According to a report from the accounting firm Grant Thornton (Hong Kong), the 14th "Hong Kong Corporate Governance Survey" reveals that large listed companies in Hong Kong have improved their ESG reporting levels, particularly in climate-related disclosures and the green finance sector. However, a considerable number of companies are still unprepared. In terms of technological enhancement, over half (58%) of the large Hang Seng Composite Index component companies reported that they have deployed or plan to deploy AI technology to improve the accuracy of ESG data collection and reporting. To better align with international standards, the Hong Kong Stock Exchange (HKEX, 00388) has updated its ESG disclosure guidelines, mandating companies to fully disclose their governance, strategies, risk management, indicators, and targets related to climate issues. According to the scoring mechanism set by the report for early adoption of new regulations, as many as 41% of large Hang Seng Composite Index component companies are inadequately prepared, a situation that warrants attention. The disclosure of these companies is vague and lacks sufficient information, particularly in the areas of risk management and climate targets, which may lead to compliance errors and reputational damage. Only 10% of companies are adequately prepared to provide comprehensive disclosures with precise quantifiable data, adhere to recognized frameworks, and engage third-party verification. Notably, the real estate and construction industry (50%) and the utility sector (30%) have demonstrated superior preparedness in climate disclosures, primarily due to their significant environmental impacts. In 2024, 95% of large Hang Seng Composite Index component companies disclosed climate-related risks, an increase of 6% from 2023. Additionally, 68% of companies secured independent validation of their ESG reports, representing an 8% year-on-year growth. Nevertheless, only 11% of companies disclosed the quantitative financial impacts of climate change, and merely 4% showcased detailed and comprehensive risk management processes. Furthermore, 70% of companies reported their Scope 3 greenhouse gas emissions. Grant Thornton (Hong Kong) consulting partner, Xia Qicai, stated: "Companies remain hesitant about quantifying the financial impacts of climate change, fearing that this may expose competitive disadvantages or deter investors. However, the market increasingly relies on climate disclosures to assess risks, and a lack of transparency can undermine investor trust. With the approach of the 2026 disclosure regulation effective date, we urge companies that are not yet fully prepared to take immediate action to enhance the quality of their Scope 3 greenhouse gas emissions disclosure and the quantification of financial impacts. Beyond compliance requirements, proactively adopting measures to adapt to climate change can also enhance companies' resilience and boost market confidence. Although the Hong Kong Stock Exchange has made progress in disclosure standards, effectively encouraging companies to go beyond superficial disclosures still relies on clearer guidance and improved enforcement mechanisms." Grant Thornton (Hong Kong) analyzed the 2024 annual reports and ESG reports of 105 large Hang Seng Composite Index component companies to evaluate their disclosure levels on climate-related disclosures, verification, green finance, and technological innovation. The survey report highlights that in 2024, 10 large Hang Seng Composite Index component companies disclosed that their green financing scale exceeded HKD 50 billion, a 20% increase from the previous year, underscoring the rapid maturation of Hong Kong's sustainable finance sector. This growth trend also reflects Hong Kong's gradual emergence as a leading green finance center in Asia, driven by supportive policies and increasingly stringent ESG disclosure requirements. Looking ahead to the next 3-5 years, Grant Thornton (Hong Kong) consulting associate director, Yan Xinqi, believes that the development of Hong Kong in the green finance sector will further consolidate. Overall, 39% of large Hang Seng Composite Index component companies mentioned green financial instruments in their ESG reports, a 3% year-on-year increase. Among the 41 companies referencing green bonds or ESG financing, 36 (88%) have indeed issued relevant instruments. Disclosure levels have also improved, with 86% of issuing companies disclosing their green financing scales, indicating a growing sense of market responsibility. Significant differences exist across industries: conglomerates (100%), financial industry (95%), and real estate and construction sector (69%) continue to lead in green finance disclosures. The energy (+50%) and telecommunications (+33%) sectors demonstrate the strongest growth in discussing green finance, reflecting an increasing interest in financing sustainable transitions across various industries. All companies in the financial, materials, real estate and construction, telecommunications, and utility sectors have issued green bonds, displaying significant growth compared to 2023. This shift may stem from these sectors' capital-intensive characteristics and the additional opportunities presented by green projects. In contrast, companies in essential consumer goods, energy, healthcare, industrial sectors, and information technology have not issued green bonds, consistent with last year's findings. The overall scale of green finance has significantly expanded. In 2023, more than half of the green finance issuance was at or below HKD 10 billion. However, in 2024, 78% of the issuance exceeded HKD 10 billion, showcasing a continued upward market momentum and reflecting the growing strategic importance of sustainable capital allocation in high carbon emitting, capital-intensive industries. Yan Xinqi remarked that given the intensifying global carbon reduction pressure, Hong Kong holds a leading advantage in the green finance sector. However, to maintain this leadership position, collaboration between regulatory bodies and the industry is essential to bridge disclosure gaps and effectively manage technological risks, thereby bolstering market trust while promoting long-term growth. As major global markets such as Singapore and the EU actively advance green finance policies, including Singapore's introduction of the "Green Development Blueprint 2030" and the EU passing the "European Green Bond Standard," it is evident that the Hong Kong government and enterprises are also aligned in their efforts, demonstrating a commitment to solidifying Hong Kong's role as a global sustainable finance hub and to building resilience in both the environment and the economy. Over half (58%) of large Hang Seng Composite Index component companies reported that they have deployed or plan to deploy AI technology to enhance the accuracy of ESG data collection and reporting. Additionally, 92% of companies emphasized cybersecurity issues in their ESG reports, a significant 10% increase from 2023. The Hong Kong "Protection of Critical Infrastructure (Computer Systems) Ordinance" will come into effect in January 2026, placing greater legal and operational pressures on operators in key industries such as energy, finance, healthcare, communications, and transportation, necessitating the strengthening of cybersecurity resilience. The rise of automation has sparked social concerns over data privacy, greenwashing practices, and compliance issues, yet the current regulatory framework remains inadequate. Only 69% of companies disclosed AI-related training or IT skill enhancement plans. Notably, no company mentioned the international standard for AI management systems, ISO 42001, highlighting significant gaps in aligning AI applications with emerging global standards. Furthermore, the survey found that in 2024, 34% of large Hang Seng Composite Index component companies linked their compensation policies to ESG key performance indicators (KPIs), but only 10% disclosed specific execution mechanisms. Xia Qicai concluded that cybersecurity and AI governance are no longer optional but essential measures to maintain stakeholder trust and comply with increasingly stringent regulatory requirements. With mandatory disclosures under the new climate regulations on the horizon, Hong Kong listed companies must accelerate their transition in ESG matters. Companies should shift their focus from the "quantity" of reports to the "quality," including investing in robust data systems, incorporating independent validation, and aligning with international standards. This is not only a compliance necessity but also crucial for companies to secure future investments and enhance competitiveness in an environment that increasingly prioritizes sustainability and digital resilience.