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Application of the Global Reporting Initiative Standards and Sustainability Disclosure Performance: An Analysis of the Largest Chinese Companies Listed in Hong Kong

  • Lai Yee Choy EMAIL logo
Published/Copyright: August 14, 2023
Accounting, Economics, and Law: A Convivium
From the journal Accounting, Economics, and Law: A Convivium

Abstract

In the wake of rising demand for corporate social responsibility, international organizations have been set up for establishing sustainability reporting standards. The standards issued by the global reporting initiative (‘GRI’) have become the most prevalently referred to sustainability reporting standards across the globe. Even though some research studies have investigated the impact of applying the GRI Standards on sustainability reporting performance, few studies have focused on companies listed in Hong Kong, an international financial center. The purpose of this article is to examine the extent to which Hong Kong-listed companies have applied the GRI Standards and how such practice has affected their sustainability disclosure quality. As an introductory study on this subject in Hong Kong, the current research focuses on the 100 largest Hong Kong-listed Chinese companies. This study shows that the rate of applying the GRI Standards among the sample companies has fluctuated in a narrow range over the past five years, and the sustainability reporting performance of companies which apply the GRI Standards outperformed their peers not applying the GRI Standards. Furthermore, the results indicate that government ownership and industry have an impact on the sample companies’ preference for referring to the GRI Standards.

Keywords: corporate social responsibility (‘CSR’) reporting; environmental, social, and governance (‘ESG’) reporting; Global Reporting Initiative (‘GRI’); listed companies; sustainability reporting; The Stock Exchange of Hong Kong
JEL Classification: G18; K29; M19; M49
Corresponding author: Lai Yee Choy, The Chinese University of Hong Kong, Hong Kong, Hong Kong, E-mail:

Appendix A: ESG disclosure items under the HKEX’s ESG Reporting Guide

Mandatory disclosure items

Disclosure item Major information required
Governance structure The board’s role in overseeing ESG issues, ESG management approach and strategies, and mechanism of ESG progress review
Reporting principle The application of materiality assessment, quantification, and consistency in the ESG report
Reporting boundary The ESG report’s scope and coverage

‘comply or explain’ disclosure items

Subject area Aspect Disclosure item Major information required
A. Environmental A1 Emissions General disclosure Policies and compliance with relevant regulations relating to air and greenhouse gas emissions, discharges into water and land, and generation of hazardous and non-hazardous waste
6 KPIs

  1. Types of emissions and respective data;

  2. Greenhouse gas emissions;

  3. Hazardous waste produced;

  4. Non-hazardous waste produced;

  5. Emission targets and steps taken to achieve them;

  6. How wastes are handled, reduction targets and steps taken to achieve them.
A2 Use of resources General disclosure Policies on efficient use of resources
5 KPIs

  1. Energy consumption;

  2. Water consumption;

  3. Energy use efficiency targets and steps taken to achieve them;

  4. Water efficiency targets and steps taken to achieve them;

  5. Packaging material used.
A3 The environment and natural resources General disclosure Policies on minimising the company’s significant impacts on the environment and natural resources
1 KPI The company’s significant impacts on the environment and natural resources and the actions taken to manage them
A4 Climate change General disclosure Policies on identification and mitigation of significant climate-related issues impacting the company
1 KPI Significant climate-related issues impacting the company and the actions taken to manage them
B. Social Employment and Labour Practices B1 Employment General disclosure Policies and compliance with relevant regulations relating to employee benefits and welfare
2 KPIs

  1. Workforce by gender, employment type, age group and geographical region;

  2. Employee turnover rate by gender, age group and geographical region.
B2 Health and safety General disclosure Policies and compliance with relevant regulations relating to providing a safe working environment and protecting employees from occupational hazards
3 KPIs

  1. Work-related fatalities;

  2. Lost days due to work injury;

  3. Occupational health and safety measures.
B3 Development and training General disclosure Policies on improving employees’ knowledge and skills
2 KPIs

  1. Percentage of employees trained by gender and employee category;

  2. Average training hours by gender and employee category.
B4 Labour standards General disclosure Policies and compliance with relevant regulations relating to preventing child and forced labour
2 KPIs

  1. Measures to review employment practices to avoid child and forced labour;

  2. Steps taken to eliminate such practices.
Operating practices B5 Supply chain management General disclosure Policies on managing environmental and social risks of the supply chain
4 KPIs

  1. Number of suppliers by geographical region;

  2. practices relating to engaging suppliers;

  3. practices used to identify environmental and social risks along the supply chain;

  4. practices used to promote environmentally preferable products and services when selecting suppliers.
B6 Product responsibility General disclosure Policies and compliance with relevant regulations relating to health and safety, advertising, labelling and privacy matters
5 KPIs

  1. Products sold or shipped subject to recalls for safety and health reasons;

  2. Products and service related complaints received;

  3. Practices relating to observing and protecting intellectual property rights;

  4. Quality assurance process and recall procedures;

  5. Consumer data protection and privacy policies
B7 Anti-corruption General disclosure Policies and compliance with regulations relating to bribery, extortion, fraud and money laundering
3 KPIs

  1. Legal cases regarding corrupt practices brought against the company or its employees;

  2. Preventive measures and whistle-blowing procedures;

  3. Anti-corruption training provided to directors and staff.
Community B8 Community investment General disclosure Policies on community engagement to understand the needs of the communities
2 KPIs

  1. Focus areas of contribution;

  2. Resources contributed to the focus area.

Appendix B: Companies included in The Hang Seng China (Hong Kong-listed) 100 Index (‘HSCHK100’)

Note: The following table extracts the information about the Hang Seng China (Hong Kong-listed) 100 Index (‘HSCHK100’) (Hang Seng Indexes Company Limited, 2022b) in financial year 2021 from the Wind database, supplemented with the information obtained from the HKEX’s website (Hong Kong Exchanges and Clearing Limited, HKEX – Market Data – Equities) and the companies’ corporate websites and annual reports.

