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Project Database
Project Reference: ITP/021/20LP
Project Title: nD Blockchain for ESG Reporting
Hosting Institution: The University of Hong Kong (HKU)
Abstract: The introduction of the Environmental, Social and Governance Reporting Guide (Guide) by HKEx in 2013, and the subsequent upgrade of the Guide’s reporting obligation to “comply or explain” in 2016, have significantly moved the dial for Hong Kong issuers’ESG reporting.
In addition, it is widely recognized that ESG risks present financial,operational and compliance risks to companies. Investors are increasingly willing to allocate capital in sustainable investments which take into account climate change concerns and ESG reporting of issuers, and are thus demanding for more information on
how issuers manage their ESG risk. However, current ESG reporting is confronted with many bottlenecks:
(1) the ESG data are not collected in a sophisticated manner;
(2) theESG data delivered to ESG reporting agencies may be manipulated;
(3) the reporting process is not transparent to investors, NGOs and industry associations. This project
proposes to innovate a suite of core technologies to form the foundation for developing a total solution to upgrade the ESG reporting industry. In addition to our previous R&D achievements in IoT technologies, this project will focus on several key innovations:
(1) a fact-telling blockchain gateway is developed to evaluate fact level of ESG data and to transfer data into the consortium blockchain;
(2) a n-Dimension (nD) consortium blockchain is built for ESG data sharing among different ESG report stakeholders;
(3) the versioning smart contract mechanism is proposed to assess the consistency and transparency levels of ESG report in line with annual HKEx ESG reporting KPIs;
(4) the token-based incentive mechanism is established to construct the fact index of ESG
report;
(5) a package of consortium blockchain-based analytics services to facilitate decision-making of ESG report stakeholders. This project is expected to contribute significantly to upgrade the ESG reporting service.
Project Coordinator: Prof George Huang
Approved Funding Amount: HK$5.28M
Project Period: 04 Jan 2021 - 03 Jan 2023
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