and Practices of Sustainability Index and Ratings.” The workshop examined the challenges of applying ESG ratings in real-world contexts, bringing together renowned scholars specialising in sustainability index research and representatives from financial institutions. Academic experts presented case studies highlighting differences in rating frameworks and indicators, while industry representatives shared their challenges in using sustainability data for investment decisions. The workshop explored potential strategies for optimising rating models through collaborative efforts between academia and industry, aiming to enhance the value of ESG indices and data.

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Issues Addressed
  • How do investors utilise ESG ratings and indices in practice?
  • Do the ratings accurately reflect a company’s sustainability capabilities? Does higher rating result consistently correlate with better financial performance?
  • What challenges arise when using ESG ratings? And how do these issues impact investment decision-making?
  • Is the market’s response to ESG ratings overly optimistic or pessimistic?
  • How do ESG ratings influence corporate strategies and operations? Do their ESG actions are “rating-driven” or striving for “substantive improvements”?
  • How do scholars see ESG indices and ratings?
  • How are international and domestic regulations driving companies to improve information disclosure and data quality? And meanwhile, how are rating agencies adapting to the evolving regulatory requirements?
  • How could academic research contribute to index and ratings with innovative perspectives or potential solutions?
Key Takeaways
  • Sustainability disclosure is becoming increasingly standardised and mandatory worldwide, yet notable divergence persist between domestic and international frameworks. Third-party rating agencies exhibit divergent priorities, particularly in social dimension indicators, data collection mechanisms, and weighting methodologies. Enhanced transparency is critical for informed decision-making.
  • Improving data quality remains a central challenge for ESG ratings. A robust data foundation is regarded as a pivotal breakthrough for the optimisation of rating and indices. Given that the ESG data disclosure of Chinese listed companies is neither comprehensive nor uniform in quality, regulatory authorities have been enhancing policy guidance to improve the quality of disclosures. The existing ESG rating systems still exhibit deficiencies in methodology, data transparency, and evaluation criteria. In the future, there is a need to construct a “white box” rating system that is both scientifically rigorous and transparent—one that aligns with international standards while also taking into account the unique characteristics of the Chinese market.
  • Sustainable investment decision-making relies on the integration of multidimensional information. Compared with Europe and the U.S., China’s sustainable investments prioritise Alpha generation over risk management, with stronger market preference for thematic ESG products. This reflects the characteristics in specific stage of market development, and underscores the need for public education on ESG frameworks. Future opportunities lie in leveraging text analytics and algorithms to extract predictive ESG signals from public disclosures for portfolio construction.
  • Investors seek to understand the specific methodologies and data sources behind ratings to better interpret ESG signals, thereby reducing the risk of information asymmetry in their investment decisions. While asset managers purchase ESG ratings, they prioritise analysing underlying data over relying on final scores. Investors demand transparent, traceable raw data to develop customised internal rating systems, and adjust strategies considering the sector-specific and risk preferences.
  • Researchers in our institute have been leveraging their research expertise to advance sustainability indices with innovative approaches:
    • Prof. Guojun He: Eliciting public preferences on various ESG dimensions
    • Prof. Hailiang Chen: Leveraging advanced data analytics techniques in ESG information
    • Prof. Sara Kim & Prof. Tuan Quang Phan: Addressing the gap between consumer perceptions and corporate actions
    • Prof. Chao Ren: Measuring carbon footprints (Scope1, 2, 3) at the community level
    • Prof. Alan Kwan: Measuring the intensity of a firm’s attention to specific ESG issues
Closing Remarks

Sustainability indices and ratings are becoming increasingly significant in the business environment, serving as crucial references for investment and decision-making. However, the rating systems still face challenges in standardisation and transparency, affecting their credibility. The advancement of sustainable investment and practices relies on the collective efforts of regulators, industry players, and academia. We look forward to more deep dialogues with industry experts and will keep sharing the latest research findings from academic scholars.

About the Events

The Greater Bay Area emerges as a key player in the global ESG landscape by advancing sustainable development through multi-sector collaboration, green finance innovation, and regional integration.

Our Greater Bay Area development blueprint theme will feature a series of events, inviting distinguished academics and industry guests to discuss the practical issues encountered in promoting sustainable development in the Greater Bay Area through seminars, closed-door discussions, etc. In this session, we invited academic guests to share research frontiers and gather an understanding of the challenges encountered by data users (namely financial institutions). In the next session, we will invite ESG data providers to discuss the issues of the current methodology and areas for improvement, addressing pain points and promoting the “white box” of sustainable development indices and ratings. Please stay tuned for our sharing sessions in April!

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2025 Inaugural ASU-HKU Interdisciplinary Conference- ESG Index Development and Methodology

by Roundtable Reflection

Roundtable Reflections:

2025 Inaugural ASU-HKU Interdisciplinary Conference-
ESG Index Development and Methodology

ESG indices and ratings have become essential tools in decision-making, yet the industry is currently mired in confusion. Discrepancies in results among different rating agencies obscure investors’ perspectives, creating more difficulties than conveniences for ESG investments. This inconsistency among diverse rating agencies also introduces uncertainty into the investment landscape.


