HSBC has launched the market's first ESG (Environmental, Social, and Governance) Index for the Guangdong-Hong Kong-Macao Greater Bay Area (GBA). This index will be used on a regular basis to track progress made in ESG within the GBA.
HSBC Greater Bay Area ESG Index
Back to The Greater Bay Area- The first ESG index of the GBA in the market.
- A combination of macro and micro methodologies that is internationally aligned, and locally adapted.
- Evaluating and tracking the GBA’s sustainable development.
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Inaugural ESG Index in GBA
As one of China's most open and economically vibrant areas, the GBA’s Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area includes green development, improving people's livelihoods as sustainable development concepts and more. HSBC has released the first GBA ESG Index in Q4 2022 to effectively reflect the status and improvement directions of sustainable development in the GBA.
Developed in partnership with CECEP Environmental Consulting Group Limited, a consultancy specialising in sustainable management as well as green and sustainable finance, the HSBC GBA ESG Index provides holistic insights into the area’s sustainable development.
The GBA ESG Index uses a combination of macro and micro methodologies and is updated quarterly. As well as the main GBA ESG Regional Index, a number of sub-indices are compiled, including GBA ESG City Sub-indices, GBA ESG Industry Sub-indices and GBA ESG Sub-indices by company size. The GBA ESG Index aims to objectively reflect and track the GBA’s sustainable development and its ESG.
From a macro perspective, we analysed the region, cities and industrial characteristics from five areas, namely policy, environment, economic and social development, corporate governance, and green and sustainable finance. The ESG performance of companies is evaluated from a micro perspective using the following five first-level indicators: environmental, social, governance, green and sustainable finance and external assurance. To these an adjustment indicator, ESG reputation, is added which takes negative or controversial ESG events into consideration.
Daniel Chan
Head of Greater Bay Area, HSBC
Efforts made by the public and private sectors have improved the region’s overall ESG performance three years in a row
GBA's leadership in ESG and sustainable development aids China in reaching its "dual carbon" goal and Sustainable Development Goals (SDGs).
The rise of the GBA ESG Regional Index as a whole from Q4 2019 to Q3 2022 was due to the combined efforts of the both the public and private sectors with companies becoming more aware of environmental issues and doing more to fight climate change.
ESG performance hasn't converged across all eight key sectors, but sectors that were lagging behind have started to catch up in the past three years.
From Q4 2019 to Q3 2022, the industrials sector performed best in ESG among the eight key sectors for proactively acting on environmental management and energy savings. It was also the most active sector in the green and sustainable finance market.
The healthcare sector experienced the greatest ESG improvement of all eight sectors despite having the lowest starting point. The integration of social and environmental issues into its daily operations is key for ongoing development.
Large companies consistently performed better in ESG disclosures than SMEs for the financial years 2019 to 2021, and the gap was widening. SMEs request more ESG advisory and sustainable finance options to help them develop sustainably.
Large companies and SMEs improved in ESG disclosure, while executive pay linked ESG could be improved further.
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Disclaimer:
There is no standard definition of, measurement criteria or methodology for ESG/Sustainability assessments. HSBC does not conduct its own specific due diligence in relation to the methodology adopted by CECEPEC in respect of the study in this document. ESG/Sustainability assessment is an evolving area and new regulations and measurement criteria may come into effect which may affect how a specific criteria such as a geographical area, industry or business sector is categorised or labelled. A criteria such as geographical location, industry or business sector which is considered to fulfil ESG/sustainable criteria today may not meet those in the future.
Today we finance a number of industries that significantly contribute to greenhouse gas emissions. We have a strategy to help our customers to reduce their emissions and to reduce our own. For more information visit www.hsbc.com/sustainability
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Sustainable Finance in the GBA
Sustainable development has become one of the strategic priorities in the GBA.
