Guidance for Climate Disclosures
The Hong Kong Exchange (HKEX) releases guidance for climate disclosures, aiming to require listed companies to disclose climate information based on the Climate-related Sustainability Disclosure Standards (IFRS S2) in stages.
IFRS S2 is formulated by the International Sustainability Standards Board (ISSB). ISSB released the first Preview of the Inaugural Jurisdictional Guide for the Adoption or other Use of ISSB Standards in February this year to help jurisdictions around the world formulate policies related to ISSB sustainability standards.
Related Post: ISSB Releases Preview of the Inaugural Jurisdictional Guide for the Adoption of ISSB Standards
Contents of HKEX’s Guidance for Climate Disclosures
The Hong Kong Exchange previously released a consultation document on climate-related information disclosure under the environmental, social and governance framework and received 115 responses from accountants, lawyers, listed companies, asset management companies and other stakeholders. Most of the responses were in favor of the Hong Kong Stock Exchange’s implementation of climate information disclosure. The guidance for climate disclosures released this time will be implemented in phases to solve the difficulties faced by some issuers.
The Hong Kong Exchange divides issuers into three categories, namely Hang Seng Composite Large Cap Index constituent issuers (LargeCap Issuers), Main Board Issuers (other than LargeCap Issuers) and Growth Enterprise Market issuers (GEM Issuers).
Regarding Scope 1 and Scope 2 greenhouse gas emission information disclosure, the Hong Kong Stock Exchange requires all issuers to make mandatory disclosures in the financial year starting after January 1, 2025.
Regarding Scope 3 greenhouse gas emissions information disclosure, the Hong Kong Stock Exchange requires LargeCap Issuers to implement the Comply or Explain principle in the fiscal year beginning after January 1, 2025 and turns to mandatory disclosures for fiscal years beginning after January 1, 2026. Main Board Issuers will implement the Comply or Explain principle in the financial year starting after January 1, 2025, and GEM Issuers will implement voluntary disclosure in the financial year starting after January 1, 2025.
The Hong Kong Exchange plans to provide further guidance and training based on the issuer’s compliance with information disclosure in the future.
Reference:
Exchange Publishes Conclusions on Climate Disclosure Requirements
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