To harness academic expertise and share cutting-edge research, our institute successfully hosted a panel discussion in the 2025 Inaugural ASU-HKU Interdisciplinary Conference on January 16-17. Alongside international leading scholars, we were delighted to have ESG index experts participate in the engaging discussion about these pressing issues. Let’s take a moment to reflect on the highlights of our dialogue!

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Issues Addressed
  • Why and how do ESG rating agencies use different methods for indicators and weights? What is the logic behind it?
  • Can ESG ratings serve as a guiding beacon for investors and corporates decision-making?
  • With discrepancies in company ESG scores raising market concerns, how should we cautiously interpret and use these ratings?
  • How can academia contribute to ESG ratings?
Key Takeaways
  • ESG indices and ratings should not be considered a “cure-all.” Different ESG rating agencies produce varying results based on their specific evaluation criteria and focuses. Users need to clearly define their objectives and understand the context when using ESG data.
  • Despite being quantitative, linking ESG indices to actual company valuations is complex. Several factors contribute to this, including the subjective nature of metrics, the lack of standardization in reporting, time lags before ESG initiatives impact financial performance, and a market tendency to prioritize short-term financial metrics over long-term ESG benefits.
  • Alternative data can offer fresh insights into key ESG indicators. Unlike traditional methods that extract extensive data from ESG reports, alternative data can capture critical ESG metrics more effectively by analyzing the relationship between negative news and investor behavior.
  • ESG indices and ratings continue to influence global financial markets. Despite the existing discrepancies, ESG financial products have been gradually adopted globally. These indices and ratings help enhance public understanding and promote ESG initiatives.
  • Concerns over rating divergence and methodology “black-boxes” in ESG data. Concerns about rating divergence and the opaque methodologies behind ESG data have led to scepticism in the market. This lack of transparency raises questions about the reliability of ESG ratings.
  • ESG data quality has room for improvement, especially when compared to financial data. Currently, ESG data often falls short in supporting key decision-making, highlighting the need for better standardization, structuring, and verifiability.
  • Collaboration between academia and industry holds great potential. By combining rigorous academic research with practical experience, feasible solutions can be developed for governments to implement ESG initiatives from a top-down perspective.
Closing Remarks

ESG progress and practices relies on the collaborative efforts of regulators, industry, and academia. We expect our academic conference as a platform, where we can not only learn about cutting-edge research from leading global scholars, but also actively engage in in-depth discussions with industry experts on key challenges.

For more insights about ESG index, please check out our commentaries on HKEJ: How Can Corporates Implement ESG Initiatives: A win-win for Society and Economy, and stay tuned for our upcoming ESG index seminars and reflections!

About the Events

Such impactful and dynamic academic event with top experts discussing key topics on Stakeholder, Society, and Governance, aims to foster idea exchange, facilitate multi-disciplinary research, and promote cross-pollination for impactful research on sustainability with the occasion.


Two fruitful days featuring keynote presentation from Franklin Allen, welcome remarks from Hongbin Cai, Amy Hillman, Roni Michaely, great presentations from our speakers and panelists, plus a bonus session where we announce our Institute’s best paper winners.


More academic conferences, events, seminars and workshops are on the way. Join and be part of us next time!

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Anchoring Sustainable Investment in an Unstainable World

by Roundtable Reflection

Roundtable Reflections:

The Future of Hong Kong Economy Conference 2025-Anchoring Sustainable Investment in an Unstainable World

