The Hong Kong government has announced a significant step towards enhancing corporate transparency and accountability with the release of its Roadmap on Sustainability Disclosure. This roadmap outlines plans to implement sustainability reporting requirements for companies in alignment with the IFRS Foundation’s International Sustainability Standards Board (ISSB) standards. Beginning in 2025, specific listed companies will be required to follow a “comply or explain” approach regarding these sustainability disclosures, while larger corporations will face mandatory compliance starting in 2026.
This initiative follows a previous vision statement from earlier in the year aimed at aligning Hong Kong’s sustainability reporting with international standards, impacting various entities including listed companies and regulated financial institutions. The Hong Kong Institute of Certified Public Accountants (HKICPA) has already proposed exposure drafts of sustainability-related and climate-related reporting standards that fully align with the ISSB.
Under the new roadmap, all Main Board issuers are set to commence reporting against the IFRS S2 Climate-related Disclosures on a “comply or explain” basis in 2025. Large-cap companies will be required to adhere to these standards mandatorily starting in 2026. Furthermore, by 2028, all publicly accountable entities and significant financial institutions will also be obligated to adopt the new standards.
To support the implementation, the government is planning to develop a regulatory framework for sustainability assurance and promote green fintech while providing free data tools and expanding the Hong Kong Taxonomy for Sustainable Finance.
Christopher Hui, Hong Kong’s Secretary for Financial Services and the Treasury, emphasized the city’s commitment to maintaining its role as a prominent international financial center and sustainable finance hub. He noted that the adoption of the ISSB Standards underscores Hong Kong’s dedication to facilitating global green financing and investment aligned with the transition towards a sustainable economy.