<h4 style="text-align: justify;">Original article (only available in Chinses):  <a href="https://finance.mingpao.com/fin/specialpage1675936435843/20230314/1678703213637/%e5%a6%82%e4%bd%95%e5%88%a9%e7%94%a8%e5%a4%a7%e6%95%b8%e6%93%9a%e5%8f%8a%e4%ba%ba%e5%b7%a5%e6%99%ba%e8%83%bd%e7%ad%89%e5%b7%a5%e5%85%b7%e5%8d%94%e5%8a%a9%e8%a9%95%e4%bc%b0%e4%bc%81%e6%a5%adesg%e8%a1%a8%e7%8f%be" target="_blank" rel="noopener">如何利用大數據及人工智能等工具協助評估企業ESG表現 | 明報</a></h4>
 
In light of the heightened focus on environmental, social, and governance (ESG) performance in the corporate landscape, poor performance and negative news will have a significant impact on corporate development. Therefore, assessing the development potential of a company should not rely solely on financial metrics but should also consider ESG performance. Over the past ten years, factors such as climate change and sustainability risks have increasingly emerged as key factors for investors in their asset allocation decisions. The market believes that strong ESG performance can facilitate consistent profit growth, sustain competitive advantage, and enable long-term sustainable development. Moreover, it allows organizations to proactively identify and manage risks through forward-looking strategies, mitigating investment losses attributable to inadequate ESG performance or negative news. As a practical tool for investors, ESG ratings offer a convenient and accessible means to gauge a target company's ESG performance. By referring to these ratings, investors can rapidly and directly comprehend a firm's ESG maturity and discern its significant risk exposures.
 
ESG ratings are crucial in evaluating a company's sustainability performance, but their effectiveness is compromised by several data quality and methodology issues. The effectiveness of ESG ratings is hampered by limitations in data sources and the lack of standardized evaluation methods, leading to varying institutional judgments and interpretations that can cause fundamental problems. Firstly, current ESG ratings suffer from a lack of unified standards, with different rating agencies like MSCI ESG, DJSI, Hang Seng Sustainable Development Enterprise Index, and Sustainalytics establishing their research and analysis frameworks. This results in inconsistencies in rating indicators and increases sustainable investment risks. Additionally, most ratings consider the performance of the three ESG pillars and use their average value or predetermined weight to aggregate them into an overall score. This approach may offset positive and negative impacts, dilute rating information, and failing to analyze a company's performance in different aspects. In some cases, strong social and governance performance may overshadow severe environmental risks, providing little assistance to investors seeking to mitigate potential ESG risks. Furthermore, The effectiveness of ESG ratings hinges on the reliability of external information collected. Nevertheless, internal corporate information such as ESG reports and company documents may contain misleading claims, resulting in biased rating results.
 
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<h3 style="text-align: justify;"> </h3>
<h2 style="text-align: justify;">Potential and Practical Applications of Artificial Intelligence (AI) and Big Data</h2>
Big data and AI technology can effectively address the challenges posed by ESG ratings. Investors can use AI to mine and filter ESG information from multiple data sources (such as news, social media, government reports, NGO analysis reports, etc.) and previous records according to their investment strategies and areas of interest. Natural language processing technology can be used to analyze unstructured data and comprehensively evaluate a company's ESG performance while filtering out greenwashing noise. Massive data collection significantly improves benchmark analysis credibility, allowing investors to gain insight into the target company's ESG performance relative to industry peers, especially during major ESG events. This enables timely and accurate assessments through quick data collection and analysis.
 
ESG data provider Arabesque AI uses AI engines and ESG data analysis methods to help asset managers automate the integration of multiple financial and non-financial dimensions and preferences, generating highly customized active investment strategies and thematic investment portfolios, including mitigating ESG risks, seizing transition opportunities, and aligning with the United Nations Sustainable Development Goals. On the other hand, the screening process for the first "Top 100 Carbon Neutral Hong Kong Listed Companies" by the Greater Bay Area Carbon Neutrality Symposium (“大灣區碳中和論壇”) leveraged the AI ESG report analysis engine technology developed by the Hong Kong Applied Science and Technology Research Institute(“香港應用科技研究院”). With this technology, data from over 2,000 listed companies' ESG reports was processed in under two hours, during which the engine automatically extracted and analyzed key information, enhancing efficiency while also reducing manual costs. In the future, the application of big data and AI technology will bring infinite opportunities for sustainable investment, helping investors comprehensively understand the target company's performance in ESG aspects, reducing investment and greenwashing risks.
 
<a href="../../../../../uploads/20230314_AI_ESG_01fbb02f87.pdf" target="_blank" rel="noopener"><img src="../../../../../uploads/20230314_AI_ESG_copy_e1e6730c5b.jpg" alt="" width="1100" height="435" /></a>

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AVISTA [Ming Pao Column] Series: Leveraging Big Data & Artificial Intelligence in ESG Performance Evaluation

ESG has gradually risen to the top of the agenda for the Chinese cross-border e-commerce industry in recent years, with the sustainability concerns of overseas consumers intensifying. Coupled with a booming e-commerce market for apparel and accessories, home and garden accessories, as well as healthcare and beauty, cross-border e-commerce merchants must now face the challenge of building more sustainable brands to meet ever-evolving customer expectations.
 
