The Hong Kong SAR Government officially released its Sustainability Disclosure Roadmap on December 10th, setting out an important timeline for large publicly accountable entities: full adoption of the International Financial Reporting Standards on Sustainability Disclosure (ISSB Standards) by 2028 at the latest. This roadmap points out a clear and concrete way forward for the sustainable development of Hong Kong's financial markets.
Image source: Official website of the Hong Kong Government
Notably, this roadmap covers multiple dimensions of sustainability disclosure. The Hong Kong Institute of Certified Public Accountants (HKICPA) is in the process of developing localized sustainability disclosure standards, the first draft of which has been subject to public consultation and gained general support, and is expected to release the final text by the end of this year and take effect from August 1, 2025 onwards.
According to HKICPA, since the release of the draft ISSB standards in early 2022, the Institute has been actively developing localized standards and has conducted extensive exchanges with over 150 organizations, and has finally decided to develop a Hong Kong Sustainability Disclosure Standard for Financial Reporting on the basis of full convergence with the ISSB standards.
On the other hand, the relevant financial regulators will also promote the roadmap process on all fronts, covering not only listed companies, but also unlisted financial institutions with significant influence will be required to apply the new standards by 2028.
The key implementation timetable of the roadmap is specified as follows: From January 1, 2025, all Main Board issuers will be required to disclose the relevant information required under the new climate requirements with reference to IFRS 2 - Climate-related Disclosures on a “comply or explain” basis. By January 1, 2026, issuers of constituent stocks of the Hang Seng Composite Large Cap Index will be required to make mandatory disclosure of the new climate requirements. HKEx plans to conduct a market consultation on mandatory sustainability reporting by listed publicly accountable entities in accordance with the Hong Kong Standards in 2027 and expects full implementation from January 1, 2028 onwards.
Image source: Hong Kong Commercial Daily
In addition to the regulatory framework, the roadmap details Hong Kong's comprehensive ecosystem-building strategy to support the development of sustainable disclosure. It focuses on three key areas and key initiatives include:
On sustainable certification, the Accounting and Financial Reporting Council (AFRC) will work with relevant financial regulators to drive the development of a regulatory regime for sustainable certification in Hong Kong that promotes high quality certification through the adoption of international standards.
At the data and technology level, the Cross-Institutional Steering Group on Green and Sustainable Finance will adopt a multi-pronged approach, including promoting the development of green fintech, launching free data tools, and expanding Hong Kong's taxonomy of sustainable finance.
Skills training will be another focus. Steering Group members and HKICPA will continue to promote convergence with ISSB standards and support skills training locally, regionally and internationally.
The Secretary for Financial Services and the Treasury, Mr Christopher Hui, emphasized that as a major international financial center and a hub for green and sustainable finance, Hong Kong is taking continuous steps to strengthen its competitiveness by complying with international standards and best practices. This roadmap provides a transparent and clear sustainability reporting path for publicly accountable entities.
For companies and investors, this means that compliance is no longer a single regulatory requirement, but an important means of enhancing the competitiveness and attractiveness of companies. With the gradual implementation of the ISSB Code, companies need to revisit their sustainability strategies and deeply integrate environmental, social and governance (ESG) factors into their core business.
Editor's Notes:
Hong Kong's roadmap for the ISSB Code demonstrates its strategic vision and forward thinking as an international financial center. With a clear timetable and multi-dimensional support, Hong Kong is proactively guiding the financial market's transformation towards sustainability. This is not only a regulatory requirement, but also a new understanding of corporate social responsibility. The step-by-step, multi-level implementation strategy, from disclosure and certification to skills training, reflects the systematic thinking of a mature financial market in addressing the global climate challenge. For companies, this means that ESG is no longer a fringe topic, but a core competency. This initiative in Hong Kong could become an important benchmark for sustainable financial development in Asia and globally.
