Roadmap on Sustainability Disclosure
Hong Kong releases a roadmap on sustainability disclosure, aimed at outlining its plan to fully apply ISSB standards in the coming years and build Hong Kong into an international hub for green and sustainable finance.
In the 2023 Policy Address, the Hong Kong government announced the development of a roadmap on sustainable disclosure. In 2024, Hong Kong released the Green Future Plan and planned to officially release the roadmap within the year.
Related Post: Hong Kong Releases 2024 Green Future Plan
Hong Kong Sustainability Disclosure Standards
In September 2024, the Hong Kong Institute of Certified Public Accountants (HKICPA) released a draft for soliciting opinions on the Hong Kong sustainability disclosure standards. Based on the International Sustainability Standards Board (ISSB) standards, the draft includes the Exposure Draft HKFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and the Exposure Draft HKFRS S2 Climate-related Disclosures.
The HKICPA believes that as of September 2024, more than 30 jurisdictions worldwide have incorporated the ISSB standards into their sustainable disclosure frameworks. Hong Kong sustainability disclosure standards based on the ISSB standards can be consistent with international standards, while maintaining interoperability with the climate information disclosure guidelines issued by the Hong Kong Exchange. The HKICPA will release the official version of sustainability disclosure standards before the end of the year, which will come into effect in August 2025.
Application of Sustainability Disclosure Standards
Hong Kong will apply the sustainability disclosure standards in stages. The first entities to be included in the regulatory scope are Publicly Accountable Entities, which refer to large listed companies in Hong Kong and influential large non-listed financial institutions.
For large listed companies in Hong Kong, the Hong Kong Exchange issued climate information disclosure guidelines in April 2024, requiring all main board issuers to disclose information based on the principle of Comply or Explain, starting from January 2025. Starting from January 2026, large listed companies must implement mandatory disclosure in accordance with guidelines. In 2027, the Hong Kong Exchange will conduct another market consultation on climate information disclosure issued by large listed companies, in order to require the first batch of listed companies to disclose based on the Hong Kong sustainability disclosure standards in 2028.
For large non-listed financial institutions, regulatory agencies such as the Hong Kong Monetary Authority (HKMA) will introduce industry regulatory requirements related to climate and other sustainable development entities in the future, and these institutions will also disclose based on the Hong Kong sustainability disclosure standards no later than 2028.
Hong Kong Sustainability Disclosure Ecosystem
Hong Kong plans to establish a sustainability disclosure ecosystem from the following perspectives to ensure the smooth application of sustainability disclosure standards:
- Sustainability Assurance: The International Auditing and Assurance Standards Board (IAASB) released the International Standard on Sustainability Assurance 5000 (ISSA 5000) in November 2024. The HKICPA plans to develop Hong Kong sustainability assurance standards based on it and publish them by the end of 2025. The Hong Kong Accounting and Financial Reporting Council plans to conduct a public consultation on the regulatory framework for sustainability assurance by 2025, to promote the development of sustainability assurance system.
- Data and Technology: In February 2024, Hong Kong Green Week released the Hong Kong Green Fintech Map, providing information on green fintech companies. In May 2024, the HKMA released the Sustainable Finance Taxonomy, which provides a definition of green economic activities. In June 2024, Hong Kong launched the Green and Sustainable Fintech Proof of Concept Funding Support Scheme to promote the research and application of green fintech solutions. Hong Kong plans to continue improving sustainable data quality, enhancing data utilization efficiency, and expanding the application scope of taxonomy.
- Skills and Competencies: Hong Kong plans to train professionals in the sustainable finance industry through seminars and support sustainable finance training through initiatives such as the Pilot Green and Sustainable Finance Capacity Building Support Scheme.
Reference:
Government Launches Roadmap on Sustainability Disclosure in Hong Kong
