The Stock Exchange of Hong Kong Limited (HKSE) published a consultation paper on April 14 which seeks feedback on proposals to strengthen climate-related disclosures by HKSE listed companies. A recent Seyfarth memo discusses the proposed requirements and their underlying purpose:
“To keep pace with international developments, the HKSE has now proposed to mandate all Hong Kong issuers to make climate-related disclosures in their ESG reports, and to introduce new climate-related disclosures that align with the International Sustainability Standards Board Climate Standard. The key proposals cover four key areas: ‘Governance, ‘Strategy’, ‘Risk management’ and ‘Metrics and targets’.
The memo discusses that the revised rules will come into effect on January 1, 2024 and will apply to companies reporting on 2024 data forward. Currently, HKSE listed companies must disclose information related to governance of ESG issues and certain climate information on a “comply or explain” basis. However, the new rules will see these requirements bolstered with more required information in company disclosures.
The HKSE rules are just another example of proliferating disclosure rules around the globe. Like many current and expected disclosure mandates, the HKSE is aligning their requirements with recently published ISSB standards. The memo notes that the HKSE requirements closely parallel the US SEC’s proposed rule on climate-related disclosures. Further standardization of disclosure mandates will hopefully reduce the reporting burden on multinational companies which fall into scope of multiple reporting mandates.