In recent years, ESG has become an important topic in all walks of life. Enterprises and investors have paid more attention to the development of ESG. Research indicates that ESG will profoundly impact the long-term performance of enterprises in the future.
What is ESG
ESG = (Environmental, Social and Governance)
ESG is used to measure the ethical and sustainable impact of an investment in a company .
In recent years, more investors have used ESG metrics to measure the social responsibility performance of a company. Investors believe the ESG performance score can reflect a company’s liability level, where risks and opportunities lie.
The category scores are rolled up into three-pillar scores: environmental, social, and corporate governance.
Topic of ESG
• Enviromental Require corporate to limit the use of natural resources, reduce emissions of hazardous air Pollutants, and suggest that corporate should increase environmental protection and climate change awareness.
• Social Require a diverse and fair hiring process from the , emphasizing human rights and consumer protection and focusing on the communities in which they operate.
• Corporate Governance Governance factors of decision-making, from sovereigns' policymaking to the distribution of rights and responsibilities among different participants in corporations, including the board of directors, managers, shareholders, and stakeholders.
• Compliance and Repetition Ability to comply with relevant laws and regulations and reduce compliance risks. The value of repetition is important to a corporate , which maximizing your companies attractiveness to Investors.
Importance of ESG
In early 2004 previous UN Secretary-General wrote to over 50 CEOs of major financial institutions, inviting them to participate in a joint initiative under the auspices of the UN Global Compact, which aims to find ways to integrate ESG into capital markets. Ironically, most company / business owner only cares about maximizing Profits , and didn't find ESG helpful in many ways.
ESG has long been neglected until recent years. In recent years , panadmic pandemic has led to a global health crisis , the outbreak has bring about the significant message about the connention between human being and natural enviroment . Investors begin to recogize that ESG has played a major role in corporate sustainability .
During 2019 , the stock Exchange of Hong Kong Limited (the Exchange), published (ESG) Reporting Guide (ESG Guide) and Related Listing Rules’ (ESG Consultation Conclusions) . From financial years beginning on or after 1 July 2020, Hong Kong-listed companies are required to disclose more information in their ESG reports .
ESG Future Trend
With the period heavily impacted by the pandemic, stocks with higher ESG ratings outperformed those with weaker ESG ratings. In the past ten years, 60% of Global Sustainability funds outperformed Traditional funds. Governments have also successively introduced regulations on ESG:
• China Securities Regulatory Commission ( CSRC) is studying and formulating specific regulations on
ESG disclosure.
• Hong Kong government released a Green and Sustainable Finance Grant Scheme guideline.
• US, UK, and EU announce net-zero emissions met by 2050
• Singapore recently announced Green Plan 2030, a national sustainability movement for the next ten years that seeks to rally bold and collective action to tackle climate change.
• Ｍalaysia National Bank launched green taxonomy to help customers identify green finance institutions.
Enterprises integrating ESG into their business will likely expand into the international market. Large Enterprises such as Alibaba, Samsung, Amazon, etc., have already integrated ESG into their business due to specific regulations and market needs.
Oceanus Strategic & ESG
Oceanu Strategic recogized the needs and importance of ESG early in 2017. Over the years , we participated in numbers of charity activities ；Personal Development for Employees; Choose to use community care service to creatr job opportunities for disadvantages. Oceanus Strategic has also been awarded the "Caring Company" logo, Happy Company, and ERB talent training programs awards for the past five years.
Know more about ESG , contact our professional team !
