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September 09, 2013
Corporate ESG Performance in Hong Kong and China Stagnant
    by Robert Kropp

Asian research provider RepuTex-ESG analyzes the ESG performance of companies on the Hang Seng Corporate Sustainability Index Series and finds it basically unchanged from 2012.


The Hang Seng Corporate Sustainability Index Series was launched in 2011 to benchmark sustainable investment by including companies in Hong Kong and on the Chinese mainland that outperform their peers on environmental, social, and corporate governance (ESG) factors.

The assessments of corporate ESG performance are provided by RepuTex-ESG, a Hong Kong-based sustainability analytics firm. RepuTex published the results of its annual analysis this month.

After reviewing the ESG performance of 616 companies for inclusion in the index series, RepuTex determined that overall corporate performance has stagnated since its 2012 assessment. While the number of companies achieving satisfactory ratings increased somewhat, and the Hong Kong-based corporations averaged a moderate rating, companies on the Chinese mainland averaged an unstable rating and the overall rating for the companies in the universe was unstable as well.

Companies that receive an unstable rating only disclose “basic governance information in line with regulation, often on third party stock exchange websites rather than their own portals,” RepuTex reported. Those companies also “demonstrated a severe lack of disclosure against RepuTex’s environment, social and workplace criteria.” In fact, environmental impact scores actually decreased slightly since 2012, RepuTex found.

“Policy pressure from the EU and the United States, such as the potential for carbon tariffs on high carbon intensity products and suppliers, does not appear to have materialized as a revenue pressure point for Asian companies in the last 12 months,” the report states.

“The ability of companies to actively reduce emissions is being closely monitored by our RepuTex research analysts, and remains a key watch for the market,” said Martha Grossman, Director of ESG Research at RepuTex.

 

 
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