Stock code Company name Listing date Industry Type of company Ownership Dual Listing in the PRC (Y/N) Company profile Staff headcount Reporting currency Total revenues (billion) Total assets (billion)
0135 Kunlun Energy Company Limited 13 Mar 1973 Utilities Red Chip Government N An international energy company controlled by PetroChina Limited 32,136 CNY 139 133
0151 Want Want China Holdings Limited 26 Mar 2008 Consumer Staples Other HK-listed Mainland Co. Private N One of China’s leading food and beverage manufacturers 41,193 CNY 22 31
0168 Tsingtao Brewery Company Limited 15 Jul 1993 Consumer Staples H Share Government Y (Stock Code: 600600.SH) Ranked first in the domestic beer industry in scale and market share 32,947 CNY 30 47
0175 Geely Automobile Holdings Limited 23 Feb 1973 Consumer discretionary Other HK-listed Mainland Co. Private N A leading enterprise of self-owned brand passenger vehicles in China 44,000 CNY 102 134
0241 Alibaba Health Information Technology Limited 6 Jul 1972 Healthcare Other HK-listed Mainland Co. Private N Offering Internet solutions for the medical and pharmaceutical industry 1033 CNY 16 18
0267 CITIC Limited 26 Feb 1986 Conglomerate Red Chip Government N China’s largest comprehensive enterprise 136,637 HKD 709 10,686
0268 Kingdee International Software Group Co. Ltd. 15 Feb 2001 Information Technology Other HK-listed Mainland Co. Private N A leading management software and e-commerce application solution provider in Asia Pacific region 11,588 CNY 4 11
0270 Guangdong Investment Ltd. 19,73a Utilities Red Chip Government N Engaged in water resources, infrastructure, property investment and development, department store retail, hotel operation and management 10,236 HKD 30 130
0285 BYD Electronic (International) Company Limited 20 Dec 2007 Information Technology Other HK-listed Mainland Co. Private N An internationally leading provider of mobile phone parts and modules manufacturing and mobile phone assembly services 91,000 CNY 89 41
0291 China Resources Beer (Holdings) Company Limited 1992 (group restructured and renamed in 2015)b Consumer Staples Red Chip Government N A leading consumer goods enterprise in China 25,000 CNY 33 51
0322 Tingyi (Cayman Islands) Holdings Corp. 5 Feb 1996 Consumer Staples Other HK-listed Mainland Co. Private N Ranked first in the market of instant noodles and ready to drink tea drinks in China 62,107 CNY 74 60
0384 China Gas Holdings Ltd. 20 Oct 1995 Utilities Other HK-listed Mainland Co. Private N A leading natural gas operating service provider in China 74,331 HKD 70 141
0386 China Petroleum & Chemical Corporation 19 Oct 2000 Energy H Share Government Y (Stock Code: 600028.SH) One of the largest integrated energy and chemical companies in China 385,691 CNY 2741 1889
0586 China Conch Venture Holdings Limited 19 Dec 2013 Industrials Other HK-listed Mainland Co. Private N Engaged in waste heat power generation, waste incineration, new green energy-saving building materials, and port trade 7090 CNY 7 69
0656 Fosun International Limited 16 Jul 2007 Conglomerate Other HK-listed Mainland Co. Private N Engaged in financial, property, steel, and healthcare businesses 96,000 CNY 161 806
0688 China Overseas Land & Investment Ltd. 20 Aug 1992 Properties & Construction Red Chip Government N A national real estate brand with cross regional and national first-class real estate development qualification 5692 CNY 242 870
0700 Tencent Holdings Ltd 16 Jun 2004 Information Technology Other HK-listed Mainland Co. Private N One of China’s largest Internet integrated service providers 112,771 CNY 560 1612
0728 China Telecom Corporation Limited 15 Nov 2002 Telecommunications H Share Government Y (Stock Code: 601728.SH) A leading large-scale full business integrated intelligent information service operator 278,922 CNY 440 762
0762 China Unicom (Hong Kong) Limited 22 Jun 2000 Telecommunications Red Chip Government N Selected as the ‘top 500 enterprises in the world’ for many consecutive years, ranking 260th among the Fortune 500 in 2021 243,381 CNY 328 591
0772 China Literature Limited 8 Nov 2017 Consumer discretionary Other HK-listed Mainland Co. Private N Providing the company’s content to the largest network audience of original network literature works in China 2000 CNY 9 23
0788 China Tower Corporation Limited 8 Aug 2018 Telecommunications H Share Private N The largest communication tower infrastructure service provider in the world 23,300 CNY 87 323
0836 China Resources Power Holdings Co. Ltd. 12 Nov 2003 Utilities Red Chip Government N A flagship company of the China Resources Group engaged in the investment, development and operation of power plants 21,252 HKD 90 287
0857 Petrochina Company Limited 7 Apr 2000 Energy H Share Government Y (Stock Code: 601857.SH) The largest oil and gas producer and seller in China 417,173 CNY 2614 2502
0868 XinYi Glass Holdings Limited 3 Feb 2005 Industrials Other HK-listed Mainland Co. Private N Engaged in the manufacturing and sales of glass 14,706 HKD 30 56
