Hong Kong’s enhanced climate-disclosure requirements took effect for financial years beginning on or after January 1, 2025. The rules sit in Part D of the HKEX Environmental, Social and Governance Reporting Code and are based on IFRS S2.
In 2026, the level of obligation depends on the issuer’s board and index status. All issuers have mandatory Scope 1 and Scope 2 requirements, while Hang Seng Composite LargeCap Index constituents enter the fully mandatory tier for the broader climate disclosures.
The requirements are phased by issuer group
For financial years beginning on or after January 1, 2025:
- All listed issuers must disclose Scope 1 and Scope 2 greenhouse gas emissions.
- Main Board issuers must address the other Part D climate requirements on a comply-or-explain basis.
- GEM issuers may report the other Part D requirements voluntarily.
For financial years beginning on or after January 1, 2026, Hang Seng Composite LargeCap Index constituents must comply with all Part D climate requirements on a mandatory basis. Under the HKEX provisions, an issuer that enters the mandatory tier remains subject to it even if it later ceases to be a LargeCap Index constituent.
Reporting teams should preserve the index-status evidence used for classification and obtain advice on unusual listing or group structures.
Part D is broader than a GHG inventory
The HKEX climate provisions use the same core architecture as IFRS S2: governance, strategy, risk management, and metrics and targets. They include climate resilience, effects on business model and value chain, transition plans where an issuer has one, climate-related targets, Scope 1, Scope 2, and Scope 3 emissions, and relevant industry metrics.
A mature inventory is necessary but not sufficient. Owners from finance, risk, strategy, operations, procurement, legal, and sustainability must work from consistent assumptions and reporting boundaries.
Start with a cross-reference to the ISSB reporting framework, then tag each item as mandatory, comply-or-explain, voluntary, or subject to a relief for the issuer’s specific year.
Relief must be supported, not assumed
The Code includes implementation relief for certain disclosures. For example, an issuer can use reasonable and supportable information available without undue cost or effort for specified requirements, including aspects of value-chain and Scope 3 work.
That test requires a decision process. Record the data considered, the capabilities and resources available, why additional work would create undue cost or effort, who approved the conclusion, and how the issuer plans to improve. A blank disclosure with no analysis is not a controlled use of relief.
Similarly, comply-or-explain reporting requires a considered explanation. The issuer should identify the requirement, explain why it has not complied, and describe any relevant plan and timetable.
HKFRS Sustainability Disclosure Standards are related but distinct
The Hong Kong Institute of Certified Public Accountants issued HKFRS S1 and HKFRS S2 in December 2024, effective August 1, 2025. They are fully aligned with IFRS S1 and IFRS S2.
The standards form part of Hong Kong’s broader sustainability-reporting pathway, but their issuance did not automatically mandate them for every entity. HKEX-listed issuers should follow the Listing Rules and ESG Code that apply to them, while monitoring further regulatory adoption of HKFRS Sustainability Disclosure Standards.
Four controls to establish during 2026
- Issuer classification: record board, index status, financial year, and the resulting disclosure basis.
- Disclosure ownership: assign every narrative and metric to a preparer, reviewer, evidence source, and due date.
- GHG traceability: reconcile the organizational boundary and preserve source evidence, methods, estimates, and factor versions.
- Relief governance: use a formal approval template for comply-or-explain decisions and undue-cost-or-effort relief.
Independent assurance is encouraged but not generally mandatory under the current HKEX climate provisions. Issuers should still design disclosures for review and consider an assurance-readiness assessment before seeking a public assurance conclusion.
Information in this article was verified on August 9, 2026. HKEX rules and related Hong Kong standards may change. This overview is general information, not legal advice.
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