Only one-tenth of the 357 companies listed in the Hang Seng Composite Index (HSCI), produced formal reports on greenhouse gas emission – the first step in preparing themselves for a climate change strategy, according to the first comprehensive report on carbon performance among Hong Kong businesses.

The worrying findings were revealed in the Hong Kong Carbon Performance Report compiled by Carbon Care Asia, a social business set up in 2008 by a team of passionate professionals who are keen to push for a low-carbon economy with innovative solutions.

“Hong Kong needs bold action to tackle the climate change challenge. If the business sector is slow to act, everyone in Hong Kong will suffer. Carbon reporting is not only the first step towards a low-carbon economy, but also a wake-up call for company executives who have more influence and responsibilities than most of them would realize, ” said Carbon Care Asia’s CEO Ir Albert Lai.

The report found that large companies in Hong Kong flared better in carbon reporting. One out of four companies in the Hang Seng Large Cap Index had formal carbon reporting, while none of the 1,221 listed companies outside HSCI had any form of carbon disclosure. This indicated that smaller firms are largely unaware of their own carbon footprints, which makes it impossible for them to develop a proper strategy to face the uncertain future.

In terms of sectoral performance, utilities companies stand out the best: two thirds of such Large Cap companies produced formal carbon reporting. On the other hand, the worst performing sectors are Consumer Goods, Properties & Construction, and Financials, with less than 20% reporting in each sector. As these are the largest industries in Hong Kong economy, their poor performance has the most adverse impact overall.

“If we look at the overall performance of all companies listed on the main board, less than 1% of Hong Kong companies reported their carbon emissions in accordance with international guidelines such as the Global Reporting Initiative, compared with over 3% in Singapore. There is a lot of catching up for Hong Kong to do, ” said Mr Lai.

The report came as Hong Kong Stock Exchange is upgrading its listing guidelines on ‘Environmental, Social and Governance Reporting’ from ’voluntary’ to a ‘comply or explain’ status for company reports issued starting 2015. It is expected that reporting on greenhouse gas emissions will become more and more common in the years to come. In the UK, carbon reporting has already become mandatory for listed companies since October 2013, placing responsibility for compliance squarely on company board directors.

Dr Trini Leung, Executive Director of Carbon Care Asia, who is engaged by the Environmental Protection Department to lead a team of professionals to develop a carbon footprint repository for listed companies, said, “Hong Kong Government has taken proactive steps to encourage the business sector to improve its carbon performance. Companies with quality carbon reports shall benefit not only from stronger investor support, but also better preparedness to avert climate risk and higher potential for sustainability innovation.”

In a ceremony held by Carbon Care Asia and officiated today by Mr Vincent Piket, Head of European Union Office to Hong Kong & Macau, a total of 39 companies and organisations were awarded the CarbonCare® Label in 2013, a recognition of their performance in carbon accounting and reduction. Mr Winfried Engelbrecht-Bresges, CEO of the Hong Kong Jockey Club, a keynote speaker at the ceremony, shared how the Club has the vision to take the lead in sustainability and to partner with others to adopt changes to reduce carbon footprints. Such efforts have inspired others to follow and collectively their work is being captured under the common carbon e-disclosure platform which aims to contribute to the overall reduction of carbon emissions.

“The window of opportunity for us to act is closing fast. We hope more Hong Kong companies will soon catch up with world best practice, and play their part in averting the catastrophic impact of climate change,” said Chong Chan Yau, chairman of Carbon Care Asia in a passionate appeal at the award ceremony.

A full version of the Hong Kong Carbon Performance Report can be downloaded from Carbon Care Asia website, www.carboncareasia.com.