HKEX Mandatory Climate Disclosure

From 1 January 2025, all HKEX Main Board issuers are required to make climate-related disclosures aligned with the ISSB's IFRS S2 Climate-related Disclosures standard, making Hong Kong one of the first jurisdictions in Asia to mandate ISSB-aligned climate reporting.

The new climate disclosure requirements were introduced through amendments to the Listing Rules in April 2024, following extensive market consultation. The requirements adopt a phased approach, with Scope 1 and 2 emissions disclosure mandatory from day one, and Scope 3 emissions, scenario analysis, and certain other provisions subject to transitional relief for up to two years.

Four-Pillar Framework

The requirements follow the TCFD/ISSB four-pillar structure. Governance disclosures must describe the board's oversight of climate-related risks and opportunities, including the governance body responsible, how climate is integrated into strategy and risk management, and the skills and competencies available. Strategy disclosures must describe climate-related risks and opportunities that could reasonably be expected to affect the issuer's business model, strategy, and cash flows, including the current and anticipated effects on the issuer's financial position and performance.

Risk Management disclosures must describe the processes used to identify, assess, prioritise, and monitor climate-related risks, including how these are integrated into the issuer's overall risk management. Metrics and Targets disclosures must include Scope 1 and 2 greenhouse gas emissions, climate-related targets, and progress against those targets.

Transitional Provisions

Recognising the challenges of first-time climate reporting, HKEX has provided several transitional accommodations. Scope 3 emissions disclosure is not required in the first reporting year but must be disclosed from the second year onwards. Scenario analysis may use qualitative approaches initially, with quantitative analysis expected as capabilities mature. Certain financial effects disclosures benefit from a two-year transition period.

Assurance Requirements

While external assurance of climate disclosures is not initially mandatory, HKEX expects the market to move toward assurance over time, consistent with the International Auditing and Assurance Standards Board's (IAASB) development of the International Standard on Sustainability Assurance (ISSA 5000). Issuers are encouraged to obtain at least limited assurance on Scope 1 and 2 emissions data.

Further Reading

• HKEX Climate Consultation Conclusions — April 2024 conclusions
• IFRS S2 — The underlying international standard

Related Topics

• HKEX ESG Reporting Code
• Scope 3 Emissions
• TCFD\n