0881 Zhongsheng Group Holdings Ltd 26 Mar 2010 Consumer discretionary Other HK-listed Mainland Co. Private N One of China’s leading national automobile dealers groups 39,668 CNY 175 85
0883 CNOOC Limited 28 Feb 2001 Energy Red Chip Government Y (Stock Code: 600938.SH) The largest offshore crude oil and natural gas producer in China, and one of the world’s largest independent oil and gas exploration and production groups 19,086 CNY 246 787
0884 CIFI Holdings (Group) Co. Ltd. 23 Nov 2012 Properties & Construction Other HK-listed Mainland Co. Private N A national real estate development enterprise mainly engaged in the development of medium and high-end boutique residential buildings 25,532 CNY 108 433
0909 Ming Yuan Cloud Group Holdings Limited 25 Sep 2020 Information Technology Other HK-listed Mainland Co. Private N The largest software solution provider of Chinese real estate developers 4247 CNY 2 7
0914 Anhui Conch Cement Company Limited 21 Oct 1997 Properties & Construction H Share Government Y (Stock Code: 600585.SH) Engaged in the production and sales of cement and commercial clinker 46,714 CNY 168 231
0916 China Longyuan Power Group Corporation Limited 10 Dec 2009 Utilities H Share Government Y (Stock Code: 001289.SZ) The first state-owned new energy power generation enterprise listed overseas 8053 CNY 37 190
0939 China Construction Bank Corporation 27 Oct 2005 Financials H Share Government Y (Stock Code: 601939.SH) A leading and internationally renowned large-scale joint-stock commercial bank 351,252 CNY 765 30,254
0941 China Mobile Limited 23 Oct 1997 Telecommunications Red Chip Government Y (Stock Code: 600941.SH) The world’s leading communication and information service enterprise 449,934 CNY 848 1841
0960 Longfor Group Holdings Limited 19 Nov 2009 Properties & Construction Other HK-listed Mainland Co. Private N A professional real estate company focusing on product and service quality 44,065 CNY 223 876
0968 Xinyi solar Holdings Limited 12 Dec 2013 Industrials Other HK-listed Mainland Co. Private N One of the world’s largest manufacturers of solar photovoltaic glass 7072 HKD 16 49
0981 Semiconductor Manufacturing International Corporation 18 Mar 2004 Information Technology Red Chip Government Y (Stock Code: 688981.SH) One of the leading foundry enterprises in the world 17,681 USD 5 36
0992 Lenovo Group Limited 14 Feb 1994 Information Technology Red Chip Government N Engaged in personal computers and related businesses, selling products to more than 180 countries and regions 71,500 USD 61 38
0998 China Citic Bank Corporation Limited 27 Apr 2007 Financials H Share Government Y (Stock Code: 601998.SH) One of the earliest emerging commercial banks established in China’s reform and opening up 59,258 CNY 205 8043
1024 Kuaishou Technology 5 Feb 2021 Information Technology Other HK-listed Mainland Co. Private N A leading company operating content communities and social platforms 28,098 CNY 81 93
1044 Hengan International Group Company Limited 8 Dec 1998 Consumer Staples Other HK-listed Mainland Co. Private N A leading company in women’s tampon and baby diapers market in China 23,000 CNY 21 42
1066 Shandong Weigao Group Medical Polymer Co. Limited 27 Feb 2004 Healthcare H Share Private N Engaged in researching, developing, producing and selling single-use medical devices 11,123 CNY 13 30
1088 China shenhua Energy Company Limited 15 Jun 2005 Energy H Share Government Y (Stock Code: 601088.SH) The largest coal production enterprise and sales enterprise in China, and the second largest coal listed company in the world 77,872 CNY 335 611
1093 CSPC Pharmaceutical Group Limited 21 Jun 1994 Healthcare Other HK-listed Mainland Co. Private N A leading company in China’s pharmaceutical industry 24,746 CNY 28 35
1109 China Resources Land Limited 8 Nov 1996 Properties & Construction Red Chip Government N One of the most powerful comprehensive real estate developers in mainland China 49,478 CNY 212 950
1177 Sino Biopharmaceutical Limited 8 Dec 2003 Healthcare Other HK-listed Mainland Co. Private N A comprehensive pharmaceutical enterprise developing, producing and selling biological drugs, modern Chinese medicine preparations and chemical drugs 25,579 CNY 27 61
1193 China Resources Gas Group Limited 7 Nov 1994 Utilities Red Chip Government N A leading gas utilities group in China 52,354 HKD 78 106
1209 China Resources Mixc Lifestyle Services Limited 9 Dec 2020 Properties & Construction Red Chip Government N A leading property management and commercial operation service provider in China 28,654 CNY 9 22
1211 BYD Company Limited 31 Jul 2002 Consumer discretionary H Share Private Y (Stock Code: 002594.SZ) Engaged in the manufacture and sales of transportation equipment 288,186 CNY 211 296
1288 Agricultural Bank of China Limited 16 Jul 2010 Financials H Share Government Y (Stock Code: 601288.SH) One of the major comprehensive financial service providers in China 455,174 CNY 722 29,069
