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03 Jul 2023

New White Paper finds lack of clarity of ESG a main issue for businesses and investors in quest for a more sustainable future in Asia


A new White Paper to identify the needs of businesses and investors in their sustainability goals and how the legal sector can support them has revealed that confusion over the definitions of Environmental, Social and Corporate Governance (ESG) and sustainability was a major stumbling block for decision-making.

The study is a cross-discipline collaboration between law firm Stephenson Harwood's Hong Kong office and PIE Strategy, a certified B Corporation® that has made the Best For The World list for multiple years. As the independent researcher, PIE conducted in-depth interviews with 26 decision-makers, ranging from asset managers, financiers and impact investors to business executives and in-house general counsel, to identify their needs and understand the challenges and opportunities they face.

All of the interviewees agreed that a low-carbon transition was inevitable but was unclear on how to achieve the transition, how fast to go, how much to invest and how to do it profitably. Widespread misconceptions over the definitions of ESG and sustainability was a major factor in the confusion, affecting investment decisions and hampering the pace of transition.

This divide was clearer between traditional investors and those with a clear interest in assimilating impact influences into their investments. While sustainability could be a mandate perceived as explicit, the implicitness of ESG left asset managers unsure if they should incorporate it into their portfolios.

“Clarifying these definitions could be a substantial first step in clearing up misunderstandings. This is where the legal profession could help clients understand the potential meanings of terms of regulations and documents, to better gauge their risk exposure and ensure their commitment to achieving this transition,” says Evangeline Quek, managing partner, Greater China of Stephenson Harwood.

Insufficient and inconsistent quality of ESG disclosures by listed companies makes it more difficult for investors to accurately assess risk exposure and growth potential, discouraging investment decisions. This was not helped by government regulations, particularly in Hong Kong, which neither set out a clear and coherent climate transition blueprint nor deterrent measures for non-compliance.

Interviewees also agreed that legal advisors could play a more significant role in helping companies prepare not just for present regulations but provide foresight in anticipating a tougher regulatory environment and navigating the subsequent implications.

At present, commitments to emissions reduction targets are seen as goodwill gestures which lack accountability. The legal profession has the unique opportunity to help businesses establish fair and binding relationships to translate goodwill efforts into tangible and accountable actions.

“This White Paper provides an Asian perspective to complement the international dialogue on ESG and climate transition. The research was conducted through in-depth interviews with industry experts and decision-makers to understand the practicability for driving change. It is significant to note that businesses and decision makers know ‘why’, with this Paper we hope to help them resolve ‘how’,” says Natalie Chan, Principal Sustainability Consultant of PIE Strategy.

As a case study, PIE leveraged the network of Stephenson Harwood and focused on the shipping industry due to fast-changing fuel choices and the far-reaching implications of the shipping industry’s impact on logistics and supply chains. By delving into an ecosystem perspective to understand the dynamics and explore opportunities to drive system change, the Paper highlighted the importance of common and differentiated responsibility within the industry ecosystem to facilitate change.

To read the full white paper 'From Uncertainties to Opportunities: How lawyers can support Asia’s transition to a low-carbon economy', click here.



Rose Charteris

Senior communications & PR executive

T: +44 20 7809 2961 
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Allan Williams

Senior communications manager

T: +44 20 7809 2479
Email Allan