Gov't unveils roadmap for sustainability disclosure in Hong Kong

It mandates compliance with the ISSB standards for public entities by 2028.

The government has launched a roadmap on sustainability disclosure in Hong Kong, setting out Hong Kong’s approach to require publicly accountable entities (PAEs) to adopt the International Financial Reporting Standards - Sustainability Disclosure Standards (ISSB Standards) no later than 2028.

The roadmap tasked the Hong Kong Institute of Certified Public Accountants (HKICPA) to develop the Hong Kong Standards on a full alignment basis with the ISSB Standards.

Following a public consultation on the exposure drafts which saw general support, the HKICPA aimed to issue the final Hong Kong Standards by the end of this year with an effective date of 1 August 2025.

Moreover, starting 1 January 2025, all main board issuers will be required to disclose against the New Climate Requirements modelling on International Financial Reporting Standards S2 Climate-related Disclosures on a "comply or explain" basis.

Issuers that are Hang Seng Composite LargeCap Index constituents (Large Cap Issuers) are further required to disclose against the New Climate Requirements on a mandatory basis starting from 1 January 2026.

The Hong Kong Exchanges and Clearing Limited (HKEX) will consult the market in 2027 on mandating sustainability reporting against the Hong Kong Standards for listed PAEs with an expected effective date of 1 January 2028, under a proportionate approach.

Additionally, relevant financial regulators will require financial institutions carrying a significant weight—being non-listed PAEs— to apply the Hong Kong Standards no later than 2028.

The roadmap also elaborates on Hong Kong's blueprint to develop a comprehensive ecosystem to support sustainability disclosures, which encompasses sustainability assurance, data and technology, as well as skills and competencies.

Key steps to be taken include sustainability assurance, where the Accounting and Financial Reporting Council will work with relevant financial regulators and stakeholders to drive the development of Hong Kong's regulatory regime for sustainability assurance and promote high-quality assurance by adopting international standards.

Aside from this, the Green and Sustainable Finance Cross-Agency Steering Group members will also continue their efforts in facilitating better sustainability disclosures and enhancing the quality of data through a multipronged approach, including promoting the development of green fintech, rolling out free data tools, and expanding the Hong Kong Taxonomy for Sustainable Finance.

Lastly, the Steering Group members and the HKICPA will continue to promote alignment with the ISSB Standards and support capacity-building efforts locally, regionally, and internationally.