ABOUT THE INDEX

The “HSBC GBA ESG Index” (the Index) was launched with the collaboration of HSBC and CECEPEC to evaluate the overall Environment, Social and Governance (ESG) performance of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA). It aims to offer an integrated view of the region’s ESG development, and thereby raise public awareness towards best practices.

HSBC GBA ESG Index – Methodology

The Guangdong-Hong Kong-Macao Greater Bay Area (GBA) plays an important part in helping China achieve its “carbon dioxide peaking and carbon neutrality” (dual carbon goals) and Sustainable Development Goals (SDGs) by virtue of its leadership in environmental, social and governance (ESG) and sustainable development.

The GBA is one of the most open regions in China and one of the strongest regional economies. This, coupled with its robust financial infrastructure, multiple industrial clusters, and highly integrated supply chains, makes the GBA uniquely qualified to help China achieve the aforementioned dual carbon goals and SDGs. As a gateway to global capital markets, Hong Kong has the largest pool of green and sustainability bonds in the Asia-Pacific region. The Pearl River Delta (PRD) is at the forefront of China’s hi-tech innovation and advanced manufacturing and services. New energy companies and sustainable supply chains in the region stand to benefit from the green shift and industrial transformation currently taking place throughout China. Sustainable development is a strategic pillar of the GBA. As such, there is an urgent need for a system that can, firstly, evaluate the status of sustainable development initiatives within the GBA region and, secondly, track improvements in these.

In this context, The Hongkong and Shanghai Banking Corporation Limited (HSBC) has partnered with CECEP Environmental Consulting Group Limited (CECEPEC) to develop a new index1 that evaluates the overall ESG and sustainability performance in the GBA. The HSBC Greater Bay Area ESG Index (the Index) will provide insights into overall market trends and policy direction, as well as analysis by city, industry and company. This first-of-its-kind ESG indexing system can serve as a practical guide for institutions, companies and individuals to improve their approach to ESG. [1] The methodology of the Index was independently developed by CECEPEC.

Methodology

The GBA ESG Regional Index, GBA ESG City Sub-indices, and GBA ESG Industry Sub-indices, were compiled. The sustainable development of the GBA, 9+2 cities and key sectors in the region is comprehensively analysed using five first-level indicators: Policy Economic & social development Green & sustainable finance Environment Corporate governance

The ESG performance of companies is evaluated from a micro perspective Using the following five first-level indicators: environmental, social, governance, green and sustainable finance, and external assurance. To these, an adjustment indicator, ESG reputation, is added, which takes negative or controversial ESG events into consideration: Environmental Social Governance Green & sustainable finance External assurance Adjustment indicator ESG Reputation

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