4 Benefits of Embracing ESG into Business in Hong Kong

What is ESG?

ESG (Environmental, Social and Governance) is a strategic framework that guides companies in integrating sustainability and social responsibility into their operations. It encourages businesses to align their environmental impact, social relationships, and governance practices with every decision-making process to create long-term value while addressing global challenges.

ESG’s Three Pillars:

• E ➤ “ Environmental ” - emphasises the impact that the businesses may bring to the environment, such as energy consumption, carbon emissions and natural resource depletion.
• S ➤ “ Social ” - focuses on the relationship between companies, the local community and employees, concerning how companies treat people and society in terms of things like employee diversity, involvement in charity and employee working conditions.
• G ➤ “ Governance ” - examines how companies govern themselves well, such as corporate governance and transparency, prevention of corruption and diversity in the management structure.

The Development of ESG in the Hong Kong Business Landscape

The Hong Kong Exchanges and Clearing Limited (HKEX) launched the " Corporate Social Responsibility Report " in 2019 and consulted 156 professionals on the relevant amendments to the provisions, which aimed at centralising the ESG market standards for the business community. By 2025, HKEX has further tightened its ESG disclosure requirements, mandating climate-related reporting aligned with the Task Force on Climate-Related Financial Disclosures (TCFD).

Meanwhile, the Securities and Futures Commission (SFC) also announced the " ESG Funds " launched in 2020, to bolster green finance. In 2024, the SFC reported a 35% increase in ESG fund registrations, reflecting growing investor interest in sustainable assets. With encouragement from the Government, more and more Hong Kong companies are initiating their ESG development strategies and ESG fund products and releasing ESG sustainability reports to investors every year. 

4 Reasons Why ESG Matters for Hong Kong Businesses 

1. Market Grow Opportunities

A robust ESG strategy is a powerful tool for expanding market reach, whether targeting consumers (B2C) or businesses (B2B). 

For B2C, consumers increasingly prioritize sustainability. A 2024 Hong Kong Consumer Council survey found that 91% of respondents are willing to pay a premium (up to 7% more) for eco-friendly products or services. With climate awareness rising—spurred by events like the 2024 Asia-Pacific Climate Summit in Hong Kong—brands that embed ESG into their identity resonate more with buyers, boosting loyalty and market share. 

For B2B, ESG alignment fosters stronger partnerships. A 2024 HKTDC and PwC Hong Kong report revealed that 68% of B2B decision-makers prioritise suppliers with clear ESG commitments, up from 52% in 2022. Companies ignoring ESG risk losing contracts as supply chains globally shift toward sustainability. For example, a 2025 Deloitte study noted that 80% of B2B leaders see ESG as a competitive edge in securing deals.

2. Attract Global Investment and Government Funding

Practising an ESG development strategy helps Hong Kong companies to demonstrate a positive brand image, which in turn attracts more investment from different investors, including the Hong Kong Government.

A proactive ESG strategy is a weapon for Hong Kong companies to strengthen investor confidence and attract investment capital from Hong Kong and the global market. In recent years, led by the Hong Kong Government, more and more investors are choosing different ESG investment funds to provide large amounts of capital to companies with ESG prospects. A report by Bloomberg Intelligence estimates that ESG-related assets will exceed US$50 trillion by 2025. Most multinational rating agencies, such as EcoVadis, have already incorporated ESG metrics into their companies' rating considerations. It is undeniable that a strong ESG proposition correlates with higher credit ratings, which can help Hong Kong companies attract investments from the global market and the GBA market. Hong Kong companies that want to obtain more capital to tap into larger markets should develop a comprehensive ESG proposal.

In addition, under the Hong Kong Government's policy, the promotion of ESG can bring huge green finance opportunities to enterprises. Under the global trend of Green Finance, the Hong Kong Government has spared no effort in promoting green bonds. In 2018, they set up “ Green and Sustainable Finance (GSF) ”. In 2022, they announced an increase in total funding from HK$100 billion to HK$200 billion to encourage Hong Kong companies to participate in sustainable and environmentally efficient investments and raise more capital.

