Overview of the rules
Introduced: April 19, 2024 (HKEX consultation conclusions)
Effective from: Financial years beginning January 1, 2025, with phased application across large caps, other Main Board, and GEM issuers
Last modified: April 2024 (final implementation guidance)
Region(s): Hong Kong SAR
About the HKEX climate-related disclosure rules
The Hong Kong Exchanges and Clearing Limited (HKEX) has formally adopted IFRS S2 on Climate-related Disclosures into its ESG Listing Rules, with reference to IFRS S1 (General Sustainability Disclosures).
HKEX’s Climate-related Disclosure Rules align Hong Kong with global sustainability reporting standards and are designed to improve transparency and comparability of climate-related information. The requirements support investor decision-making and reinforce Hong Kong’s commitment to achieving carbon neutrality by 2050.
Disclosures must address governance, strategy, risk management, and metrics and targets related to climate change, with phased compliance planned to accommodate varying levels of organizational readiness and maturity across issuers.
Criteria for compliance
Main Board Large Cap issuers (Hang Seng Index Large Cap constituents)
Full IFRS S2-aligned climate disclosure is mandatory from FY 2025 onward.
Other Main Board issuers
“Comply or explain” approach in FY 2025, becoming fully mandatory by FY 2026.
GEM Board issuers
Voluntary disclosure encouraged, though not mandatory.
Compliance timelines
FY 2025
- Main Board Large Cap: Mandatory IFRS S2-aligned climate disclosure
- Other Main Board: Comply-or-explain basis
- GEM: Voluntary reporting encouraged
FY 2026 onward
- All Main Board issuers: Mandatory reporting.
- GEM: Still voluntary but expected to align progressively.
Disclosure requirements
All applicable entities must provide disclosures in line with IFRS S2, including:
Governance
Roles of the board and management in overseeing climate-related issues.
Strategy
Identification and assessment of climate-related risks and opportunities, including quantitative scenario analysis and transition planning.
Risk Management
Integration of climate risk into enterprise risk processes.
Metrics & Targets
- Scope 1 and Scope 2 greenhouse gas (GHG) emissions (mandatory)
- Scope 3 emissions (initially recommended; may become mandatory in the future)
- Climate-related targets, KPIs, and progress updates
- Capital allocation alignment with climate strategy
Disclosures can be presented as a standalone climate or ESG report, or integrated within annual financial reports. Reports must be board-approved and filed within four months of fiscal year-end.
Third-party assurance
No assurance is currently mandated at launch. HKEX encourages voluntary assurance, and may consider audit mandates in future phases once market conditions mature.
Penalties for non-compliance
Failure to comply with ESG Listing Rules may result in:
- Public censure or reprimand
- Suspension or delisting of shares
- Monetary penalties under the oversight of the Securities and Futures Commission (SFC)
- Reputational damage and increased investor scrutiny