1347 Hua Hong semiconductor Limited 15 Oct 2014 Information Technology Red Chip Government N A leading foundry enterprise in the world 6084 USD 2 6
1378 China Hongqiao Group Limited 24 Mar 2011 Materials Other HK-listed Mainland Co. Private N A leading manufacturer of aluminum products in China 42,650 CNY 114 188
1398 Industrial and Commercial Bank of China Limited 27 Oct 2006 Financials H Share Government Y (Stock Code: 601398.SH) One of the largest commercial banks in China and one of the world’s leading banks 434,089 CNY 861 35,171
1579 Yihai International Holding Ltd. 13 Jul 2016 Consumer Staples Other HK-listed Mainland Co. Private N A leading compound seasoning manufacturer in China 2499 CNY 6 5
1658 Postal savings Bank of China Co., Ltd. 28 Sep 2016 Financials H Share Government Y (Stock Code: 601658.SH) A leading large-scale retail bank in China 178,252 CNY 319 12,588
1772 Ganfeng Lithium Group Co., Ltd. 11 Oct 2018 Materials H Share Private Y (Stock Code: 002460.SZ) The world’s leading manufacturer of lithium compounds 7870 CNY 11 39
1801 Innovent Biologics, Inc. 31 Oct 2018 Healthcare Other HK-listed Mainland Co. Private N A leading biopharmaceutical company in China 5568 CNY 4 16
1810 Xiaomi Corporation 9 Jul 2018 Information Technology Other HK-listed Mainland Co. Private N A rapidly growing Internet company with mobile phones, intelligent hardware and Internet of things (IoTs) platforms as the core 33,427 CNY 328 293
1833 Ping An Healthcare And Technology Company Limited 4 May 2018 Healthcare Other HK-listed Mainland Co. Private N The pioneer of China’s Internet medical and health market 3425 CNY 7 18
1919 COSCO SHIPPING Holdings Co., Ltd. 30 Jun 2005 Industrials H Share Government Y (Stock Code: 601919.SH) Engaged in shipping and terminal operation, operating more than 230 international routes 30,980 CNY 334 414
1929 Chow Tai Fook Jewellery Group Limited 15 Dec 2011 Consumer discretionary Other HK-listed Mainland Co. Private N A leading jeweller in China 27,900 HKD 70 64
2007 Country Garden Holdings Co. Ltd 20 Apr 2007 Properties & Construction Other HK-listed Mainland Co. Private N One of China’s leading comprehensive real estate developers 100,705 CNY 523 1948
2015 Li Auto Inc. 12 Aug 2021 Consumer discretionary Other HK-listed Mainland Co. Private N Engaged in manufacturing and selling luxury intelligent electric vehicles in China 11,901 CNY 27 62
2018 AAC Technologies Holdings Inc. 9 Aug 2005 Industrials Other HK-listed Mainland Co. Private N A leading technology company in the world providing micro technology components 37,591 CNY 18 42
2020 ANTA sports Products Limited 10 Jul 2007 Consumer discretionary Other HK-listed Mainland Co. Private N One of the leading brand sports footwear enterprises in China 52,000 CNY 49 63
2202 China Vanke Co., Ltd. 25 Jun 2014 Properties & Construction H Share Private Y (Stock Code: 000002.SZ) A leading real estate development and property management company in China 139,494 CNY 453 1939
2313 Shenzhou International Group Holdings Ltd. 24 Nov 2005 Consumer discretionary Other HK-listed Mainland Co. Private N The largest vertical integrated knitting manufacturer in China 95,820 CNY 24 42
2318 Ping An Insurance (Group) Company of China, Ltd. 24 Jun 2004 Financials H Share Private Y (Stock Code: 601318.SH) One of the personal financial life service groups with the most complete financial licenses in China 355,982 CNY 1,288 10,142
2319 China Mengniu Dairy Co. Ltd. 10 Jun 2004 Consumer Staples Other HK-listed Mainland Co. Government N Engaged in the production and sales of dairy products in China 44,629 CNY 88 98
2328 PICC Property and Casualty Company Limited 6 Nov 2003 Financials H Share Government N A core member and landmark main business of PICC, the world’s top 500 171,508 CNY 450 683
2331 Li Ning Co. Ltd. 28 Jun 2004 Consumer discretionary Other HK-listed Mainland Co. Private N One of the leading sports brand enterprises in China 4019 CNY 23 30
2333 Great Wall Motor Company Limited 15 Dec 2003 Consumer discretionary H Share Private Y (Stock Code: 601633.SH) A well-known SUV manufacturing enterprise in the world 77,934 CNY 136 175
2359 Wuxi Apptec Co., Ltd. 13 Dec 2018 Healthcare H Share Private Y (Stock Code: 603259.SH) The world’s leading pharmaceutical and medical device research and development open capability and technology platform enterprise 34,912 CNY 23 55
2382 Sunny Optical Technology (Group) Company Limited 15 Jun 2007 Industrials Other HK-listed Mainland Co. Private N A leading optical product manufacturing enterprise in China 24,664 CNY 37 39
2601 China Pacific Insurance (Group) Co., Ltd. 23 Dec 2009 Financials H Share Private Y (Stock Code: 601601.SH) A leading comprehensive insurance group listed in China 107,000 CNY 436 1946
2618 Jd Logistics, Inc. 28 May 2021 Industrials Other HK-listed Mainland Co. Private N China’s leading technology driven supply chain solution and logistics service provider 200,000 CNY 105 77
