Hong Kong's climate disclosure rules: what finance leaders need to do now

For issuers with a December year-end, Hong Kong's largest listed companies are nine months into their first year of mandatory climate reporting. Issuers that were Hang Seng Composite LargeCap Index constituents throughout 2025 must report against HKEX's climate requirements on a mandatory basis for financial years starting on or after 1 January 2026.¹ Their first reports will be published in 2027.

The requirements are built on IFRS S2, the climate standard issued by the International Sustainability Standards Board (ISSB).² That matters to CFOs because several of the new disclosures are financial numbers: how much of the business is exposed to climate risk, and how much is positioned to benefit from the transition.³

LargeCap issuers now report on a mandatory basis, with limited reliefs

HKEX is phasing the rules in. For financial years starting on or after 1 January 2025, every listed issuer must disclose Scope 1 and Scope 2 greenhouse gas emissions. Main Board issuers report the remaining requirements on a comply-or-explain basis, and GEM issuers may disclose them voluntarily.⁴ For financial years starting on or after 1 January 2026, LargeCap issuers must report all of the climate requirements, including Scope 3 emissions.⁵

Mandatory reporting comes with four limited reliefs.⁶ Reasonable information relief, which also covers Scope 3, allows disclosure based on information available without undue cost or effort. Capabilities relief applies to scenario analysis and anticipated financial effects. There is also a commercial sensitivity relief, and a financial effects relief that allows qualitative rather than quantitative disclosure where certain conditions are met. Issuers using a relief are encouraged to disclose their work plan, progress and timetable for making the full disclosure.⁷

The obligation is one-way. Once an issuer is subject to mandatory disclosure, it must keep reporting under the requirements even if it later leaves the index.⁸

Full ISSB reporting is expected from 2028

Climate-only reporting under the Listing Rules is an interim step. The Hong Kong Government's Roadmap, published in December 2024, sets out how large publicly accountable entities (PAEs) will fully adopt the ISSB Standards no later than 2028.⁹ The HKICPA published HKFRS S1 and S2 on 12 December 2024. They are fully aligned with the ISSB Standards and have been available for voluntary use since 1 August 2025.¹⁰

For listed companies, HKEX will consult in 2027 on mandating reporting under HKFRS S1 and S2, with an expected effective date of 1 January 2028.¹¹ The consultation will consider phasing the requirement in, starting with more advanced issuers such as LargeCap issuers. It will also ask whether to mandate assurance for all or part of the disclosures.¹² For LargeCap issuers, that means a likely move from climate-only reporting to full sustainability reporting, possibly assured.

For unlisted entities, the scope is narrower. The Roadmap covers non-listed financial institutions carrying significant weight, which are expected to apply HKFRS S1 and S2 no later than 2028.¹³ The HKMA, SFC, Insurance Authority and MPFA will each consult on their own approach and timing.¹⁴

The metrics need finance data

The requirements follow IFRS S2's four pillars: governance, strategy, risk management, and metrics and targets.¹⁵ The metrics are where finance teams will feel it most.

Issuers must disclose the amount and percentage of assets or business activities vulnerable to physical and transition risks, and the amount and percentage aligned with climate-related opportunities.¹⁶ Those figures come from fixed asset registers, revenue data and capital plans. A sustainability team can't produce them alone.

Scope 3 disclosure is spreading, but little of it is assured

The HKICPA reviewed the reports of all 105 LargeCap constituents for the 2024/2025 reporting period, as published by 1 July 2025: the last reports published before the new rules took effect.¹⁷ Of these, 69 (66%) reported Scope 3 emissions to some extent. HKEX's review of the previous year's reports found 50%.¹⁸

Assurance lags well behind. 69 companies obtained external assurance over some or all of their emissions data, but only 17 of them extended it to Scope 3.¹⁹ That is about 16% of the index.

Coverage is uneven too. Among companies disclosing Scope 3, business travel (72%) and purchased goods and services (69%) were the most reported categories, while use of sold products was reported by 30%.²⁰ Respondents to HKEX's consultation noted that Scope 3 often makes up a large share of a company's emissions.²¹ HKEX links the low downstream reporting rates to companies' limited visibility and control over how customers use and dispose of their products.²²

The wider market is further behind. HKEX's November 2024 review of all listed issuers' latest ESG reports found 96% reported Scope 1 and 2 emissions, but only 37.4% reported Scope 3. Among LargeCap issuers, 80% had carried out climate scenario analysis.²³

Hong Kong is part of a regional move to one baseline

As of 22 July 2026, 35 jurisdictions had adopted the ISSB Standards on a voluntary or mandatory basis, and a further 11 planned to.²⁴ In the Philippines, the SEC has adopted PFRS S1 and S2, and the largest listed companies report from 2027 on financial years starting on or after 1 January 2026.²⁵

Mainland China issued a Basic Standard converging with the ISSB Standards in 2024 and its first climate standard in December 2025. It aims to have a unified national system substantially in place by 2030.²⁶ ²⁷

For groups reporting in several markets, this convergence helps. One well-governed climate dataset can increasingly serve several regulators.

Climate data needs the same discipline as the accounts

Climate data now sits in a regulated disclosure, read by the same investors who read your accounts. It needs clear ownership, documented methodologies and numbers that reconcile back to source.

With about one in six LargeCap issuers assuring any Scope 3 data, and HKEX due to consult on mandatory assurance in 2027, most companies have work to do.

Practical steps for finance and sustainability teams

1. Confirm your tier, and remember it is one-way. Mandatory reporting for FY2026 applies to issuers that were LargeCap constituents throughout FY2025. A company that joins the index later picks up the obligation. One that leaves keeps it.
2. Treat Scope 3 as a data project. Identify the categories that drive most of your footprint and start collecting supplier data for those first. A complete picture of a few material categories is more useful than thin coverage of all fifteen.
3. Document any relief you rely on. Record why it applies, set a dated plan to close the gap, and disclose the plan alongside the report.
4. Apply financial-grade controls to climate data. Assign an owner to each metric, document how it is calculated and build in review before sign-off. That work makes external assurance far easier when it comes.
5. Link climate risk to planning. Disclosures on vulnerable assets and climate-related opportunities need input from FP&A and capital planning. Scenario analysis belongs in the forecasting process, run by the same people.
6. Bring sustainability and financial reporting into one process. Platforms such as Workiva let teams prepare ESG and financial disclosures together, using shared data with a full audit trail.
7. Plan for 2028 now. LargeCap issuers should expect full HKFRS S1 and S2 reporting to follow, subject to the 2027 consultation. Significant unlisted financial institutions face the same deadline through their regulators. The data and controls behind these disclosures take time to build.

Final thoughts

Hong Kong has moved from voluntary ESG narrative to climate reporting that investors will read alongside financial results, and full sustainability reporting is likely to follow from 2028.

Companies that bring finance in early, and run climate data through the same processes as the rest of their reporting, will find the 2027 reporting season much easier.

VantagePoint helps finance and sustainability teams build sustainability reporting into their reporting cycle. To talk through what the new requirements mean for your business, book a call with our team.

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Sources

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