Appendix 27
Environmental, Social and Governance Reporting Guide
The Guide
1. This Guide comprises two levels of disclosure obligations: (a) “comply or explain”
provisions; and (b) recommended disclosures.
2. An issuer must report on the “comply or explain” provisions of this Guide. If the issuer
does not report on one or more of these provisions, it must provide reasons in its ESG report. The issuer is encouraged, but not required, to report on the recommended disclosures of this Guide. For guidance on the “comply or explain” approach, issuers may refer to the “What is “comply or explain”?” section of the Corporate Governance Code and Corporate Governance Report (“Corporate Governance Code”) in Appendix 14 of the Main Board Listing Rules.
3. An issuer must disclose ESG information on an annual basis and regarding the same
period covered in its annual report. An ESG report may be presented as information in the issuer’s annual report, in a separate report, or on the issuer’s website. Regardless of the format adopted, the ESG report should be published on the Exchange’s website and the issuer’s website. Where not presented in the issuer’s annual report, the issuer should publish this information as close as possible to, and in any event no later than three months after, the publication of the issuer’s annual report.
Overall Approach
4. This Guide is organised into two ESG subject areas (“Subject Areas”): Environmental
(Subject Area A) and Social (Subject Area B). Corporate governance is addressed separately in the Corporate Governance Code.
5. Each Subject Area has various aspects (“Aspects”). Each Aspect sets out general
disclosures (“General Disclosures”) and key performance indicators (“KPIs”) for issuers to report on in order to demonstrate how they have performed.
6. In addition to the “comply or explain” matters set out in this Guide, the Exchange
encourages an issuer to identify and disclose additional ESG issues and KPIs, including
order to understand their views and better meet their expectations.
7. This Guide is not comprehensive and the issuer may refer to existing international ESG
reporting guidance for its relevant industry or sector. The issuer may adopt international ESG reporting guidance so long as it includes comparable disclosure provisions to the “comply or explain” provisions set out in this Guide. The issuer may also consider obtaining assurance on its ESG report.
ESG strategy and reporting
8. The board has overall responsibility for an issuer’s ESG strategy and reporting.
9. In line with the Corporate Governance Code, the board is responsible for evaluating and
determining the issuer’s ESG-related risks, and ensuring that appropriate and effective ESG risk management and internal control systems are in place. Management should provide a confirmation to the board on the effectiveness of these systems.
10. The ESG report should state the issuer’s ESG management approach, strategy, priorities
and objectives and explain how they relate to its business. It would be useful to discuss the issuer’s management, measurement and monitoring system employed to implement its ESG strategy. An ESG report should also state which entities in the issuer’s group and/ or which operations have been included in the report. If there is a change in the scope, the issuer should explain the difference and reason for the change.
Reporting Principles
11. The following Reporting Principles underpin the preparation of an ESG report, informing
the content of the report and how information is presented:
(1) Materiality is the threshold at which ESG issues become sufficiently important to
investors and other stakeholders that they should be reported.
(2) Quantitative: KPIs need to be measurable. Targets can be set to reduce a particular
impact. In this way the effectiveness of ESG policies and management systems
can be evaluated and validated. Quantitative information should be accompanied
by a narrative, explaining its purpose, impacts, and giving comparative data where
appropriate.
(3) Balance: The ESG report should provide an unbiased picture of the issuer’s
performance. The report should avoid selections, omissions, or presentation formats
that may inappropriately influence a decision or judgment by the report reader.
(4) Consistency: The issuer should use consistent methodologies to allow for
meaningful comparisons of ESG data over time. The issuer should disclose in the
ESG report any changes to the methods used or any other relevant factors affecting
a meaningful comparison.
Complementing ESG discussions in the Business Review Section of the Directors’ Report 12. Pursuant to paragraph 28(2)(d) of Appendix 16 of the Main Board Listing Rules, an issuer’s
directors’ report for a financial year must contain a business review in accordance with Schedule 5 to the Companies Ordinance. The business review must include, to the extent necessary for an understanding of the development, performance or position of the issuer’s business:
(i)    a discussion of the issuer’s environmental policies and performance;
(ii)    a discussion of the issuer’s compliance with the relevant laws and regulations that have a significant impact on the issuer; and
(iii) an account of the issuer’s key relationships with its employees, customers and suppliers and others that have a significant impact on the issuer and on which the
issuer’s success depends.
This Guide should complement the content requirements of the directors’ report, as it calls for issuers to disclose information in respect of specific ESG areas.
Note: As regards “Subject Area A. Environmental”, th e upgrade of th e KPIs to “comply or explain” will come into effect for issuers’ financial years beginning on or after 1 January 2017.
Subject Areas, Aspects, General Disclosures and KPIs
“Comply or explain” Provisions Recommended Disclosures A. Environmental
General Disclosure
Aspect A1:
Emissions
Information on:
(a) the policies; and
(b) compliance with relevant laws and regulations
that have a significant impact on the issuer
relating to air and greenhouse gas emissions,
discharges into water and land, and generation of
hazardous and non-hazardous waste.
Note: Air emissions include NO x, SO x, and oth er
pollutants regulated under national laws
and regulations.
Greenh ouse gases include carbon
d i ox i d e, m
e t h a n e, n i t r o u s ox i d e,
h ydrofluorocarbons, perfluorocarbons and
sulphur hexafluoride.
Hazardous wastes are th ose defined by
national regulations.
KPI A1.1The types of emissions and respective
emissions data.
KPI A1.2 Greenhouse gas emissions in total
(in tonnes) and, where appropriate,
intensity (e.g. per unit of production
volume, per facility).
Subject Areas, Aspects, General Disclosures and KPIs
“Comply or explain” Provisions Recommended Disclosures
KPI A1.3 Total hazardous waste produced
(in tonnes) and, where appropriate,
intensity (e.g. per unit of production
volume, per facility).
KPI A1.4Total non-hazardous waste produced
(in tonnes) and, where appropriate,
intensity (e.g. per unit of production
volume, per facility).
KPI A1.5 Description of measures to mitigate
emissions and results achieved.
KPI A1.6Description of how hazardous and
non-hazardous wastes are handled,
reduction initiatives and results
achieved.
governanceAspect A2: Use of Resources General Disclosure
Policies on the efficient use of resources, including energy, water and other raw materials.
Note: Resources may be used in production, in storage, transportation, in buildings,
electronic equipment, etc.

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