HKICPA recognizes 35 listed companies and public organizations at Best CG & ESG Awards and publishes guidance on data governance in the AI Era

The Hong Kong Institute of Certified Public Accountants (HKICPA) announced the result of the Best Corporate Governance and ESG Awards 2026 today. As Hong Kong continues to make encouraging progress in ESG and expectations for corporate governance continue to rise, the judges are pleased to present 35 awards in all this year, including eight first-time awardees, one of which is a newly-listed company. The awardees comprise 12 Elite award winners, 20 other listed companies, including one newly listed company, and three public sector organizations. Meanwhile, in view of the growing adoption of artificial intelligence (AI), the HKICPA conducted research that reviewed the annual reports of 124 constituent companies of the Hang Seng Composite LargeCap Index and analyzed their disclosures relating to AI and the associated governance arrangements. The HKICPA report also included practical guidance on AI data management, with the aim of enhancing AI governance in the market.

Stephen Law, President of the HKICPA and Chair of the Judging Panel of the Best Corporate Governance and ESG Awards 2026, said, "Corporate governance (CG) and sustainability are crucial cornerstones of the long-term competitiveness of Hong Kong's capital market, and of corporate resilience. The Institute’s Awards were among the first in Hong Kong to focus on corporate governance practices and, subsequently, sustainability and ESG. First launched in 2000, they have firmly established themselves as one of the most prestigious and sought-after accolades. The Awards not only recognize institutions excelling in CG and ESG, but also reflect market trends, driving companies to continuously improve their standards in these areas. As the market further develops, and Hong Kong remains a leading venue for new listings internationally, corporate CG and ESG need to keep pace. The results of this year's competition bring out a very important message: Best practices do not equate to publishing the thickest reports or disclosing the most information, but, rather, truly integrating good corporate governance, ESG, risk management into a company’s culture, strategies and daily business and decision-making processes.”

“A new development this year was the increased use of artificial intelligence (AI) in the Awards’ review process. AI was used to conduct the preliminary screening of around 2,400 annual reports and a similar number of ESG reports, for the first time covering all companies listed on the Main Board of the Hong Kong Stock Exchange, as at 31 December 2025. In the second stage, we applied AI to assess organizations’ CG and ESG performance against our established marking criteria. Reviewers from professional firms conducted a subsequent round of reviews, calling upon their professional judgement, before the Review Panel determined the shortlist for final judging. This year’s review process combined technology with the experience and judgement of professionals,” Stephen Law added.

Corporate Governance

Overall, this year’s review indicates that listed companies have continued to strengthen CG reporting incrementally. However, against the background of changes made to the Corporate Governance Code under the Listing Rules (CG Code), to strengthen board independence and diversity, which include the implementation of a maximum tenure of nine years for independent non-executive directors (INEDs) on the board, and limiting INEDs to sitting on no more than six listed company boards, many companies still have more work to do.

Alec Tong, Chair of the Awards’ Organizing Committee, said, “CG requirements and best practices do not stand still, nor do investor expectations. The revisions to the CG Code will provide added impetus for companies to review their practices and reporting more broadly, and to provide more decision-useful information for investors and stakeholders. Some of the key changes on board independence have been introduced with a transition period, so companies must prepare themselves and ensure they have clear and effective policies on board refreshment.”

The Judging Panel for the 2026 Awards made a number of general observations and pointed to areas where CG practices could still be enhanced:

Enhancement on disclosure of the effectiveness of RM&IC systems

Companies should go beyond basic disclosures of board structures and procedures by providing more details on, for example, reviews of the effectiveness of risk management and internal controls (RM&IC) and the related follow-up actions, thereby enhancing investor and stakeholder confidence. In this regard, the HKICPA was pleased to note that, responding to the call for better RM&IC disclosures, which the Awards judges have been highlighting for some time, more extensive mandatory disclosure requirements have now been added into the CG Code. Companies should also further implement effective board diversity measures across multiple dimensions, including gender and age, and strengthen their related reporting. Greater diversity of thought on boards can significantly improve decision-making.

