ADAQ ESG

Over the past two years, the topic of the Covid-19 pandemic has dominated the media headlines, prompting people to pay more attention on our social, economic and environmental health. Environmental, social and governance (ESG) is no longer a public relation tactic, it has become a top concern of the whole society, and also a requirement to sustainable development of a company. Many have realized that ESG program and practices can help to buffer the impacts brought by the pandemic, such as climate change, working conditions and business ethics. Accordingly, many companies have started to invest in social and human capital, in order to create long-term sustainable values. In fact, ESG has become a listing requirement of the Hong Kong Exchanges (HKEX) since 2016. All the listed companies have to submit a report of their ESG performance in accordance with the Environment, Social and Governance Report Guide (HKEX ESG Guide). From the report, companies are better able to unlock competitive values which help them to continually adapt to change in today's uncertain times.

ADAQ ESG aims to provide guidance on ESG-related advisory to the companies that wish to elevate their disclosure of sustainability performance to the international standards. Our experienced ESG consultants will raise corporate leaders' awareness on ESG, inspiring them to adopt sustainable practices in their business frameworks.

Appendix 27: HKEX Environmental, Social and Governance (ESG) Reporting Guideline

Environmental, Social and Governance Reporting Guide

Mandatory Disclosure "Comply or Explain"

Governance Structure

A statement from the company's board of ESG issues, approach and strategy to evaluate and review ESG-related issues.

Environmental Social

General Disclosures
KPI Measurement on Environmental & Social

Reporting Principles

Materiality
ESG issues determined by the board are sufficiently important to investors and other stakeholder
Quantitative
KPIs in respect of historical data need to be measurable
Balance
Unbiased picture of the issuer's ESG performance
Consistency
Consistent methodologies to allow for meaningful comparisons of ESG data over time

International Environmental, Social, and Governance (ESG) Process Flow

1

ESG Induction Courses

  • Promote sustainability ESG awareness.
  • Inspire corporate social responsibility by adding sustainability values into business frameworks.
  • Assist in adopting sustainable practices and reporting transparent ESG disclosures.
  • Advisory in the ways to oversight of different climate-related risk management and opportunities, and provide guidance on the overall corporate direction.

2

ESG Eligibility Formation

Company should form clear terms of reference setting out its responsibilities, authorities, and policies regarding the ESG related matters.

3

Determine the ESG performance

Company to conduct internal audit and identify the business performance that are related to ESG matters.

4

ESG Measurement

Once identified, company should conduct self-assessment on general disclosure and KPIs compliance to the HKEX ESG Reporting Guide.

5

ESG Reporting & Publication

Company to publish the ESG performance on the company websites and reports to convey messages to its investors and stakeholders.