<h3 style="text-align: justify;">How can brands seize the ESG opportunity to drive long-term value, while differentiating themselves from industry competitors?</h3>
 
<a style="color: #2142ff;" href="../../../../../uploads/Meta_ESG_EN_20230303_c801c96680.pdf" target="_blank" rel="noopener">Click here to learn more about AVISTA’s ESG integration strategy for e-commerce brands </a>
 
<a href="../../../../../uploads/Meta_ESG_EN_20230303_c801c96680.pdf" target="_blank" rel="noopener"><img src="../../../../../uploads/EN_7c66d1cc4f.png" alt="" width="600" height="849" /></a>

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Shaping a Sustainable Brand: ESG Integration and Value Creation for Cross-border E-commerce Business

The initial public offering (“IPO”) journey has never been straightforward. In addition to business-related financial metrics, evolving stakeholder expectations and heightening regulatory demands for resilient growth supported by well-articulated Environmental, Social and Governance (“ESG”) strategy and performance have indicated that ESG and climate-related corporate mandates growingly tip the scales when it comes to a company’s successful IPO and overall performance.
 
Against the backdrop that regulatory authorities and capital markets around the world are demanding transparent ESG disclosures from companies looking to go public, while IPO-ready companies align themselves with enhanced regulatory frameworks, some of them even make ESG practices front and center in their IPO roadshow phase to gain access to the pool of capital from international ESG-focused investors.
 
Click <a href="../../../../../uploads/EN_IPO_Journey_the_Importance_of_ESG_in_IPO_Process_20221107_VP_ET_SL_ET_SL_SJC_b180b1b534.pdf" target="_blank" rel="noopener">here</a> to learn more about the latest ESG disclosure requirements and ESG essential for IPO applicants.
 
<a href="../../../../../uploads/EN_IPO_Journey_the_Importance_of_ESG_in_IPO_Process_20221107_VP_ET_SL_ET_SL_SJC_b180b1b534.pdf" target="_blank" rel="noopener"><img src="../../../../../uploads/Cover_EN_5f415ec3d4.png" alt="" width="500" height="707" /></a>

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IPO Journey:  The Importance of ESG in IPO Process

The Stock Exchange of Hong Kong Ltd. (“HKEx” or the “Exchange”) published a consultation paper on 19 October 2022, seeking public feedback on proposals to expand Hong Kong’s existing listing regime to permit listings of Specialist Technology Companies. The consultation period will end on 18 December 2022.
 
The consultation paper proposes that Specialist Technology Companies listing applicants are required to have substantial investment from Sophisticated Independent Investors, and to disclose the pre-IPO financing details in their listing applications.
 
Click <a href="../../../../../uploads/article_EN_compressed_bf4f93c5c0.pdf" target="_blank" rel="noopener">here</a> to learn more about HKEx published Consultation Paper for Specialist Technology Companies Listing.
 
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HKEx published Consultation Paper for Specialist Technology Companies Listing

After the fifth wave of COVID-19 outbreak, rapid U.S. interest rate hike in Q2 2022, most real estate investors adopted a wait-and -see approach while some exploited the current uncertainties and enjoy the first mover advantage. In the meantime, Hong Kong government set an example for all stakeholders in Kowloon East to show further support for its long-awaited CBD2 vision as well as realizing its potential to the fullest. In this publication, AVISTA Property Valuation team forecasted the Hong Kong prime office rental and price in late 2022, and analyzed recent office leasing transaction in Kowloon East.
 
Click <a href="../../../../../uploads/AVISTA_HK_Office_Market_Insights_Q2_2022_EN_Master_0926_84905223ed.pdf" target="_blank" rel="noopener">here</a> to read the full insights.
 
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Sail Safely Through the Uncharted Water—AVISTA HK Office Market Insights (Sep 2022)

In March 2022, the SEC proposed new climate disclosure rules to strengthen and standardize public companies’ climate disclosures, with the aim of providing consistent, comparable, and useful information for investors to utilize in their decision-making processes. Public comments on the SEC proposal have been received. If adopted, the proposed changes would require registrants to disclose extensive climate-related information within their annual reports and registration statements, including greenhouse gas (GHG) emissions, as well as the impacts and governance of climate-related risks. Click <a href="../../../../../uploads/SEC_s_Proposed_Climate_Disclosure_Rules_Impacts_on_Registrants_20220726_EN_fbd37e1950.pdf">here</a> to learn more about the SEC’s Proposed Climate disclosure requirements. 
 
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SEC’s Proposed Climate Disclosure Rules —— Impacts on Registrants

Fifth wave of COVID-19 outbreak, geo-political tension between Russia and Ukraine as well as the commencement of U.S. interest rate hike placed tremendous pressure on Hong Kong’s office market, yet It is the worst and best time for investors to plan ahead for their next acquisition. Amid the uncertain times, the new arrangements for charging land premium greatly reduce the time and cost needed for lease modification application and release the largest potential of rural land in the Northern Metropolis Area. In this publication, AVISTA Property Valuation team forecasted the office sales market to reach a short-term bottom in Q2 2022 despite shrinking rental, factoring in the uncertainty presented by the pandemic. Click <a href="../../../../../uploads/AVISTA_HK_Office_Market_Insights_Q1_2022_EN_51534a8c68.pdf" target="_blank" rel="noopener">here</a> to read the full insights. <img src="../../../../../uploads/AVISTA_HK_Office_Market_Insights_Q1_2022_EN_16d60dc631.png" alt="" width="300" height="3508" />

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