On April 19, 2024, The Hong Kong Stock Exchange (The Stock Exchange of Hong Kong Limited, HKEX) published conclusions based on consultations with experts on expanding disclosure of climate-related information within the framework of the environmental, social and management Requirements (ESG) system.
The Exchange took into account the Hong Kong Government's vision and approach to the development of an integrated ecosystem of sustainable development disclosure and the recommendations of the International Council for Sustainable Development Standards (ISSB), published in February 2024. The Exchange has made proposals to ensure that the information disclosed is based on the standards of IFRS S2 related to climate.
The exchange will use a step-by-step approach and easing in the implementation of standards to help listed companies meet the new requirements without undue burden and within a reasonable time frame, commented Catherine Ng, Head of HKEX Listing Department.
The new climate requirements are part of Hong Kong's broader roadmap for local adoption of ISSB standards.
According to Ms. Ng, this should increase the attractiveness and competitiveness of Hong Kong's capital markets.
The key features of the New climate Requirements are:
- New climate requirements have been developed on the basis of IFRS S2. To address the reporting problems that some issuers may face, easing has been introduced, including measures to ensure proportionality and scaling.
- The amended Listing Rules will come into force on January 1, 2025.
The following step-by-step approach has been adopted to implement New climate requirements:
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Disclosure of greenhouse gas emissions Scope 1 and Scope 2 |
Disclosure of information other than greenhouse gas emissions Scope 1 and Scope 2 |
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Large-cap issuers (included in the Hang Seng Composite LargeCap index) |
Mandatory disclosure of information |
- "Observe or explain": in financial years beginning on or after January 1, 2025. |
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Companies that trade on the main exchange platform (except for issuers with large capitalization) |
"Observe or explain" |
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Issuers traded on the Hong Kong Stock Exchange for Growing Companies (GEM) |
Voluntary disclosure of information |
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Instructions and Manual:
The Exchange has also published an Implementation Guide designed to help issuers meet New climate requirements. The Implementation Guide contains references to the relevant principles of IFRS S1, and issuers are encouraged to refer to the Implementation Guide and apply it when preparing disclosures in accordance with New climate requirements.
The Exchange will provide further recommendations and provide guidance as necessary, based on its observations and analysis of issuers' compliance with the requirements.
The conclusion of the consultations and copies of the materials submitted by the respondents are available on the HKEX website.
