The Hong Kong government announced the release of its Roadmap on Sustainability Disclosure in Hong Kong, outlining the details of its plans to implement sustainability reporting requirements for companies, with a view to introducing reporting based on the IFRS Foundation’s ISSB standards for some listed companies on a comply-or explain basis next year, and with mandatory requirements for large-cap companies starting in 2026.

The publication of the new roadmap follows the release earlier this year by the government of its “vision statement on developing sustainability disclosure ecosystem in Hong Kong,” aimed at aligning local sustainability reporting requirements with international standards, and intended for entities including listed companies and regulated financial institutions such as banks, fund managers and insurance companies. Following the vision statement release, the Hong Kong Institute of Certified Public Accountants (HKICPA) issued exposure drafts with proposed sustainability-related and climate-related reporting standards for companies, fully aligned with the standards issued by the IFRS Foundation’s International Sustainability Standards Board (ISSB).

In the new roadmap the government confirmed that the new reporting requirements will be fully aligned with the ISSB standards. Published in June 2023, the ISSB standards include general sustainability (IFRS S1) and climate (IFRS S2) reporting standards. The government added that the HKICPA will issue the final ISSB-aligned Hong Kong Standards by the end of this year with an effective date of August 1, 2025.

The new roadmap set out the timeline for implementation of the new sustainability reporting requirements. Under the roadmap, all Main Board issuers will be required to begin reporting against the IFRS S2 Climate-related Disclosures on a “comply or explain” basis in 2025, with large cap issuers to begin on a mandatory basis in 2026, and the HKEX to subsequently consult on mandating sustainability reporting against the new Hong Kong Standards, with an expected date for all listed publicly accountable entities (PAEs) no later than 2028. Additionally, significant financial institutions will also be required to apply the standards by 2028.

The roadmap also details Hong Kong’s plans to support the implementation of the new sustainability reporting requirements, including working to develop a regulatory regime for sustainability assurance, promoting the development of green fintech, rolling out free data tools, and expanding the Hong Kong Taxonomy for Sustainable Finance.

Hong Kong’s Secretary for Financial Services and the Treasury, Christopher Hui, said:

“As a premier international financial centre as well as a green and sustainable finance hub, Hong Kong is taking consistent steps to consolidate its competitiveness through observing international standards and best practices. The launch of this roadmap on the full adoption of the ISSB Standards clearly highlights our commitment to continuing to play a leading role in facilitating green and sustainable financing and investment for the global agenda of green transition.”