The Hong Kong Institute of Certified Public Accountants (HKICPA) has announced new sustainability and climate-related reporting standards to enhance corporate transparency in Hong Kong. The standards, known as HKFRS S1 and S2, align closely with the International Financial Reporting Standards (IFRS) established by the International Sustainability Standards Board (ISSB). This is a significant development in the region’s regulatory landscape as it prepares for new corporate disclosure requirements.
The HKFRS S1 outlines the general requirements for disclosing sustainability-related financial information, while the HKFRS S2 focuses on climate-related disclosures. This initiative is part of a broader roadmap released by the Hong Kong government that sets a timeline for the implementation of sustainability reporting by companies. Starting in 2025, all Main Board issuers will be required to report in accordance with the IFRS S2 on a “comply or explain” basis. For large-cap issuers, mandatory compliance will begin in 2026, and by 2028, all publicly accountable entities will need to comply with these new standards.
The push for full alignment with ISSB standards has garnered significant support. An engagement consultation indicated that over 90% of respondents favored this move, reflecting a strong industry consensus on enhancing the comparability and consistency of sustainability reports in Hong Kong.
Edward Au, President of the HKICPA, emphasized that the adoption of these standards is a pivotal milestone in Hong Kong’s sustainability journey, bolstering its competitiveness in international capital markets. He also stated that the HKICPA is committed to supporting stakeholders through capacity-building initiatives, which include launching a platform for technical questions and enhancing the skills necessary for effective sustainability reporting.
As Hong Kong moves forward with these standards, the financial landscape is set to become more attuned to sustainability considerations, aligning local business practices with global capital market expectations.
Source: https://www.esgtoday.com/hong-kong-releases-sustainability-climate-reporting-standards/