2024 has become the hottest year on record. Despite the urgent need to address climate change, some countries are withdrawing or reconsidering their climate commitments. Against this backdrop, Hong Kong Exchanges and Clearing Limited (HKEX) recognizes that as Asia's leading financial market infrastructure, it must not only maintain its competitiveness in terms of business and technology, but also take concrete actions to help reduce global emissions.

HKEX announced on March 13 that the Group has achieved carbon neutrality by 2024. This is an important milestone for HKEX's climate action and fulfills its commitment to drive a global net-zero transition.

On March 17, HKEX released its Sustainability Report 2024, reporting on the Group's sustainability performance over the course of 2024 based on four key priorities: sustainable finance, climate resilience and mitigation, talent and community, and responsible business.

The report shows that in 2024, HKEX will adopt a comprehensive and integrated corporate responsibility framework to further integrate ESG considerations into its business and operations.

1. Promoting the development of a sustainable financial ecosystem

- Amended the Listing Rules to make it mandatory for listed companies to disclose climate information in accordance with International Financial Reporting Standard S2 - Climate-Related Disclosures (IFRS S2), becoming the first exchange in the world to introduce the standard.

- Promote board diversity by requiring all listed companies to have no single gender composition on their boards.

- Publishes consultation summary on Corporate Governance Code to further enhance board effectiveness, independence and diversity.

- Announced the mandatory reporting of emissions information under the EU Carbon Boundary Adjustment Mechanism (CBAM) methodology for registered aluminum brands on the LME.

- Core Climate, its carbon marketplace, introduced the Gold Standard Certified Carbon Credit product to provide investors and businesses with more climate project options.

- In 2024, a total of 134 ESG-related bonds were newly listed on the Hong Kong Stock Exchange (HKEX), raising a total capitalization of $291 billion. The total capitalization of ESG-related bonds listed on the HKEX during the period from 2015 to 2024 amounted to $1,280 billion.

- 1,900+ participants in the lESG Academy ISSB Guidelines online training.

2. Enhancing climate resilience and mitigation

- Carbon neutrality is achieved through the use of renewable energy and the purchase of carbon credits. By the end of 2024, 99% of the Group's operating sites were powered by renewable energy. 54,839 tons of carbon credits were cancelled and the Group achieved carbon neutrality in 2024.

- Implemented severe weather trading arrangements to improve the climate resilience of its businesses and markets.

- Reduced paper consumption with new proposals for a paperless listing regime and the launch of digital depository services. Successfully saved over 97,000 pages of paper in 2024.

- Submitted science-based carbon reduction targets to the Science-Based Targets Initiative (SBTi) for validation.

- Tseung Kwan O Data Center was awarded Green Building Environmental Assessment (GBA) Platinum Certification for Existing Buildings. Newly installed solar panels in recent years generate about 105,000 kWh of clean energy annually.

3. Contributing to the community by putting people first

- Nurtures talented people through leadership training programs.

- Organized more than 40 events and Wellness Marketplace during HKEX Global Wellness Month to support employees' physical and mental health.

- Launched activities through HKEX Network to build an inclusive and engaging work environment, including fitness programs of various levels, a new corporate dragon boat team, family care seminars and LGBTQ+ celebrations.

- HKEX Simple Employee Survey participation score increased by 10%.

- Funded more than 25 community projects launched by charities and social enterprises through the HKEX Philanthropy Partnership Program and the HKEX Community Project Grant Scheme.

4. Responsible Operations

- Maintains ISO 27001 certification for the information security management system of its corporate data centers. Provide cyber security training and awareness enhancement activities for employees. Regular simulated cyber attack drills.

- Updates the Group Third Party Risk Management Policy and related guidelines to ensure a responsible and ethical supply chain.

- Partnered with a charity organization dedicated to promoting mental health and supporting the differently-abled to open Cafe 388.

HKEX's Group Chief Sustainability Officer, Mr. Paul Chow, released an insight article saying,“After returning from the World Economic Forum in Davos at the beginning of the year, I am keenly aware of the need for both business and society to proactively prepare to meet the climate challenge and strengthen climate resilience. As a business, market operator and regulator, HKEX has announced that it is on track to achieve carbon neutrality and its next target is to achieve net zero emissions by 2040, a decade ahead of our original plan.”

“With the experience we have accumulated in achieving these targets, we believe we can set an example for the business community and drive the green transformation of other organizations. According to a recent study by consultant KPMG, many Hong Kong companies have already embarked on climate action, and we aim to chart a sustainable path for issuers and the corporate ecosystem as a whole. The Hong Kong government is committed to achieving carbon neutrality by 2050, and companies have an important role to play in reaching this goal.”

In addition, Mr. Chow Koon Ying summarized three major strategies for moving towards green transformation: First, understand the corporate supply chain and set emission reduction targets properly. Clarify the targets and ensure that they are realistic, feasible and in line with local circumstances. Flexibility, such as purchasing carbon credits.

Author: Qinger