Leung, Kelvin Yiu Fai (2024) A Study of the Relationships between Listed Companies' Environmental, Social and Governance (ESG) Reporting, Company Value and Investment Risk in Hong Kong. Doctoral thesis, University of Wales Trinity Saint David.
|
Text
Leung, Kelvin Yiu Fai (2024) DBA A Study of the Relationships between Listed Companies' Environmental thesis.pdf - Accepted Version Available under License CC-BY-NC-ND Creative Commons Attribution Non-commercial No Derivatives. Download (5MB) | Preview |
Abstract
Driven by Environmental, Social and Governance (ESG) issues across the globe over the years, ESG reporting continues to grow as a top priority for listed companies on the Main Board of the Stock Exchange of Hong Kong Limited (listed companies). Nowadays, listed companies in Hong Kong Special Administrative Region of the People’s Republic of China (Hong Kong) are expected to look beyond profit maximisation and demonstrate their accountability to various stakeholders including but not limited to shareholders, employees, creditors, suppliers, customers, community and government. In addition to changing business environment particularly during and post COVID-19 pandemic, ESG regulatory requirements have also been evolving and changing quickly. With effect from 1 July 2020, listed companies in Hong Kong are subject to the stringent disclosure requirements as stipulated in the ESG Reporting Guide under Appendix 27 to the Main Board Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited. In respect of ESG, the expectations of stakeholders are increasing together with more stringent ESG regulatory reporting requirements have been imposed for listed companies in Hong Kong from time to time. This primary focus of this study is to examine ESG reporting and its quality in terms of ESG performance and the relationships with the company value and investment risk of listed companies in Hong Kong. The research aims of this study are to investigate how the board effectiveness affects ESG reporting and the value of ESG reporting. The research objectives of this study are to investigate the effects of board attributes on ESG performance, the relationship between ESG performance and the company value as well as the relationship between ESG performance and the investment risk. Firstly, this study investigates the reasons for increasing the attention and efforts of the management in addressing ESG reporting in particular on a voluntary basis in addition to the legal regulatory requirements based on the mandatory basis and “comply or explain” basis together with the costs, benefits, contemporary challenges and issues in ESG reporting of listed companies in Hong Kong. Then, this study investigates how the board attributes affects ESG performance, the relationship between ESG performance and the company value as well as the relationship between ESG performance and the investment risk. The research is guided by three research questions and has used quantitative research methods in order to answer the research questions. The first research question addresses whether the board attributes affect ESG performance of listed companies in Hong Kong. This has been examined quantitatively using the fixed effects panel regression model. Based on the statistical results, there is evidence to infer that the separation of the roles of chairman and chief executive officer is statistically significant and positively related to the S&P Global ESG Score. This infers that a listed company with the board independence in terms of the separation of chairman and chief executive officer would have a better ESG performance. However, there is no evidence to infer that the board size or proportion of independent non-executive directors is statistically significant and related to the S&P Global ESG Score. The results do not support that the board size or proportion of independent non-executive directors affects ESG performance. The second research question addresses whether ESG performance affects the company value of listed companies in Hong Kong. This has been examined quantitatively using the fixed effects panel regression model. Based on the statistical results, there is no evidence to infer that the S&P Global ESG Score is statistically significant and related to the price-book value ratio. As such, the results suggest that ESG performance does not affect the company value. The third research question addresses whether ESG performance affects the investment risk of listed companies in Hong Kong. This has been examined quantitatively using the random effects panel regression model. Based on the statistical results, there is evidence to infer that the S&P Global ESG Score is statistically significant and negatively related to the annual share price volatility. As such, the results suggest that the ESG performance affects the investment risk negatively. This infers that a listed company with a better ESG performance would have a lower investment risk. Overall, this thesis enhances the existing body of knowledge and understanding of ESG reporting and its quality in terms of ESG performance and the relationships with the company value and investment risk. In particular, it fills the research gap in the study of ESG in the context of listed companies in Hong Kong. Such investigations are expected to provide constructive information for policy makers and regulatory bodies of Hong Kong to make improvements and changes to the existing ESG regulatory and reporting regime as well as practical insights for management of listed companies in Hong Kong.
| Item Type: | Thesis (Doctoral) |
|---|---|
| Subjects: | H Social Sciences > HF Commerce |
| Divisions: | Theses and Dissertations > Doctoral Theses |
| Depositing User: | Kelvin Yiu Fai Leung |
| Date Deposited: | 05 Jun 2024 14:06 |
| Last Modified: | 05 Jun 2024 14:06 |
| URI: | https://repository.uwtsd.ac.uk/id/eprint/2954 |
Administrator Actions (login required)
 |
Edit Item - Repository Staff Only |