HKEX implements ISSB climate disclosures, enhancing transparency

This is seen to solidify Hong Kong’s standing as a prominent financial hub.

The Hong Kong Exchanges and Clearing Limited (HKEX) will start adopting the new requirements for climate-related disclosures set by the International Sustainability Standards Board (ISSB) on 1 January 2025.

Its rollout, which makes HKEX one of the first exchanges to do so, will be implemented in phases, starting with companies listed on the main board next year, then the large cap issuers by 2026. 

The ISSB was established by the International Financial Reporting Standards (IFRS) Foundation in 2021. Two sets of requirements on sustainability and climate-related disclosures (IFRS S1 and S2) were published last year, which are collectively known as the ISSB Standards. The International Organisation of Securities Commissions (IOSCO) has said the guidelines are the appropriate global framework for capital markets.

According to PwC, the technical consultant of HKEX, the new requirements will be voluntary for GEM-listed companies, except for scope 1 and scope 2 greenhouse gas emissions which will be mandatory for all Main Board and GEM-listed companies starting next year. 

Kelly Lee, senior vice president, of policy and secretariat services, listing division at HKEX, said various relief measures were also set under the new climate requirements.

“One of these measures is capability relief, which recognises that different listed companies are at different stages in terms of skills and capabilities. However, companies are still expected to enhance their capabilities over time,” she explained.

PwC noted that the move will help “cement Hong Kong’s position as an international financial centre, by channelling international capital to our region and unlocking opportunities in the sustainable investment space.”

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Industry experts expressed their support for the move during a seminar organised by PwC in preparation for the implementation.

“ISSB is going to create higher transparency on climate disclosures and, very importantly, making forward-looking information available. How companies are making efforts in climate resilience and energy transition are very important information for investors,” Prudential head of Responsible Investment Liza Jansen said.