Annual reports soar to new heights with ESG reporting

The Best Annual Reports Awards organised by The Hong Kong Management Association (HKMA) since 1973, recognises outstanding reports, and has, over the years, effectively raised the bar for quality of reporting on the organization’s performance and future prospects.

According to Patrick Wu, Chairman of 2022 Panel of Adjudicators, informative annual reports are a crucial element in cementing Hong Kong’s position as a world-class financial centre, especially on integrity and transparency in financial reporting.

“The quality of entries this year remains high despite COVID-related disruptions,” he observes. “We are pleased to note that most entries have gone beyond minimum regulatory requirements, and show commendable voluntary efforts on wider disclosure.”

A significant addition since 2021 is the Environmental, Social and Governance (ESG) Reporting Awards as investors increasingly look for such information to make informed decisions and manage risks.

Wu is pleased that outstanding entries in the “General” Category spent every effort to provide insights with useful market analyses to support their forward looking statements. Company performance was fully disclosed in detail with enhanced readability using well thought-out design and layout.

Wu looks forward to reporting improvements in future prospects and risk factors with quantitative estimates in addition to qualitative statements; disclosure on relevant market or industries performance/data and their bases of calculation; and potential impact on climate change.

As for the “Non-profit Making and Charitable Organizations” Category, most entries presented adequate information on ESG, especially on corporate governance, with excellent understandability, clarity and conciseness.

Wu suggests these organisations could devote more coverage on employment and labour practices; forward looking developments; outlook for changes in group structure/management structure/key personnel; challenges and risk management plans; future needs for their services; expected increase in expenditure; and disclosures on environmental issues.

A brilliant effort by top winners

Wu congratulates the top three annual report winners for setting fine examples:

This year’s Best Report Award winner, Hong Kong Exchanges and Clearing Limited, demonstrates high transparency and effective communication with a comprehensive Sustainability Report on promoting ESG transparency and advocacy among Hong Kong listed companies, facilitating the growth of a sustainable and green finance ecosystem, and upholding environmental stewardship in its operations.

The Gold winner under “General” Category, CLP Holdings Limited, adopts a double materiality approach to focus on financial material topics that create or erode enterprise value.  CLP also launched its first standalone Climate-related Disclosures Report.

Meanwhile, The Hong Kong Jockey Club, the Gold winner under “Non-profit Making and Charitable Organizations” Category, uses eye-catching photos to illustrate the theme “Racing Forward Together” with Hong Kong, its care for the community and commitment to excellence.