Climate-related corporate reporting has rapidly shifted from voluntary practice to regulated expectation, particularly for listed companies in major financial centres. In Hong Kong, this trend has culminated in a new set of requirements under the Hong Kong Exchanges and Clearing Limited (HKEX) ESG framework that strengthens climate transparency and aligns local practice with global norms. Hong Kong’s climate disclosure expectations reflect investor demand for high-quality environmental information and form a key part of corporate governance and risk management.
From January 1, 2025, enhanced climate-related disclosure obligations — based on the International Sustainability Standards Board (ISSB) climate standard (IFRS S2) — will begin to affect issuers in phases, with a mix of mandatory and “comply or explain” provisions depending on issuer size and market tier.
Hong Kong is a global financial hub with more than 2,600 listed companies that already operate under mandatory ESG reporting rules, requiring annual ESG disclosures published alongside financial reports.
The introduction of enhanced climate disclosure requirements signals a deeper integration of climate-related strategy and financial risk into corporate reporting. These changes aim to improve the quality, comparability, and investor relevance of climate information, and reflect the global move toward ISSB-aligned sustainability reporting.
This context matters for multiple stakeholders:
Hong Kong’s climate disclosure regime introduces structured, climate-centric reporting requirements in Part D of the HKEX ESG Reporting Code (renamed ESG Code) that combine governance, strategy, risk management, and metrics disclosures.
These enhanced requirements take effect in phases:
All listed issuers must begin reporting Scope 1 and Scope 2 greenhouse gas (GHG) emissions as core quantitative disclosures.
In addition, other climate-related disclosures — including risks, opportunities, governance, strategy, and metrics — will be introduced on a “comply or explain” basis for Main Board issuers, with voluntary reporting encouraged for GEM issuers.
LargeCap issuers — those that are constituents of the Hang Seng Composite LargeCap Index — must publish full climate-related disclosures on a mandatory basis.
This phased rollout balances the need for credible, ISSB-aligned reporting with a reasonable preparation period for issuers of different sizes.
Under the new regime, climate disclosures must encompass four essential areas:
This structure mirrors key global frameworks such as the IFRS S2 standard and the Task Force on Climate-related Financial Disclosures (TCFD), making it easier for companies reporting in multiple jurisdictions to align practices.
Hong Kong’s climate disclosure enhancements primarily apply to listed companies subject to HKEX rules. ESG reporting has been mandatory for all listed issuers for several years and must be published alongside annual reports.
However, climate reporting is evolving into a standard expected even beyond listed entities:
While these rules do not yet legally require private companies to report, many firms are adopting similar disclosure practices to meet investor and supply chain demands, ensuring they stay competitive and credible in Asia-Pacific markets.
Hong Kong’s climate disclosure expectations are comprehensive and require both narrative context and quantitative data.
Key components include:
Companies must disclose their direct (Scope 1) and energy-indirect (Scope 2) greenhouse gas emissions, forming the quantitative backbone of early reporting phases.
Boards and executive teams must explain how climate-related risk management is structured, including committee responsibilities and processes for monitoring climate exposure.
Issuers should describe how climate considerations are integrated into strategy and decision-making, including scenario analysis and resilience planning in the context of short, medium, and long-term business horizons.
The processes used to identify, assess, prioritise, and monitor climate risks (physical and transition) must be disclosed with sufficient clarity for investment decisions.
In addition to emissions, companies should disclose climate-related performance metrics and any targets they have set, including progress toward these targets and the underlying methodology.
Adopting strong climate disclosure practices ahead of mandatory deadlines offers several strategic advantages:
Investors are using climate disclosures more actively in investment decisions, linking them to risk ratings and valuation models. Although disclosures do not directly guarantee financial returns, they influence investor perception and risk pricing — particularly in capital markets as significant as Hong Kong’s.
Many companies face similar hurdles in preparing for enhanced climate disclosure:
Addressing these requires strategic planning: invest in data governance, ensure cross-functional ownership (finance, sustainability, risk), and document assumptions and methodologies for transparency.
At Clenergize, we help organisations prepare for Hong Kong’s climate disclosure requirements from the ground up. This includes:
Our advisory approach ensures disclosures are not just compliant but decision-useful and investor-ready.
Hong Kong’s climate disclosure expectations are more than regulatory boxes to tick. They represent a meaningful step toward aligning local reporting with global norms like IFRS S2, while embedding climate risk and opportunity analysis into mainstream corporate governance.
By preparing early, organisations can turn reporting requirements into strategic insights — improving investor trust, risk visibility, and long-term resilience. As climate reporting regimes mature worldwide, Hong Kong’s phased approach provides a practical runway for companies to build credible, Asia-Pacific-ready disclosure practices.
