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 City Sub-indices, Industry Sub-indices and 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 analyse 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.
Government measures in sustainable developments have contributed to the steady ESG development in the GBA
Adjustments in COVID-related policies and the implementation of multiple economic support measures have had positive impact on economic and social development of the GBA over the past six months.
Municipal governments in the GBA have been actively promoting manufacturing industry upgrading and implementing sustainable development measures, driving up corporate needs for products and services of green finance. The issuance of GBA’s GSSS Bonds increased by 71% year-on-year in Q4 2022 and by 96% year-on-year in Q1 2023.
The average value of the GBA ESG industry Sub-indices has increased slightly over the past two quarters, hitting a record high in Q1 2023, up 6% from Q3 2022.
In the past two quarters, the ESG performance of the industrials and financials have remained at the forefront among all eight key sectors, with the healthcare sector achieving the highest rate of improvement. The consumer discretionary sector has shown a remarkable increase in ESG performance, rising by 17% in Q4 2022 and 21% in Q1 2023.
The improved ESG performance for the consumer discretionary is largely due to increasing policy support and efforts to address climate change. Green and sustainable consumption is gradually becoming the go-to choice for an increasing number of consumers, presenting both challenges and opportunities for the consumer discretionary and its sub-sectors.
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 CECEP 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
Get in touch to learn more about our banking solutions and how we can help you drive your business forward.
