
Hong Kong’s accounting regulatory body has revealed that more than half of the Hang Seng Index’s constituent firms have voluntarily published their sustainability performance reports last year, reported South China Morning Post.
The Accounting and Financial Reporting Council highlighted that 21% of these firms achieved a “reasonable” grade from sustainability assurance auditors, while 53% were rated as “limited”.
The remaining companies received a “mixed or other” rating.
The council’s study, which assessed market readiness for sustainability reporting and assurance, was conducted from 6 May to 23 May 2024, when the Hang Seng Index comprised 82 members.
The council also surveyed listed companies and auditors on their sustainability practices and future plans.
It anticipates launching a public consultation on a regulatory framework for sustainability assurance later this year.
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By GlobalDataThis move aligns with the government’s aim in March 2024, to be among the first jurisdictions to adapt local requirements to the International Financial Reporting Standards – Sustainability Disclosure Standards.
The council stated: “These diverse practices can confuse investors and other readers of sustainability reports, highlighting the importance of developing the sustainability assurance framework.”
Accounting and Financial Reporting Council CEO Janey Lai Chui-pik noted that both Certified Public Accountant (CPA) and non-CPA firms are currently providing sustainability assurance services in Hong Kong.
She said: “By leveraging their assurance expertise, CPA firms can expand their services, drive innovation, and enhance their value proposition [to] meet the growing needs of stakeholders.”
The survey also revealed that 47% of corporate respondents plan to invest in data and technology, internal controls, systems, governance, and financial and human resources to enhance their sustainability reporting.
Nearly half of the respondents have relied on in-house accountants for all climate-reporting tasks, while 13% have not yet used them for such assignments, according to the council.