2628 China Life Insurance Company Limited 18 Dec 2003 Financials H Share Government Y (Stock Code: 601628.SH) A leading enterprise in the domestic life insurance industry 103,262 CNY 825 4891
2688 ENN Energy Holdings Limited 3 Jun 2002 Utilities Other HK-listed Mainland Co. Private N One of the largest clean energy distributors in China 28,735 CNY 93 100
2899 Zijin Mining Group Company Limited 23 Dec 2003 Materials H Share Government Y (Stock Code: 601899.SH) A large mining group mainly engaged in the exploration and development of metal mineral resources 43,876 CNY 225 209
3323 China National Building Material Company Limited 23 Mar 2006 Properties & Construction H Share Government N A leading enterprise in China’s building materials industry 153,109 CNY 274 463
3328 Bank of Communications Co., Ltd. 23 Jun 2005 Financials H Share Government Y (Stock Code: 601328.SH) One of the major financial service providers in China 90,238 CNY 270 11,666
3690 Meituan 20 Sep 2018 Information Technology Other HK-listed Mainland Co. Private N China’s leading e-commerce platform for life services 100,033 CNY 179 241
3692 Hansoh Pharmaceutical Group Company Limited 14 Jun 2019 Healthcare Other HK-listed Mainland Co. Private N One of the few research and development driven Chinese pharmaceutical companies 12,150 CNY 10 27
3800 GCL Technology Holdings Limited 13 Nov 2007 Industrials Other HK-listed Mainland Co. Private N One of the world’s largest solar photovoltaic enterprises 8863 CNY 20 64
3888 Kingsoft Corporation Limited 9 Oct 2007 Information Technology Other HK-listed Mainland Co. Private N One of the most famous software enterprises in China 7054 CNY 6 37
3968 China Merchants Bank Co., Ltd. 22 Sep 2006 Financials H Share Private Y (Stock Code: 600036.SH) The first joint-stock commercial bank fully held by corporate legal persons in China 103,669 CNY 327 9249
3988 Bank of China Limited 1 Jun 2006 Financials H Share Government Y (Stock Code: 601988.SH) The most international and diversified bank in China 306,322 CNY 606 26,722
6030 CITIC Securities Company Limited 6 Oct 2011 Financials H Share Government Y (Stock Code: 600030.SH) The largest securities company in China 23,696 CNY 97 1279
6098 Country Garden Services Holdings Company Limited 19 Jun 2018 Properties & Construction Other HK-listed Mainland Co. Private N A leading residential property management service provider in China 223,667 CNY 29 67
6110 Topsports International Holdings Limited 10 Oct 2019 Consumer discretionary Other HK-listed Mainland Co. Private N A leader in China’s sports shoes and clothing retail market 40,348 CNY 36 18
6186 China Feihe Limited 13 Nov 2019 Consumer Staples Other HK-listed Mainland Co. Private N The largest and most widely known Chinese brand infant formula company in China 9091 CNY 23 31
6618 Jd Health International Inc. 8 Dec 2020 Healthcare Other HK-listed Mainland Co. Private N China’s largest online medical and health platform and the largest online retail pharmacy 3305 CNY 31 48
6690 Haier smart Home Co., Ltd. 23 Dec 2020 Consumer discretionary H Share Private Y (Stock Code: 600690.SH) A leading company engaged in the manufacture and sales of household electrical appliances 104,874 CNY 228 217
6862 Haidilao International Holding Ltd. 26 Sep 2018 Consumer discretionary Other HK-listed Mainland Co. Private N A leading and rapidly expanding Chinese catering brand in the world 146,584 CNY 41 28
9618 Jd.Com, Inc. 18 Jun 2020 Information Technology Other HK-listed Mainland Co. Private N The largest self- operated e-commerce enterprise in China 385,357 CNY 952 497
9626 Bilibili Inc. 29 Mar 2021 Information Technology Other HK-listed Mainland Co. Private N A landmark brand of China’s younger generation and a leading video community 12,281 CNY 19 52
9633 Nongfu spring Co., Ltd. 8 Sep 2020 Consumer Staples H Share Private N One of the largest suppliers of packaged drinking water and beverage in China 20,000 CNY 30 33
9868 Xpeng Inc. 7 Jul 2021 Consumer discretionary Other HK-listed Mainland Co. Private N One of the leading intelligent electric vehicle companies in China 13,978 CNY 21 66
9888 Baidu, Inc. 23 Mar 2021 Information Technology Other HK-listed Mainland Co. Private N The world’s largest Chinese search engine and the biggest Chinese website 45,500 CNY 124 380
9988 Alibaba Group Holding Limited 26 Nov 2019 Information Technology Other HK-listed Mainland Co. Private N Providing technical infrastructure and marketing platforms for businesses, brands and other enterprises 251,462 CNY 717 1690
9992 Pop Mart International Group Limited 11 Dec 2020 Consumer discretionary Other HK-listed Mainland Co. Private N The largest and fastest growing trend toy company in China in terms of retail value 4053 CNY 4 8
9999 Netease, Inc. 11 Jun 2020 Information Technology Other HK-listed Mainland Co. Private N A leading Internet technology company in China 32,064 CNY 88 154