Enhancement on transparency

Opportunities for improvement in companies’ disclosures include capital structure, as well as board effectiveness and evaluations, including the methodology, scope and findings of board performance reviews. Also, companies are encouraged to provide more specific disclosures that demonstrate how governance frameworks contribute to long-term value and resilience. Greater transparency in relation to various areas of the operation on public sector organizations (PSOs) boards, including the nomination process for selecting government appointees, and how they fulfil their role on the board, would be desirable. In addition, clearer explanations should be provided for significant variations in financial performance from year to year.

Enhancement on the disclosure of cybersecurity

Areas for enhancement of reporting on cybersecurity include clearer identification of board accountability, key controls, incident-response arrangements, third-party risks, training, and the scope and outcome of assurance work performed during the year. In addition, companies should start to provide investors with more information about their use of AI and the related policies and safeguards, covering issues like data governance, which is a fundamental element of good AI governance.

ESG

The Judging Panel observed a number of good practices among the awardees, including management’s commitment to establishing clear, top-down ESG stewardship responsibilities, integrating ESG considerations into major operational and decision-making processes, and setting net-zero or carbon-neutrality goals, supported by clear interim and emissions-reduction milestone. Best practices among the awardees also included transparent, high-quality reporting and obtaining independent assurance on key data.

Patrick Rozario, Chair of the Awards’ Review Panel, stated, “As investors’ expectations and demands regarding corporate sustainability practices and reporting continue to grow, greater transparency in ESG reporting has become an important and inevitable trend in international capital markets. Through close collaboration among capital markets, the government and stakeholders, and the HKICPA’s work in developing local standards, Hong Kong has established itself as among the global leaders in sustainability disclosures. Hong Kong’s and the HKICPA’s commitment in promoting the highest standards and supporting capacity building is reflected in the HKICPA’s appointment by the IFRS Foundation in June of this year as an official International Sustainability Standards Board (ISSB) Training Partner. Against this background, we encourage companies to continue enhancing the quality of their ESG reporting and to serve as benchmarks for the Hong Kong and international markets.”

For ESG also, the Judging Panel pointed to areas where practices could still be enhanced, as indicated below.

Enhancement of the “S” in “ESG”

While giving due attention to the environmental and climate-related aspects, companies should not overlook the “S” in “ESG” and should consider how to strengthen the social aspects, including implementing commitments and targets, where appropriate, for occupational safety and health, workplace diversity, staff turnover, data protection, and other areas relevant to individual companies and their stakeholders. Also explanations should be given for significant year-to-year variances in social-related data. 

Enhancement on Scope 3 emissions disclosure

The judges appreciate that Scope 3 emissions disclosure is more challenging than Scopes 1 and 2 and is still a work in progress. Nevertheless, disclosures could be more detailed, including information on how companies engage with their supply chains to obtain relevant data and any difficulties they may face in doing so. Currently, relatively few companies provide information on all 15 categories of Scope 3 emissions or explain their rationale for excluding specific categories. In addition, some companies still do not disclose clear interim targets, which affects stakeholders’ ability assess whether their carbon reduction progress is on track.

Enhancement on ESG assurance

In addition to reporting against the ESG Reporting Code under the Listing Rules, companies should be looking at fully adopting international or Hong Kong sustainability disclosure standards. They should also consider obtaining assurance on key metrics from a qualified ESG assurer, such as an experienced CPA firm. This will help to support their own efforts to improve the rigour and integrity of their reporting and to give investors and stakeholders greater trust and confidence in the accuracy and reliability of such data. The quality of ESG assurance will itself be enhanced with the implementation of ISSA 5000, the new international standard on sustainability assurance, published by the International Auditing and Assurance Standards Board (IAASB) and the HKICPA’s HKSSA 5000, which is fully aligned with the IAASB standard.   This new standard applies to reporting periods beginning from December 15, 2026.

