Two out of three Greater Bay Area firms have adopted sustainable practices, with ESG investments set to reach US$128 billion in next two years: survey

Two out of three firms in the Greater Bay Area have adopted sustainable development practices in their business operations, and investments relating to environmental, social and governance (ESG) by such enterprises could reach HK$1 trillion (US$127.8 billion) over the next two years, according to a report by the Hong Kong Trade Development Council (HKTDC) and UOB.
The most common green practices, adopted by 65 per cent of the bay area firms, were recycling of resources, chosen by 29 per cent of respondents, followed by use of clean energy at 27 per cent, according to the “Sustainability in the GBA: unlocking opportunities and empowering growth” report released on Thursday afternoon.
“As sustainable development has become increasingly important, GBA-based businesses have become ever more committed to implementing ESG-related strategies in their daily operations and across various aspects of their businesses,” said HKTDC research director Irina Fan at a media briefing at the launch of the report.

Over 90 per cent of GBA enterprises intended to increase or maintain their ESG investments in the next two years, according to the results of the survey. Some 30 per cent of respondents were planning an increase while 64 per cent expected to maintain investments at their current levels.

On average, businesses in the bay area expected to allocate a budget of HK$370,000 to ESG initiatives over the next two years. With around 3 million enterprises in the zone as of 2022, total ESG-related investments are projected to top HK$1 trillion over the next two years, according to the report.

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The online survey by the HKTDC and UOB, a Singaporean bank, was conducted in July and August this year on 300 enterprises across the manufacturing and service industries based in the 11 bay area cities. This included 150 respondents from the nine mainland cities, 120 from Hong Kong and 30 from Macau. In-depth interviews were also conducted with professionals in the GBA across different sectors.

The Greater Bay Area (GBA) is the Chinese government’s scheme to link those cities into a huge integrated economic and business hub.

In Chief Executive John Lee Ka-chiu’s 2023 policy address on Wednesday, he outlined measures to deepen financial cooperation in the GBA, part of efforts to reinforce the city’s competitiveness as a financial centre.

These included establishing the Shenzhen-Hong Kong financial cooperation committee with the Shenzhen authorities in the first half of 2024. The committee would advise and offer suggestions to bolster mutual access to the financial markets, cooperation on financial technologies and green finance, as well as the exchange of financial talent, according to the policy address.

Measures such as these would definitely help to drive investments relating to ESG in the Greater Bay Area, said HKTDC’s Fan.

Almost all of the surveyed GBA enterprises (99.7 per cent) planned to incorporate or increase the level of ESG elements in their operations over the next two years. Some 84 per cent said they would pay more attention to the sustainable development of their production processes and management procedures as a priority, while 78 per cent said they would have their sustainable products or services certified.

Among firms that had adopted green practices, 98 per cent reported a positive impact on their businesses. Enhanced reputation and prestige of the company, as well as improved efficiency and cost reductions, were the top benefits for 75 per cent of them.

Around 70 per cent of respondents said they would consider using more green products and services provided by Hong Kong in the next two years.

“Hong Kong, with its complete financial ecosystem and capital raising experience, can provide green financial services and investment opportunities for firms in the Greater Bay Area, to help the GBA become a green financial centre,” said Brian Lam, chief financial officer and chief sustainability officer of UOB Hong Kong at the media briefing.

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