  1. a Guangdong Investment Ltd. About Us. Retrieved from https://www.gdi.com.hk/en_US/about/company-snapshot/.

  2. b China Resources Beer (Holdings) Company Limited. About Us. Retrieved from https://www.crbeer.com.hk/home/aus/miles/.

Appendix C: Company Industries and Levels of Disclosure and Credibility in ESG Reporting (under GRI’s Sector Classification System)

Fernandez-Feijoo et al. (2014) adopt the sector classification system designed by the GRI, which covers a total of 37 sectors. The GRI has revised the sector classification system, and the current version (approved on 19 October 2021) covers a total of 40 sectors (GRI, 2022f). GRI’s current sector classification system has removed some sectors (e.g. household and personal products) and added some sectors (e.g. electronics, shipping, renewable energy). Meanwhile, it has merged some sectors in the previous versions to one single sector (e.g. merging water utilities sector and waste management sector to utilities sector, merging media sector and telecommunications sector to media and communication sector). It has also split some sectors (e.g. dividing the financial services sector to three sectors, including banking sector, insurance sector, and capital markets sector). This part classifies the sample companies into the sectors under GRI’s latest classification system, and analyses their level of disclosure and level of credibility by these sectors.

Three sample companies, including two conglomerates and a provider of personal care products, do not fall into any sectors under GRI’s latest sector classification system. In the current study, a sub-group ‘Other’ is created, and these three sample companies not covered by GRI’s sector classification system are categorized into ‘Other’.

A total of 16 sectors are excluded from the analysis as no sample companies fall into these sectors. They include: agriculture, aquaculture, and fishing, mining, forestry, aerospace and defense, construction, chemicals, machinery and equipment, transportation infrastructure, trucking, airlines, packaging, hotels, educational services, security services and correctional facilities, commercial services, non-profit organizations.

A note on the potential deficiencies in the following analysis is warranted here. Due to a detailed breakdown of sectors under GRI’s sector classification system, the average number of sample companies in each sector is small. On average, each sector consists of three sample companies only. The analysis grounded on those data may lack validity.

In this study, if no sample companies fall into a sector in a financial year, then the figure of that year is excluded from the calculation of the level of disclosure and level of credibility for that sector. This situation is noted in three sectors, including: (i) trading, distribution, and logistics; (ii) household durables; and (iii) managed health care. No sample companies operate in trading, distribution, and logistics in 2017–2020, and only one sample company is categorized into this sector in 2021. In 2021, that sample company applied the GRI Standards and also engaged in independent report assurance. This means that the level of disclosure and level of credibility for this sector in 2021 are both 100 %. As the figures in 2017–2020 are not counted, the average level of disclosure and level of credibility of this sector in the sampling period are both 100 %. None of the sample companies operates in the household durables sector in 2017–2019, and only two sample companies fall into this category in 2020–2021. The average level of disclosure and level of credibility for this sector only consider the average figures of those two sample companies in 2020–2021. Likewise, no sample companies operate in the managed health care sector in 2017, and only one sample company falls into this category in 2018–2021. The average level of disclosure and level of credibility for this sector are calculated based on the average figures of that sample company in 2018–2021.

During the sampling years, the average rate of using the GRI framework among all sample companies is 36 %, and the average rate of engaging in report assurance is 31 %. The top three sectors that attain the highest rate of applying the GRI Standards are coal (100 %), trading, distribution, and logistics (100 %), and banking (93 %). The top three sectors with the highest rate of engaging in report assurance are coal (100 %), trading, distribution, and logistics (100 %), and shipping (100 %). In six sectors, no sample companies used the GRI framework. They are capital markets, construction materials, managed health care, medical equipment and services, retail, and restaurants. In six sectors, including textiles and apparel, automotive, pharmaceuticals, managed health care, medical equipment and services, and restaurants, no sample companies engaged in independent report assurance. Table 15 and Graph 5 present the sample companies’ rate of disclosure and rate of credibility under GRI’s sector classification system in 2017–2021.

Table 15:

Sample companies’ rate of applying the GRI Standards and rate of assurance by sectors under GRI’s Sector Classification System, with corporate behavior as asserted by Fernandez-Feijoo et al. (2014).

Sectora Average in 2017–2021 Level of disclosure (high/low)c Level of credibility (high/low)d Reporting behaviore
Number of sample companies Note Level of disclosure (rate of applying the GRI Standards)b Level of credibility (rate of engaging in report assurance)b
1 Oil and gas 3 53 % 53 % High High Leading
2 Coal 1 100 % 100 % High High Leading
3 Food and beverages 7 17 % 3 % Low Low Novice
4 Textiles and apparel 3 25 % 0 % Low Low Novice
5 Banking 8 93 % 98 % High High Leading
6 Insurance 4 85 % 50 % High High Leading
7 Capital markets 1 0 % 80 % Low High Cautious
8 Utilities 7 29 % 14 % Low Low Novice
9 Renewable energy 3 27 % 13 % Low Low Novice
10 Metal processing 3 13 % 37 % Low High Cautious
11 Construction materials 3 0 % 7 % Low Low Novice
12 Automotive 3 61 % 0 % High Low Chattering
13 Pharmaceuticals 6 19 % 0 % Low Low Novice
14 Electronics 7 33 % 30 % Low Low Novice
15 Media and communication 5 42 % 42 % High High Leading
16 Software 6 32 % 10 % Low Low Novice
17 Real estate 7 22 % 13 % Low Low Novice
18 Shipping 1 80 % 100 % High High Leading
19 Trading, distribution, and logistics 0 No sample companies fall into this category in 2017–2020, and only one falls into this category in 2021 100 % 100 % High High Leading
20 Household durables 1 No sample companies fall into this category in 2017–2019, and only two fall into this category in 2020–2021 25 % 0 % Low Low Novice
21 Managed health care 1 No sample companies fall into this category in 2017, and only one falls into this category in 2018–2021 0 % 0 % Low Low Novice
22 Medical equipment and services 1 0 % 0 % Low Low Novice
23 Retail 2 0 % 10 % Low Low Novice
24 Restaurants 1 0 % 0 % Low Low Novice
25 Other 3 This category includes two conglomerates and one personal care products provider 40 % 13 % High Low Chattering
Average 36 % 31 %

