Hong Kong Unveils Roadmap for Sustainability Disclosure

The Hong Kong Government has launched a Roadmap on Sustainability Disclosure to align the region with international standards and bolster its role as a leader in green and sustainable finance.

Announced on December 10, the initiative mandates publicly accountable entities (PAEs) to adopt the International Financial Reporting Standards - Sustainability Disclosure Standards (ISSB Standards), ensuring full implementation by 2028.

Hong Kong's Sustainability Disclosure Roadmap

The Secretary for Financial Services and the Treasury, Mr. Christopher Hui, emphasized the importance of this move for Hong Kong's standing as a premier financial hub. He stated,

"The launch of this roadmap on the full adoption of the ISSB Standards clearly highlights our commitment to playing a leading role in facilitating green and sustainable financing and investment for the global agenda of green transition."

The roadmap establishes a structured, transparent approach for PAEs, focusing on enhancing capacity building and leveraging technology to streamline sustainability reporting.

Key Milestones and Phases

The Hong Kong Institute of Certified Public Accountants (HKICPA) is at the forefront of developing Hong Kong's Sustainability Disclosure Standards, fully aligned with the ISSB Standards. After widespread public consultation, the final version is expected to be issued by the end of this year, taking effect on August 1, 2025.

Here are the significant milestones:

1. Main Board Issuers:

   • From January 1, 2025, all Main Board issuers must comply with New Climate Requirements aligned with IFRS S2 Climate-related Disclosures under a "comply or explain" approach.

   • Large Cap Issuers (Hang Seng Composite LargeCap Index constituents) will need to meet these requirements on a mandatory basis starting January 1, 2026.

     
     

2. Mandatory Adoption by 2028:

   • The Hong Kong Exchanges and Clearing Limited (HKEX) will conduct a market consultation in 2027 regarding the mandatory adoption of the Hong Kong Standards by all listed PAEs. The effective date is targeted for January 1, 2028, with proportionality considerations.

   • Financial regulators will enforce compliance for significant financial institutions (non-listed PAEs) by the same deadline.

   
   
   
   

Building a Robust Sustainability Ecosystem

The roadmap goes beyond reporting, envisioning a comprehensive ecosystem to support sustainability disclosures in three critical areas:

1. Sustainability Assurance: The Accounting and Financial Reporting Council (AFRC) will collaborate with stakeholders to build a high-quality regulatory framework for sustainability assurance, adhering to international standards.

   
   

2. Data and Technology:

   • The Green and Sustainable Finance Cross-Agency Steering Group will continue advancing green fintech solutions, enhancing data quality, and expanding tools such as the Hong Kong Taxonomy for Sustainable Finance.

   • Free data tools will be promoted to facilitate accurate sustainability disclosures.

     
     

3. Skills and Competencies: Capacity building remains a priority, with the Steering Group and HKICPA supporting alignment with ISSB Standards locally and internationally.

   
   
   
   

Collaboration Across Regulators

The roadmap reflects a joint effort from multiple regulatory bodies, including the Securities and Futures Commission, the Hong Kong Monetary Authority, the Insurance Authority, the Mandatory Provident Fund Schemes Authority, the AFRC, the HKEX, and the HKICPA. This coordinated approach ensures the roadmap’s goals are achieved effectively and on schedule.

The full roadmap is available on the Financial Services and the Treasury Bureau (FSTB) website: FSTB Roadmap 2024.

Hong Kong's latest initiative marks a significant step forward in aligning its financial market with global sustainability goals, reinforcing its status as a progressive leader in green finance. By adhering to international standards, the region sets a precedent for sustainable investment and environmental responsibility on a global scale.

Stay informed on the latest ESG insights and updates. Follow us on LinkedIn.  

---

Stay Informed and Join the Conversation!

Want to stay ahead in the world of sustainability? Subscribe to our newsletter for the latest insights on ESG trends, sustainability reporting, and innovative strategies.

💡 Be part of the change! Join our ESG Community Forum to share your perspectives, connect with like-minded professionals, and shape the future of sustainable practices.

👉 Subscribe Now and Engage in the Forum