Does ESG matter to Hong Kong enterprises?

ESG (Environmental, Social and Governance) has become a focus for global corporates and investors in recent years. The UN Climate Change Conference (COP26) held in Glasgow in 2021 also saw countries and national leaders renew their pledges and consensus on sustainable development. In Hong Kong, ESG strategy and planning, once treated as an aspirational or optional area of reporting, is now a key strategic consideration.

Does ESG bring any commercial benefits to small-and-medium-sized enterprises (SMEs) though? At Hong Kong Economic Summit 2022, experts have shared their perspectives on how it should be approached:

• A variety of green financing products and solutions is already available
  
  Green finance is instrumental to the transition to a low carbon economy. Banks have been rolling out a huge variety of green financing products and solutions to meet SMEs' needs, to be a helping hand in their green transition. Meanwhile, some banks have also introduced Green Deposits as an avenue for SMEs to put their cash reserves to work financing environmentally beneficial projects and promoting the sustainability agenda through their treasury activities.
• Low carbon transition is strategic for long-term success
  
  To many investors, whether a business can transition into a green and low-carbon business model has become a crucial consideration. ESG-conscious SMEs will not only attract investors, but also a new generation of values driven talent. Start-ups are also paying attention to ESG and so start-ups that are staff, product, and socially responsible have the potential to enjoy more success in the long run as opposed to their counterparts who don’t.
• Sustainable financing ecosystem brings business opportunities
  
  Given Hong Kong and mainland China have already set their net-zero targets for 2050 and 2060 respectively, their closer collaborations on green finance can be expected. At the same time, the Guangdong-Hong Kong-Macao Greater Bay Area is also evolving a more mature green financing ecosystem and sparking subsequent demand for low carbon innovation projects. SMEs that have ESG specialties will see further business opportunities opening up in green trading, green supply chains, etc all of which will propel business growth.