Hong Kong has unveiled its latest sustainability and climate-related reporting standards, a significant step toward aligning corporate disclosures with global ESG benchmarks. The Hong Kong Institute of Certified Public Accountants […]

Hong Kong has unveiled its latest sustainability and climate-related reporting standards, a significant step toward aligning corporate disclosures with global ESG benchmarks. The Hong Kong Institute of Certified Public Accountants (HKICPA) introduced two key standards: HKFRS S1 for sustainability-related financial disclosures and HKFRS S2 for climate-related disclosures. These align fully with the International Sustainability Standards Board (ISSB) standards, reinforcing Hong Kong’s commitment to global ESG practices.

The announcement follows the Hong Kong government’s release of its Roadmap on Sustainability Disclosure. The roadmap outlines a phased implementation for mandatory ESG reporting. Beginning in 2025, Main Board issuers will adopt IFRS S2 Climate-related Disclosures on a “comply or explain” basis. By 2026, large-cap issuers will transition to mandatory reporting. By 2028, all publicly accountable entities (PAEs) and significant financial institutions must comply with the new standards.

HKICPA played a pivotal role in drafting the new framework, following extensive consultations with stakeholders. The decision to fully align with ISSB standards was overwhelmingly supported by over 90% of respondents. This alignment aims to strengthen global capital connectivity with local and regional businesses, including Mainland China.

The implementation of these standards is a cornerstone of Hong Kong’s carbon-neutral strategy, as it provides a consistent framework for companies to disclose their environmental impact. By adopting these measures, Hong Kong is positioning itself as a leader in ESG reporting, encouraging transparency and accountability across its financial markets.

This move underscores Hong Kong’s broader commitment to sustainability and carbon neutrality, ensuring that its regulatory environment meets the growing demand for reliable ESG disclosures from investors and stakeholders. With these standards, Hong Kong is setting a benchmark for integrating ESG considerations into corporate strategies, fostering a sustainable future.

Sources:

https://www.esgtoday.com/hong-kong-releases-sustainability-climate-reporting-standards/

https://www.google.com/url?q=https://www.info.gov.hk/gia/general/202412/10/P2024121000243.htm&sa=U&sqi=2&ved=2ahUKEwjA4svWwbCKAxUtSkEAHYLkEgMQFnoECBYQAQ&usg=AOvVaw1-xNdH7EdMVHddSYVZUOgj

https://www.google.com/url?q=https://www.chinadailyhk.com/hk/article/599859&sa=U&sqi=2&ved=2ahUKEwjA4svWwbCKAxUtSkEAHYLkEgMQFnoECBcQAQ&usg=AOvVaw2BxPZ6v7D6Kn2Mj1FQmH4M