AI Adoption and Governance

Over the past few years, in parallel with the Awards, the HKICPA has been publishing a series of CG and ESG-related short studies to shed more light on some important issues in CG and ESG, such as ESG assurance, board diversity and cybersecurity. As the use of AI becomes increasingly prevalent in business operations across all industries, this year the HKICPA has published AI and Data Governance: Market Observations and Practical Guidance, a study that examines how companies currently apply and govern AI, and offering guidance on improving data management, which is at the heart of good AI governance.

The study reviewed the FY2025 annual reports of 124 constituent companies of the Hang Seng Composite LargeCap Index and analyzed their disclosures on AI adoption and related governance arrangements. These included whether they disclosed actual AI applications, board-level oversight, formal AI risk assessments, responsible AI-use policies and dedicated operational controls.

Among the 124 selected companies, 92 companies stated explicitly that they have used AI, while 26 companies did not identify such use. Other provided partial information. As regards the areas of AI application, the most prevalent use was in operations and industrial optimization (44 companies), followed by productivity & enterprise automation (37 companies), product & service development (35 companies) and customer services & engagement (also 35 companies).

The study found that companies are continuing to expand their use of AI, increasing their reliance on the data used to develop, operate and support AI systems, as well as on the outputs they generate. However, companies’ disclosures tend to focus only on their use of AI rather than the related governance framework and processes, which makes it difficult for investors to understand key concerns such as data governance, accountability and the trust issues associated with corporate AI adoption.

Organizations need to ensure not only that AI-generated outputs are reliable, but also that the supporting data, tools, controls and review processes are robust. To help companies and the market identify and understand some of the key considerations, the HKICPA proposes a five-step Traffic-Light Decision Framework for data use in AI/GenAI, based on practicality and risk classification, to support organizations in adopting AI responsibly.

Stephen Law concluded, “The long-term value of AI lies not only in improving efficiency, but also in whether businesses can create value by avoiding pitfalls and deploying it safely and responsibly through effective governance. Businesses must treat AI governance as an integral part of good corporate governance and manage the associated risks through sound data governance, effective controls and clear human oversight. Through its practical guidance and tools, the HKICPA aims to support businesses in establishing robust AI and data governance frameworks, and foster a more sustainable AI ecosystem in Hong Kong.”

The HKICPA was pleased to receive financial sponsorship for this year’s Awards from prominent CPA and other professional firms (see Note 1) and to receive AI technical and other support (see Note 2). The HKICPA would like to express its appreciation for all this support and that of the Awards’ media sponsors (see Note 3).

For the full judges report of the HKICPA Best Corporate Governance and ESG Awards 2026 and the full report of AI and Data Governance: Market Observations and Practical Guidance, please scan the relevant QR code below:

Judges Report

AI and Data Governance: Market Observations and Practical Guidance

Note 1: list of financial sponsors (in alphabetical order)

1.     Ace Sustainability & Risk Advisors Ltd

2.     AVISTA Group

3.     BDO Limited

4.     Deloitte Touche Tohmatsu

5.     Ernst & Young

6.     Forvis Mazars Risk Advisory Services Ltd

7.     Grant Thornton Hong Kong Ltd

8.     HLB Hodgson Impey Cheng Ltd

9.     KPMG

10.  Moore CPA Ltd

11.  PwC

12.  RSM Hong Kong

13.  Tanner De Witt

Note 2: AI services and other sponsors

Wizpresso

Riskory Consultancy Limited

Note 3: list of media sponsors (in alphabetical order)

1.     ET Net

2.     Hong Kong Economic Times

^{The Hong Kong Institute of Certified Public Accountants announced the result of the Best Corporate Governance and ESG Awards 2026 today. (From left to right: Stephen Law, President of the HKICPA and Chair of the Judging Panel of the Best Corporate Governance and ESG Awards 2026, Alec Tong, Chair of the Awards’ Organizing Committee.)}