Hong Kong’s sustainability disclosure laws regulations moved closer to implementation with new exposure drafts published recently by the Hong Kong Institute of Certified Public Accountants (HKICPA). The Hong Kong Stock Exchange (HKEX) previously adopted similar standards for listed issuers, but the new publication would apply to all companies subject to Hong Kong regulatory jurisdiction even if they are not listed on the HKEX. ESG Today writes of the development stating:
“The HKICPA said that it has proposed to fully converge its new standards, HKFRS S1 and HKFRS S2, with IFRS S1 and IFRS S2, after considering a series of factors including extensive engagements with stakeholders and the completion of a technical feasibility study on the application of the ISSB Standards in Hong Kong in June 2024. The institute stated that it believes that the full convergence ‘would bolster the connection of global capital with local businesses as well as those in Mainland China and other regions.’”
Jurisdictions that pledged to align with the IFRS are now taking concrete steps to do so. We also recently saw Australia pass its IFRS-aligned mandatory climate disclosure legislation. There has been some concern that jurisdictions would stray from the IFRS standards in their implementation, making comparability difficult for investors, but both Hong Kong and Australia are aiming for full alignment. The IFRS standards continue to be popular globally and are expected to continue to proliferate over the next several years. Hong Kong’s new standards are slated to become effective in August 2025.
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