Hong Kong just made ESG reporting a lot more serious. If you run or manage a company listed on the Hong Kong Stock Exchange, you now have real deadlines, real requirements, and real consequences for ignoring them.
The days of treating sustainability disclosures as a box-ticking exercise are over. Starting 2025, large-cap companies must report their greenhouse gas emissions. By 2026, full climate disclosures will become mandatory. And by 2028, the rules will apply across the board to all large publicly accountable entities.
That’s a tight window. And the companies that wait until the last minute will find themselves scrambling, while those that start now will be ahead of the curve, more attractive to investors, and better positioned for long-term growth.
This guide breaks down exactly what’s changed, what’s coming, and what you need to do, in plain and simple terms.
ESG stands for Environmental, Social, and Governance. It’s basically a way for companies to show the world how they operate beyond just making money.
The environmental part looks at things like how much carbon your company produces, how much energy and water you use, and how you manage waste.
The social part looks at how you treat your employees, your suppliers, and the communities around you.
The governance part looks at how your company is run, who’s making decisions, and whether there are proper checks and controls in place.
For a long time, ESG reporting in Hong Kong was more of a “nice to have.” That’s changing fast.
HKEX, which is the body that runs the Hong Kong Stock Exchange, updated its ESG Reporting Guide. They renamed it the ESG Reporting Code, and it officially came into effect on January 1, 2025.
The biggest change is the addition of a new section called Part D. This section is specifically focused on climate. It asks companies to report on things like how they manage climate risks, who at the board level is responsible for it, and how much greenhouse gas the company is producing.
This new section is based on international standards set by the ISSB (International Sustainability Standards Board). The idea is to bring Hong Kong’s reporting rules in line with what other major financial markets around the world are already doing.
This is where it helps to understand that the rules apply differently depending on the size and type of your company.
Large-cap issuers are the biggest companies listed on HKEX. Starting in 2025, these companies must now mandatorily report their Scope 1 and Scope 2 greenhouse gas emissions. This is no longer optional.
Other Main Board issuers (companies listed on the main board but not in the large-cap category) are on what’s called a “comply or explain” basis. That means they either follow the new rules, or they write a clear explanation of why they haven’t. But relying on explanations long-term is not a sustainable strategy, so it’s better to start building toward compliance now.
GEM-listed companies are smaller companies listed on a separate board. For now, ESG reporting remains largely voluntary for them, though the direction of travel is clear.
These terms come up a lot in ESG reporting, so it’s worth knowing what they mean.
Scope 1 is everything your company directly produces. Think fuel burned in company vehicles, or energy used in your own facilities.
Scope 2 is the emissions that come from the electricity or energy you buy and use. You didn’t produce that electricity yourself, but you’re still responsible for it indirectly.
Scope 3 is everything else across your entire supply chain, from your suppliers all the way to what happens when customers use your products. This one is broader and harder to measure. It’s not mandated yet for most companies, but investors are paying close attention to it. You can learn more about how financed emissions fit into this picture for financial institutions.
Right now, large-cap companies in Hong Kong need to focus on getting Scope 1 and 2 reporting right.
The 2025 requirements are just the beginning. Here’s the full picture:
In 2026, large-cap issuers will need to report full climate-related disclosures in line with IFRS S2. This goes beyond just emission numbers. Companies will need to show how climate risks are being managed at the strategy level, what scenarios they’ve considered, and how the board is overseeing all of it.
By 2028, Hong Kong is aiming for full adoption of what are called HKFRS S1 and S2 across all large publicly accountable entities. These are Hong Kong’s local versions of the global ISSB standards, and they cover both general sustainability disclosures (S1) and climate-specific disclosures (S2).
In short, the requirements will keep growing. Companies that start building good reporting habits now will be in a much stronger position when each new deadline arrives.
Compliance is the obvious reason. But there are real business benefits here too.
Investors look at ESG performance when deciding where to put their money. If your disclosures are transparent and well-structured, you become a more attractive company to invest in.
Tracking your emissions and energy use also tends to reveal inefficiencies you didn’t know existed. That often leads to cost savings. Read more about how energy audits can fast-track both savings and ESG goals simultaneously.
And as more markets around the world adopt similar standards, as seen with Singapore’s climate reporting rules, companies that already have strong ESG reporting in place will find it easier to do business globally. The GHG Protocol, the internationally recognised standard for measuring greenhouse gas emissions, is a valuable resource for understanding how to structure your data collection.
If you’re a large-cap issuer and haven’t started yet, the most urgent thing is to begin collecting your Scope 1 and 2 emissions data and to make sure someone at the board level is clearly responsible for climate-related oversight.
If you’re a Main Board issuer, start reviewing where you stand against the new Part D requirements. Even if you’re relying on comply-or-explain for now, having a clear plan shows regulators and investors that you’re taking this seriously. Understanding ESG data management will be key to building that foundation efficiently.
And if you’re a smaller listed company, it’s never too early to start building the foundations. You may also want to explore ESG assurance services to ensure your disclosures meet the credibility standards investors now expect.