  • We are living in an unsustainable world. If the economic system we operated in were sustainable, would we need to pursue sustainability? Logic suggests not.
  • Only 17% of the UN SDG targets are on track, nearly half are showing minimal or moderate progress, and progress on over one third has stalled or even regressed.1
  • The convergence of geopolitical uncertainties, particularly with Donald Trump’s re-election, the rising protectionism, wars and conflicts, threaten to disrupt the global landscape. Meanwhile, the anti-ESG movement undermines sustainable initiatives. Rapid technological advancements also create unpredictability, further complicating investment returns. We are living in an unstainable world full of uncertainties.
  • Hong Kong market has witnessed growth in issuing green bond, ESG mutual fund as financing tools. Yet, discussions related to primary market are still limited.
  • Our institute proudly moderated the 3rd panel, “Anchoring Sustainable Investment in an Unstainable World” led by Prof. Guojun He. We invited Ted CHAN, Head of Hong Kong, Senior Partner and Managing Director of Boston Consulting Group, Dr. Chaode MA, Assistant Resident Representative of UNDP China, and Mr. Ken WONG, Partner and Head of Asia Pacific, Infrastructure of EQT Partners, together, to discuss how could we further consolidate Hong Kong’s internationally-leading position.
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Issues addressed
  • •    Is sustainable investment overall pulling back or pushing forward?
  • •    Which region and sector should investors focus on whilst clean energy unsurprisingly lead the way in terms of causes attracting the most investment?
  • •    How does the global investing landscape impact current asset allocation and sustainable development strategies, especially regarding the differences between Europe, America, and Asia?
  • •    With the convergence of geopolitical uncertainties, particularly Donald Trump’s re-election and the anti-ESG movement, how Chinese enterprises adapt to the dynamics of green-tech investment environment?
  • •    Despite the crucial role of renewables sector in sustainable development, why have corporate stocks experienced significantly downturn?
  • •    In some cases, industry growth can intensify competition, making profitability increasingly difficult and leading many companies to end up bankrupt, similar to solar PV companies. How should investors wisely select potential companies in this field?
Key Takeaways
  • •    Sustainability is a business necessity, not just an ESG goal. Beyond meeting ESG compliance, investors must view green investments as long-term value creation strategies for competitive advantages.
  • •    India could be a top choice for renewable energy investment considering its stable policies, long-term fixed contracts, and large-scale project opportunities.
  • •    Chinese wind turbine manufacturers are catching up with global competitors, creating new market opportunities in emerging economies.
  • •    High financing costs from elevated interest rates and the stability of integrating renewable energy into the grid are the biggest obstacles—not lack of capital.
  • •    Most industries have not fully achieved green transformation and still need substantial capital to transition to fully green operations.
  • •    Hong Kong should capitalize on its status as an international financial hub to become a regional carbon trading center, improving ESG data transparency, and facilitating blended financing for large climate projects.
Closing Remarks

Global climate change, geopolitical conflicts, and intensified ideological differences continue to bring uncertainty to world economic development. We are living in such an unsustainable environment. As one of the world’s major financial centers, Hong Kong has the potential to lead sustainable finance development by fully leveraging its position as a sustainable finance hub. However, this undoubtedly needs close collaboration and communication among the government, academia, and industry.

 

We are honored to share the stage with Dr. Chaode Ma , Mr. Ken Wang, and Mr. Ted Chan for such insightful perspectives exchange. We also invite everyone to stay tuned with us!

About the Event

“The Future of Hong Kong Economy Conference 2025”, organised by HKU Business School and co- organised by the Hong Kong Institute of Economics and Business Strategy, concluded successfully on 16 January. The conference gathered esteemed scholars, policymakers and industry leaders to engage in dynamic discussions and examine strategic pathways for achieving sustainable economic development in Hong Kong. This year, the conference invited Professor James A. ROBINSON, Awardee of the 2024 Nobel Prize in Economics, as the keynote speaker.

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Reference 

[1] United Nations The Sustainable Development Goals Report 2024 

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2024 Bay Area Sustainability Blueprint: Building a Shared Future of Green Prosperity

by Roundtable Reflection

Roundtable Reflections:

2024 Bay Area Sustainability Blueprint: Building a Shared Future of Green Prosperity

2024 Bay Area Sustainability Blueprint: Building a Shared Future of Green Prosperity

On August 13, our research institute had the honour of partnering with Caijing Shudu to launch the first session of the Bay Area Sustainability Blueprint close-door workshop series, themed “Building a Shared Future of Green Prosperity,” held at HKU main campus. The event brought together sustainability experts and leaders from various sectors to explore development pathways for the Greater Bay Area, with a focus on strategies for green economic growth, long-term value creation, and regional sustainable progress.

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Ms. Lu Ling, Assistant Editor-in-Chief of Caijing Magazine, moderated the workshop. In her opening remarks, she introduced Caijing’s ongoing efforts to advance sustainability dialogue and outlined the objectives of the close-door workshop.

Prof. Guojun He, Director of our research institute, opened by introducing the institute’s background and vision, followed by his distinctive insights on this workshop series.

Afterwards, participants exchanged views on their organizations’ ESG initiatives, shared industry-wide expectations for ESG progress, and discussed key topics currently shaping the sustainability agenda. Discussions addressed practical strategies and challenges for embedding ESG into long-term corporate planning, examined the evolving role of financial institutions in enabling businesses to raise their ESG performance, and explored how companies can align with policy incentives to design growth-oriented and customized ESG roadmaps. Participants also highlighted the significance of enhancing regional collaboration across the Greater Bay Area to accelerate sustainable development goals, while drawing connections between global ESG momentum and local implementation in China. Throughout the session, dialogue remained substantive, actionable, and closely tied to real-world contexts.

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The inaugural workshop achieved fruitful outcomes, serving as a bridge for cross-industry collaboration and paving the way for future joint initiatives. We extend our sincere gratitude to all distinguished guests and participants for their valuable contributions. We look forward to more opportunities to engage with our incredible partners in the future, working together to write a new chapter for ESG development in the Greater Bay Area.