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Hong Kong exchange to strengthen governance reporting guidelines

[HONG KONG] The Hong Kong stock exchange (HKEx) is strengthening its environmental, social and governance reporting guidelines for listed companies in a bid to beef up corporate governance in the financial centre.

The new requirements were a result of a consultation paper published in July 2015 to seek comments on proposed amendments to the Environmental, Social and Governance Reporting Guide (ESG Guide) and related Rules, the exchange said in a statement on Monday.

The latest move by the exchange, whose listed unit is the Hong Kong Exchanges and Clearing Ltd, comes amid a growing global trend among investors towards incorporating social and environmental factors into investment decisions. "We are encouraged by the overwhelming support for our proposals to strengthen issuers' environmental, social and governance disclosure obligations," David Graham, HKEx's chief regulatory officer and head of Listing, said in the statement. "Issuers starting to report on their ESG performance may reap the benefits of better risk management, improved access to capital, greater capacity to meet supply chain demands and lower operational costs, to name but a few of the advantages that ESG reporting could bring to issuers' businesses."