Warren Buffett once said it takes twenty years to build a reputation and five minutes to ruin it. In Hong Kong's capital markets, that warning has never felt more relevant. New corporate governance requirements took effect on 1 July 2025, and HKFRS S1 and S2 brought Hong Kong into closer alignment with ISSB-based sustainability disclosure a month later. Governance and sustainability reporting are converging, and investors are reading them together, as one connected story rather than two separate documents.
The pressure this creates is real. PwC's 29th Global CEO Survey found that 38% of companies have faced growing questions about data use and privacy in the past 12 months, 38% have faced demands for greater transparency, 37% have faced concerns around AI safety, and 36% have seen increased scrutiny of leadership decisions. The commercial stakes are significant too: public companies with the fewest stakeholder trust concerns delivered a median 12-month total shareholder return of 16%, compared with 7% for those with the most concerns, a gap of nine percentage points.
To understand how Hong Kong's largest listed companies are responding, we analysed the reporting and investor communications of all 35 constituents of the Hang Seng Hong Kong 35 Index, reviewing more than 70 data points per company against the six Pillars of Trust: purposeful, value-focused and material, strategically aligned, stakeholder-driven, future-orientated, and balanced, transparent and credible. The consistent pattern across all six: companies are referencing the right commitments, but far fewer are backing them up with the clarity and detail that actually moves the dial for investors.
Boards are taking ownership of culture, but reporting still underplays how it is measured. 91% of boards say they oversee culture, yet only 46% include people or culture indicators in their annual reports, and just 26% explain how purpose, values and behaviour actually connect (60% do at least explain how strategy delivers on purpose). Employee voice is becoming part of the culture story but isn't yet standard practice, with only around half of companies evidencing culture through the voice of their own people.
Reporting inspiration: Taylor Wimpey's 2025 Annual Report explains how the board monitors alignment between culture, purpose, values and strategy, and brings that culture to life through both employee and board perspectives, including a named Employee Champion role and a National Employee Forum.
Nine in ten companies articulate a business model specific to their context, which is encouraging. But a third still don't recognise value creation beyond financials and shareholders, and only 4 of the 35 companies use a dedicated graphical business model spread, compared with 93% of the FTSE 100, despite 64% of investors saying they prefer exactly this kind of visual depiction. KPI disclosure is plentiful but not always well explained: 86% of reports feature more Alternative Performance Measures than IFRS-based KPIs, yet only 40% explain the rationale behind their KPI selection.
Companies are far more comfortable discussing opportunity than risk. 91% discuss how market conditions shape strategic performance, but only 9% describe how those same conditions drive principal risks. The same imbalance shows up with AI: 91% described outcomes from their AI initiatives, yet only 14% identified AI as a principal risk, only 54% describe AI-specific governance such as human review, testing and escalation, and just 12% have mapped board skills against strategic needs.
Reporting inspiration: HSBC's 2025 Annual Report makes the risk implications of market change clear, while Aviva translates external trends directly into strategic action. Pearson stands out for discussing AI opportunities and AI risk side by side, with named executive accountability for each AI-related risk.
This is where the gap with global peers is widest. Only 2 in 10 HSHK35 companies described how the board considered specific stakeholder interests in a decision, compared with about half of the FTSE 100. HKEX's own guidance says boards should actively engage with stakeholders and factor that feedback into decision-making, and the 2025 Corporate Governance Guide raises the bar further, encouraging companies to explain not just whether engagement happened, but where it was focused and how it shaped priorities. Capital allocation tells a related story: only 29% of companies articulate a clear capital allocation framework, and among the 31% that undertook an equity raise last year, just 16% explained the rationale and use of proceeds.
Reporting inspiration: Rathbones' 2023 Annual Report shows clearly how stakeholder views were involved in key decisions, while Bunzl's 2025 Annual Report sets out capital allocation as part of its investment case, with clear priorities and quantified track record.
Many strategies still signal direction without defining success. Only 43% of reports include specific, timebound and measurable targets as part of their corporate strategy, and just 31% explain how performance against medium-term goals informs future business priorities. Credibility is strongest where assumptions and strategy evolve together: 69% explained how climate scenario analysis informed strategic decisions, but only 43% reported a change in sustainability targets during the year, meaning many companies are quietly carrying targets that no longer reflect changed circumstances.
Reporting inspiration: Smiths Group's FY2024 Annual Report draws a clear line of sight from strategic priorities through to KPIs and targets, and then reports progress against each one transparently.
Balance is strong overall, but candour is uneven when ambition shifts. 8 in 10 companies openly addressed underperformance during the year, a genuinely strong result. Yet when it comes to explaining why climate or net-zero targets were revised, only 3 in 10 do so. Reporting is strongest where disclosure expectations are already well established: 80% include a clear dividend policy or framework. Assurance is following a similar trajectory, with 88% of companies now obtaining third-party ESG assurance, but only 12% moving to the higher bar of reasonable assurance.
Reporting inspiration: Alliance Witan's 2024 Annual Report shows both the Chair and the Investment Manager directly addressing underperformance, even in a year of positive absolute returns.
None of this requires reinventing reporting from scratch. It requires being more deliberate about connecting the dots that are, in many cases, already there.
This article only scratches the surface of what we uncovered across the Six Pillars of Trust. In our webinar, Black Sun Global APAC CEO Neale Few and Director of Research and Strategy Joanne Lee walk through the complete HSHK35 findings in detail, share further examples of standout reporting from companies including HSBC, Pearson, Bunzl, Smiths Group, Taylor Wimpey, Rathbones and Alliance Witan, and outline practical steps boards, C-suites and investor relations teams can take to move from meeting disclosure requirements to reporting that builds genuine investor trust.
Find out more here: Watch the full webinar recording on YouTube
If you'd like an in-depth review of your company's reporting, reach out to Beryl Leong, Marketing and Business Development Manager of Black Sun APAC, BLeong@blacksun-global.com.
About Black Sun
Black Sun Global is a stakeholder advisory and engagement agency that's been driving transformation and positive change for ambitious brands for more than 20 years. With deep expertise in disclosure and reporting, ESG, sustainability, and digital engagement, we reshape how organisations connect with customers, investors, employees, and the wider world.
We are trusted partners to some of the most influential global organisations, sparking innovation and sustainable performance through our strategic insights, partnerships, and proprietary technologies.
As founders of the Positive Change Group, we are on a mission to create a new kind of stakeholder relations partner. Our world-class specialists work closely with executive leadership teams to protect reputations, inspire trust, and promote responsible business practices - building resilience and long-term value in a rapidly changing world.
For more information, please visit: www.blacksun-global.com
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