Major change #1 – aligning with TCFD Recommendations

HKEX highlighted that the companies may refer to TCFD Recommendations for guidance on identifying
and disclosing the potential financial impacts of climate-related risks and opportunities. Note when
disclosing KPIs related to climate change.

Major change #2 – turning findings from the Analysis Report published in May 2018 into action points

1) Importance of ESG strategy
The new guidance material highlights the importance of companies to develop an ESG strategy
to respond to and manage financial risks from ESG issues. In particular, the board of directors
should have oversight of and assume the overall responsibility for an issuer’s ESG governance.

2) Involvement of the board
ESG Reports should include a statement from the board containing the following elements: how
the board is informed of ESG-related risks; how are ESG risks and opportunities embedded into,
or how have these impacted on, the company’s strategy; how the board reviews progress
against goals and targets

3) Set out the Reporting Boundary
An issuer’s board should, based on the issuer’s ESG risks identified by it, decide on and disclose
the operational boundaries of its ESG report in view of its individual circumstances.

4) Report on each of the “Comply or Explain” provisions
HKEX lists out its expectations for disclosure on policy; compliance with relevant laws and
regulations that have a significant impact on the issuer; and KPIs. It should be noted that failure
to comply disclose the required information without explanation is a breach of the Listing Rules.

5) Emission factors for operations outside Hong Kong
Issuers having operations outside Hong Kong may refer to international resource links set out in
the HKEX’s ESG web resources for methods to calculate the emissions of their operations in
other countries. However, HKEX website does not contain the emission factors of all countries in
the world and expert advice may be sought as appropriate.

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