  1. Remarks:aGRI’s latest sector classification system covers a total of 40 sectors. Three sample companies, including two conglomerates and one provider of personal care products, do not fall into any sectors defined by the GRI. In the current study, a sub-group ‘Other’ is created, and these three sample companies not covered by the GRI’s sector classification system are categorized into ‘Other’.No sample companies fall into the following 16 sectors and hence these sectors are not displayed in this table and excluded from the analysis: Agriculture, aquaculture, and fishing, mining, forestry, aerospace and defense, construction, chemicals, machinery and equipment, transportation infrastructure, trucking, airlines, packaging, hotels, educational services, security services and correctional facilities, commercial services, and non-profit organizations.bIf no sample companies fall into a sector in a financial year, then the figure of that year is excluded from the calculation of the level of disclosure and level of credibility. Take the trading, distribution, and logistics sector as an example. No sample companies operate in trading, distribution, and logistics in 2017–2020, and only one sample company is categorized into this sector in 2021. In 2021, that sample company applied the GRI Standards and also engaged in independent report assurance. This means that the level of disclosure and level of credibility for this sector in 2021 are both 100 %. As the figures in 2017–2020 are not counted, the average level of disclosure and level of credibility of this sector in the sampling period are both 100 %.cIf the average level of disclosure in 2017–2021 is higher than the average of all industries (36 %), then it is regarded as high level of disclosure, and vice versa.dIf the average level of credibility in 2017–2021 is higher than the average of all industries (31 %), then it is regarded as high level of credibility, and vice versa.eFour types of corporate behavior as proposed by Fernandez-Feijoo et al. (2014) are: leading (high disclosure and high credibility), cautious (low disclosure and high credibility), chattering (high disclosure and low credibility), and novice (low disclosure and low credibility).

Graph 5: Sample companies’ rate of applying the GRI Standards and rate of assurance by sectors under GRI’s Sector Classification System, with corporate behavior as asserted by Fernandez-Feijoo et al. (2014). Remarks: In this graph, the sample companies are classified into 24 sectors according to GRI’s Sector Classification System, with three companies not covered by any sectors categorized into a sub-group ‘Other’. By contrast, Graph 4 in the main text presents the sample companies’ level of disclosure and level of credibility by 12 industries as per the Hang Seng Industry Classification System.
Graph 5:

Sample companies’ rate of applying the GRI Standards and rate of assurance by sectors under GRI’s Sector Classification System, with corporate behavior as asserted by Fernandez-Feijoo et al. (2014). Remarks: In this graph, the sample companies are classified into 24 sectors according to GRI’s Sector Classification System, with three companies not covered by any sectors categorized into a sub-group ‘Other’. By contrast, Graph 4 in the main text presents the sample companies’ level of disclosure and level of credibility by 12 industries as per the Hang Seng Industry Classification System.

The sample companies in seven sectors, including oil and gas, coal, banking, insurance, media and communication, shipping, and trading, distribution, and logistics, attain an average rate of applying the GRI Standards and an average rate of report assurance higher than the average of all industries. Their reporting practices are regarded as leading behavior.

In 14 sectors, the sample companies have an average rate of applying the GRI Standards and an average rate of engaging in report assurance below the average of all industries, thus their reporting practices are classified as novice behavior. They include food and beverages, textiles and apparel, utilities, renewable energy, construction materials, pharmaceuticals, electronics, software, real estate, household durables, managed health care, medical equipment and services, retail, and restaurants.

Two sectors, including capital markets and metal processing, exhibit reporting practices of cautious behavior (i.e. level of disclosure below the average of all industries and level of credibility above the average of all industries).

The automotive sector and the sub-group ‘Other’ demonstrate ESG reporting practices of chattering behavior (i.e. level of disclosure above the average of all industries and level of credibility below the average of all industries).

To test the validity of these results, this study analyses the modified results for the whole sample disentangling the three sample companies classified into the sub-group ‘Other’ (see Table 16 and Graph 6). Overall, the modified results excluding the sub-group ‘Other’ are largely consistent with those including all sample companies. When the sub-group ‘Other’ is excluded, the average rate of using the GRI framework among all sample companies is 36 % (same to that of the whole sample), and the average rate of engaging in report assurance is 32 % (whole sample: 31 %). In addition, the sample companies that fall into the four types of behavior (i.e. leading, cautious, novice, and chattering) by sectors are same to those based on the results deriving from the whole sample.

