This is a survey of more than 200 senior executives of Hong Kong-listed companies on how they are addressing ESG concerns and driving its development in the region.

According to new data, the majority of surveyed business executives of Hong Kong-listed companies are yet to integrate environmental, social and governance (ESG) as part of their core business strategy. But they do see the see value in ESG business strategies. This report comes at a time when investors are increasingly considering including ESG investments in their portfolios, as the financial sector continues to invest effectively.

This data comes from a joint survey by KPMG, CLP and the Hong Kong Institute of Chartered Secretaries. The report, titled ESG: A view from the top, features a survey of more than 200 senior executives of Hong Kong-listed companies on how they are addressing ESG concerns and driving its development in the region. The survey had a total of 212 respondents, comprising either C-suite or senior management of listed companies in Hong Kong. The survey was anonymous, and was conducted from February to April 2018.

It found that nearly 70 per cent of surveyed business executives acknowledge the value of ESG in their businesses. Some 38 per cent of respondents think ESG is essential as business success depends on environmental and social resources, while 30 per cent note that it is good for business in terms of attracting investors seeking long-term sustainable investments.

However, only 37 per cent of respondents say that they have integrated ESG considerations in their strategic planning, and 41 per cent indicate that it has been considered in boardroom discussions. While ESG reporting has become mandatory since 2016, these findings indicate that it is still a peripheral area for some companies.

The survey finds that three key barriers are affecting more than one third of business executives: limited ESG knowledge; ESG issues are not considered to have a significant impact on the business; and that ESG is expected to deliver limited short-term/immediate returns.

In addition, boards play an important role in terms of driving ESG development and managing their ESG-related risks and opportunities. The survey finds that 43 per cent of respondents expect to increase their investment by improving their company's tracking of ESG issues and related communication to the board in the next three years. However, only 13 per cent of respondents indicate that they expect to add board member(s) with specific ESG-related skills/experiences to improve board oversight of ESG-related investments.

"A number of studies have found that strong ESG performance can create competitive advantages, including a more stable investor base, lower cost of capital and better access to financing, improved employee engagement and customer loyalty,” said Pat-Nie Woo, partner, business reporting and sustainability at KPMG China. These benefits are vital to the companies seeking to create long-term value and strengthen their corporate performance."