Hong Kong advances climate risk rules in corporate policy: report

This regulatory progress demonstrates its intention to institutionalise climate risk management in corporate governance.

Hong Kong is moving to the forefront of Asia-Pacific’s climate policy landscape by mandating climate-related financial disclosures aligned with the International Sustainability Standards Board’s (ISSB) IFRS S2 framework.

Starting in 2025, all listed companies will be required to publish climate transition plans, a significant policy shift placing Hong Kong alongside early adopters such as Japan, Singapore, and Australia.

As noted in MSCI’s APAC Climate Action Progress Report 2025, this regulatory progress demonstrates Hong Kong’s intention to institutionalise climate risk management in corporate governance.

However, the report highlights a critical gap: no Hong Kong companies were identified amongst the 837 firms across the region that disclosed a formal transition plan in 2024.

This indicated that, despite strong policy signals, many companies have yet to begin formalising or disclosing actionable decarbonisation strategies.

The report also pointed to challenges in Hong Kong’s carbon market aspirations. As the city seeks to establish itself as a hub for voluntary carbon trading, concerns remain about the quality and integrity of available credits.

MSCI warned that weak standards and a lack of regulatory alignment across markets may undermine confidence in carbon offsets, and calls for stronger government involvement to support high-integrity markets.

Whilst Hong Kong’s regulatory architecture is evolving quickly, MSCI concludes that more needs to be done to ensure private sector readiness and meaningful transition planning.