Hong Kong regulators unveiled plans on Tuesday to require major listed companies to adopt international sustainability reporting standards by 2028, aiming to entrench the city’s status as a regional green finance hub.
Under the new roadmap, companies listed on the main board of the Hong Kong Stock Exchange (HKEX) must comply with the bourse’s latest climate requirements based on International Financial Reporting Standards (IFRS) S2 climate-related disclosures starting January 2025, with a “comply or explain” approach.
Large-cap companies on the Hang Seng Composite Index face mandatory reporting from Jan 1, 2026.
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The HKEX plans to consult market participants in 2027 before fully implementing the standards for all listed public entities by 2028. Financial institutions deemed to be significant will also need to follow these requirements, even if not publicly listed.
The Hong Kong Institute of Certified Public Accountants will issue final Hong Kong Standards aligned with the IFRS Sustainability Disclosure Standards by the end of 2024, taking effect from August 2025, following broad market support during public consultation.
Secretary for Financial Services and the Treasury Christopher Hui Ching-yu said, “As a premier international financial center as well as a green and sustainable finance hub, Hong Kong is taking consistent steps to consolidate its competitiveness through observing international standards and best practices.”
He added that the roadmap “highlights our commitment to continuing to play a leading role in facilitating green and sustainable financing and investment for the global agenda of green transition”.
The roadmap also outlines plans to develop a comprehensive ecosystem supporting sustainability disclosures, covering assurance, data technology, and professional training, a government statement released on Tuesday said.
READ MORE: Addressing obstacles to comply with HKEX’s new climate disclosure requirements
The move aligns with global trends following the creation of the International Sustainability Standards Board (ISSB) by the Trustees of the IFRS Foundation in November 2021 at the COP26 climate summit.
The ISSB aims to simplify the global sustainability disclosure landscape, reducing the complexity of having multiple sources of reporting guidance, while building on the established expertise and practice associated with market leading frameworks and standards, according to the IFRS Foundation.
The Chinese mainland has also announced plans to implement mandatory ISSB-aligned reporting by 2030, with initial standards to be introduced by 2027.
Contact the writer at tianyuanzhang@chinadailyhk.com