In 2021, the “Government Green Bond Programme“ raised a total of HK$29,000+ million to provide financial support to a wide range of green projects and environmental industries in Hong Kong, including green buildings, waste management and renewable energy construction, which greatly helped Hong Kong companies to reduce the economic cost of ESG development. In addition, the Government has also launched the ” Green and Sustainable Finance Funding Scheme “ to support green financing for small, medium and large-scale Hong Kong companies.

3. Reduce Operating and Construction Costs

Under the ESG approach, in addition to saving daily operational expenses, companies can also minimise the costs of new building construction and existing building renovation.

Decarbonisation is a key component of ESG, it encourages companies to lower their carbon emissions by tracking energy consumption, transport emissions and raw material consumption at source, leading to optimisation in carbon management. McKinsey reports that implementing an ESG approach can effectively reduce operating costs by about 60% for companies. As an example, CLP Power's " 2021 Sustainability Report " stated that they had achieved 25.1% of non-carbon generating energy capacity after investing in solar power systems, which resulted in 76% of operating earnings from non-carbon generating assets and transmissions. To some extent, ESG provides a framework for companies to do more advanced green planning in energy management, which in the long run provides vast economic benefits in terms of daily operating expenses. 

By incorporating green technologies into building renovation or new construction to meet green building targets, enterprises can easier obtain energy audits from the government department and reduce construction costs. According to the “ Hong Kong Energy Efficiency Registration Scheme for Buildings ”, the government will conduct mandatory energy audits on new buildings according to a number of standards, focusing on the energy efficiency and consumption of four major types of building services installations, such as air conditioning, lighting, electricity, lifts and escalators, while existing buildings will be subject to energy audits once every ten years. If a business building complies with the above regulations, it can avoid fines and receive additional tax breaks, and more importantly, it can ensure that the building's construction schedule proceeds as scheduled, avoiding unnecessary costs that may be incurred on the building.

4. Attract and Retain Talent

In general, a company that performs well in terms of technology, employee care and corporate social responsibility has a stronger competitive edge in the talent market and a higher probability of cultivating loyal employees.

The new generation of job seekers is more likely to have a broader international perspective and is more willing to pay attention to social issues. When they consider a job opportunity, they will take the company culture and brand reputation into consideration instead of simply depending on the amount of salary.

Therefore, companies with a comprehensive ESG practice have a greater advantage in attracting young talent. According to a study by Cone Communications, 64% of millennials will consider a company's social and environmental commitment when looking for a job. As we can see, companies that integrate ESG into their corporate culture, allocate resources to talent development and care for the well-being of employees will be able to attract more young talent.

When companies demonstrate positive sustainability and care for their employees, employees with similar values will have a greater sense of belonging and cohesiveness and will want to stay with the company. According to the Forbes 2021 “100 Best Companies to Work For” report, employees who work in a company with a strong socially responsible culture are 15.6 times more likely to be satisfied with their jobs and less likely to change jobs. Furthermore, Majordomo Hong Kong Limited's report of " ASIA’S WORKFORCE AWAKENS TO ESG " also reflects that over 90% of employees surveyed agree that a company's ESG values are relevant to their satisfaction with their current job. The emphasis on ESG development not only helps to build social credibility but also helps employees build up a sense of belonging and reduces their willingness to resign from the company.

HKT Smart Energy Solutions for Your ESG Evolution

As the leading ICT operator in Hong Kong, HKT strives to provide one-stop innovative green technology solutions for companies of all sizes, such as Smart Energy Management and PropTech Solutions, to help Hong Kong companies incorporate different digital technologies into new buildings or building renovation plans to optimise energy efficiency and accelerate the development of ESG and digital transformation.