Stephenson Harwood's Hong Kong office recently published its inaugural ESG white paper — 'From uncertainties to opportunities: How lawyers can support Asia’s transition to a low-carbon economy'. The authoritative report explores opportunities and challenges of Asia's transition to a low-carbon economy, based on perspectives culled from interviews with 26 decision-makers in the finance, business, and legal sectors.
While the need for sustainable development was universally recognised by the decision-makers, views differed on the speed of transition and how it should conform with financial returns. Interviewees also expressed confusion over definitions of ESG and sustainability. Clarifying these concepts and assuaging related concerns, the white paper said, could help bridge the gap between financial and sustainability objectives.
Other views noted the lack of enforcement and poor quality of disclosure in jurisdictions like Hong Kong, which respondents said lead to market uncertainty while hindering investment decisions. A set of emerging global standards may help, they added, if compliance was properly mandated and supported.
Turning its eye on the shipping industry, the report noted, among other things, that the sector faced fuel choice uncertainties that complicate investments. For instance, while market leaders explore viable but expensive solutions like methanol and LNG, such options may not be entirely available to smaller players. The consensus: Collaboration is crucial given shared goals and interdependencies, and technological innovation presents profitable opportunities if risks are collectively understood.
Generally, respondents agreed that achieving Scope 3 greenhouse gas (GHG) emissions accountability — under international frameworks like the global Task Force on Climate-Related Financial Disclosures (TCFD) or International Sustainability Standards Board (ISSB) — requires translating commitments into binding agreements. Legal services, they said, could help craft unbiased solutions that uphold reductions across complex supply chains, with updated regulations providing a clear transition blueprint that incentivises early action.
It was also the consensus that whether they are viewed as risks or opportunities, ESG factors implicitly inform all investment assessments. To this end, lawyers should anticipate regulation, build ESG literacy, and craft actionable bespoke ESG-aware advice based on specific client context. Doing so would catalyse much-needed systemic change and spur effective evolution toward integrating ESG into mainstream investment decisions, the report concluded.
To access the full report, please visit the Stephenson Harwood website.
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