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Non-improvement of ESG strategies to cost Asian companies dearly

As per a report commissioned by HSBC in conjunction with East & Partners, Asian companies, particularly those in Southeast Asia, are at risk of falling out of multinational corporations' supply chains if they fail to improve their environmental, social and governance (ESG) strategies. The conclusion is based on interviews with senior executives of 1,731 companies and institutional investors. More than 300 companies and investors in Asia -- specifically China, Hong Kong and Singapore -- participated in the survey conducted over five weeks to the end of June.

As per the report, 24 per cent of Asian respondents have an ESG strategy compared to 48 per cent of corporations globally and 87 per cent of European and UK companies. Globally, tax incentives and financial returns are the two biggest drivers for corporations undertaking ESG-related activity. But Asian corporations' motivations depart from those of their global peers.

The study suggests fewer Asian companies have an ESG strategy compared to their global peers. This creates an opportunity for Asian corporations to reinforce their position by utilising green-labeled financing to communicate their focus on sustainability issues, and for others to gain advantage over their peers while 'sustainability leadership' remains relatively scarce.

 

 
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