Last year, the Hong Kong Stock Exchange (HKEX) published a consultation on climate disclosure requirements. After reviewing the consultation, HKEX is adopting climate disclosure standards in line with the IFRS 1 and IFRS 2 standards published by the ISSB. ESG Today reports on the new standards stating:
“Under the new rules, all issuers on the exchange will be required to begin Scope 1 and 2 GHG emissions disclosures for reporting periods beginning from January 1, 2025. LargeCap issuers – those included in the Hang Seng Composite LargeCap Index, which account for 80% of the HSCI composite’s market capitalization – and other Main Board issuers will also be required to provide other disclosures, including reporting on Scope 3 value chain emissions on a comply-or explain basis starting in 2025, with LargeCap issuers to be required to provide these disclosures on a mandatory basis the following year. Small and mid-size “GEM” issuers will be able to provide disclosure other than Scope 1 and 2 emissions on a voluntary basis.”
This adds another regulator to the growing list of IFRS-aligned jurisdictions. The IFRS brought some standardization to mandatory sustainability reporting and is becoming popular among those who view reporting through a traditional financial materiality lens. The UK, Australia, Canada, Japan, New Zealand, and Singapore are jurisdictions working to align national disclosure laws to the IFRS standards. Seeing the playing field shrink is welcome news for many who have long been frustrated by the sheer quantity of disclosure standards that were available. In developing their standards, the IFRS absorbed many of these groups like the TCFD and SASB. Now the largest rift remaining in sustainability disclosures is between traditional financial materiality as championed by the IFRS and double materiality which has been promoted by the EU and GRI.
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