The Securities and Futures Commission (SFC) announces its support for the public consultation issued today by the Stock Exchange of Hong Kong Limited (SEHK) on proposed climate-related reporting requirements for listed companies in Hong Kong. The consultation is a major step towards aligning Hong Kong with the global baseline for climate-related reporting standards to be published by the International Sustainability Standards Board (ISSB) (Note 1).

“Hong Kong’s early adoption of climate-related corporate reporting requirements will consolidate its position as a leading green and sustainable finance hub within the region and globally,” said Ms Julia Leung, the SFC’s Chief Executive Officer. “We have been working closely with SEHK to adopt a balanced approach which aims to provide appropriate flexibility for listed companies whilst promoting relevant, consistent and comparable disclosures to investors.”

SEHK’s proposals make reference to the ISSB’s exposure drafts for sustainability-related disclosures and its further deliberation decisions, and are aligned with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) (Note 2). This is consistent with the objective set out by the Green and Sustainable Finance Cross-Agency Steering Group (Note 3), co-chaired by the SFC and the Hong Kong Monetary Authority (HKMA), to mandate disclosures aligned with the TCFD recommendations no later than 2025.

The SFC encourages interested parties to submit comments to SEHK by 14 July 2023.

Notes:

1. 1.The ISSB was established by the International Financial Reporting Standards Foundation in November 2021 to develop standards which will result in a comprehensive global baseline of sustainability disclosures. The ISSB published the exposure drafts of IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures in 2022 and expects to issue the IFRS Sustainability Disclosure Standards later this year.
2. 3.The TCFD was created in 2015 by the Financial Stability Board to develop consistent climate-related financial risk disclosures.  
3. 4.Established in May 2020, the Steering Group aims to co-ordinate the management of climate and environmental risks to the financial sector, accelerate the growth of green and sustainable finance in Hong Kong and support the Government’s climate strategies. In addition to the SFC and HKMA, its members include the Financial Services and the Treasury Bureau, Environment and Ecology Bureau, Hong Kong Exchanges and Clearing Limited, Insurance Authority and the Mandatory Provident Fund Schemes Authority.