Table 16:

Sample companies’ rate of applying the GRI Standards and rate of assurance by sectors under GRI’s Sector Classification System (excluding 3 sample companies classified into sub-group ‘Other’), with corporate behavior as asserted by Fernandez-Feijoo et al. (2014).

Sectora Average in 2017–2021 Level of disclosure (high/low)c Level of credibility (high/low)d Reporting behaviore
Number of sample companies Note Level of disclosure (rate of applying the GRI Standards)b Level of credibility (rate of engaging in report assurance)b
1 Oil and gas 3 53 % 53 % High High Leading
2 Coal 1 100 % 100 % High High Leading
3 Food and beverages 7 17 % 3 % Low Low Novice
4 Textiles and apparel 3 25 % 0 % Low Low Novice
5 Banking 8 93 % 98 % High High Leading
6 Insurance 4 85 % 50 % High High Leading
7 Capital markets 1 0 % 80 % Low High Cautious
8 Utilities 7 29 % 14 % Low Low Novice
9 Renewable energy 3 27 % 13 % Low Low Novice
10 Metal processing 3 13 % 37 % Low High Cautious
11 Construction materials 3 0 % 7 % Low Low Novice
12 Automotive 3 61 % 0 % High Low Chattering
13 Pharmaceuticals 6 19 % 0 % Low Low Novice
14 Electronics 7 33 % 30 % Low Low Novice
15 Media and communication 5 42 % 42 % High High Leading
16 Software 6 32 % 10 % Low Low Novice
17 Real estate 7 22 % 13 % Low Low Novice
18 Shipping 1 80 % 100 % High High Leading
19 Trading, distribution, and logistics 0 No sample companies fall into this category in 2017–2020, and only one falls into this category in 2021 100 % 100 % High High Leading
20 Household durables 1 No sample companies fall into this category in 2017–2019, and only two fall into this category in 2020–2021 25 % 0 % Low Low Novice
21 Managed health care 1 No sample companies fall into this category in 2017, and only one falls into this category in 2018–2021 0 % 0 % Low Low Novice
22 Medical equipment and services 1 0 % 0 % Low Low Novice
23 Retail 2 0 % 10 % Low Low Novice
24 Restaurants 1 0 % 0 % Low Low Novice
Average 36 % 32 %

  1. Remarks:aGRI’s latest sector classification system covers a total of 40 sectors. Three sample companies, including two conglomerates and one provider of personal care products, do not fall into any sectors defined by the GRI. These three sample companies not covered by the GRI’s sector classification system are excluded from this analysis.No sample companies fall into the following 16 sectors and hence these sectors are not displayed in this table and excluded from the analysis: Agriculture, aquaculture, and fishing, mining, forestry, aerospace and defense, construction, chemicals, machinery and equipment, transportation infrastructure, trucking, airlines, packaging, hotels, educational services, security services and correctional facilities, commercial services, and non-profit organizations.bIf no sample companies fall into a sector in a financial year, then the figure of that year is excluded from the calculation of the level of disclosure and level of credibility. Take the trading, distribution, and logistics sector as an example. No sample companies operate in trading, distribution, and logistics in 2017–2020, and only one sample company is categorized into this sector in 2021. In 2021, that sample company applied the GRI Standards and also engaged in independent report assurance. This means that the level of disclosure and level of credibility for this sector in 2021 are both 100 %. As the figures in 2017–2020 are not counted, the average level of disclosure and level of credibility of this sector in the sampling period are both 100 %.cIf the average level of disclosure in 2017–2021 is higher than the average of all industries (36 %), then it is regarded as high level of disclosure, and vice versa.dIf the average level of credibility in 2017–2021 is higher than the average of all industries (32 %), then it is regarded as high level of credibility, and vice versa.eFour types of corporate behavior as proposed by Fernandez-Feijoo et al. (2014) are: leading (high disclosure and high credibility), cautious (low disclosure and high credibility), chattering (high disclosure and low credibility), and novice (low disclosure and low credibility).

Graph 6: Sample companies’ rate of applying the GRI Standards and rate of assurance by sectors under GRI’s Sector Classification System (excluding 3 sample companies classified into sub-group ‘Other’), with corporate behavior as asserted by Fernandez-Feijoo et al. (2014). Remarks: In this graph, the sample companies are classified into 24 sectors according to GRI’s Sector Classification System, excluding three sample companies not covered by any sectors. Meanwhile, in Graph 4 displayed in the main text, the sample companies are grouped into 12 industries pursuant to the Hang Seng Industry Classification System.
Graph 6:

Sample companies’ rate of applying the GRI Standards and rate of assurance by sectors under GRI’s Sector Classification System (excluding 3 sample companies classified into sub-group ‘Other’), with corporate behavior as asserted by Fernandez-Feijoo et al. (2014). Remarks: In this graph, the sample companies are classified into 24 sectors according to GRI’s Sector Classification System, excluding three sample companies not covered by any sectors. Meanwhile, in Graph 4 displayed in the main text, the sample companies are grouped into 12 industries pursuant to the Hang Seng Industry Classification System.

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Received: 2022-10-29
Accepted: 2023-07-24
Published Online: 2023-08-14

© 2023 CONVIVIUM, association loi de 1901

https://doi.org/10.1515/ael-2022-0082
Keywords for this article
corporate social responsibility (‘CSR’) reporting; environmental, social, and governance (‘ESG’) reporting; Global Reporting Initiative (‘GRI’); listed companies; sustainability reporting; The Stock Exchange of Hong Kong
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