Assessing corporate environmental risk in China: An evaluation of reporting activities of Hong Kong listed enterprises

Abstract

Due to its large population, rapid economic growth and the fragility of its environment, China is environmentally more risky than Western countries. Over time we will see tougher and better-implemented environmental regulations in China. At the same time, sound environmental management is being viewed by investors as an essential part of good corporate governance. Hong Kong listed companies have failed to provide sufficient information for investors to assess their positions with respect to environmental management. This increases their vulnerability to possible accusations of poor environmental performance. The lack of environmental activity and accountability identified amongst the companies leads us to conclude that they are taking substantial yet avoidable risks. In the short term, Hong Kong security market regulators should expedite better voluntary environmental reporting. In the long term, a fundamental reform of security regulations in partnership between regulators, professionals and listed companies should be pursued. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment.