Corporate sustainability disclosures
Integral to the growth of sustainable finance is the availability of sufficient, relevant and reliable information from financial and non-financial companies on the impact of climate-related risks and opportunities for business operations and strategies. Consistency and comparability of such information are necessary for informed pricing and can lead to increased investment in sustainable products and activities.
The SFC recognises that the International Sustainability Standards Board (ISSB) can set out a path forward, with its proposed climate standard forming a comprehensive global baseline for climate-related disclosures that will provide decision-useful information for investors.
In 2022, the SFC responded to the public consultation of the ISSB on its proposed standards for climate and sustainability disclosures. The SFC highlighted that the proposed standards represent significant progress towards global alignment and shared its high-level observations on the standards’ interoperability, phasing and scaling and the desirability of implementation guidance, with a view to maximising the breadth and pace of international implementation.
In April 2023, the SFC announced its support for the public consultation issued 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 ISSB.
Requirements for listed companies
Changes to the Rules Governing the Listing of Securities on the SEHK were introduced in 2019 to impose a number of mandatory environmental, social, and governance (ESG) disclosure requirements as well as other non-mandatory ESG disclosure requirements.
In November 2021, the SEHK published a Guidance on Climate Disclosures and an Analysis of IPO Applicants’ Corporate Governance and ESG Practice Disclosure in 2020/2021. The guidance helps companies assess their response to climate-related risks and assists issuers in preparing climate change reporting aligned with the Task Force on Climate-Related Financial Disclosures recommendations. The analysis found that most companies made ESG disclosures at their initial public offering. They should conduct a thorough analysis and assessment to identify material ESG risks, and consider making appropriate disclosures on climate-related issues and initiatives to reduce carbon emissions.
Last update: 9 Jun 2023