New HKEX Climate Disclosure Requirements Announced: What It Means for You
The Hong Kong Stock Exchange (HKEX) will introduce new climate disclosures on January 1, 2025. This widely expected change aligns with a broader global movement towards more comprehensive reporting on environmental, social, and governance (ESG) factors, reflecting the increasing importance of these considerations in the business world.
At InCorp, we believe the HKEX climate disclosure requirements is a significant development for Hong Kong businesses listed on the stock exchange. While some organisations might view this as an obstacle, we see it as an opportunity for HKEX-listed companies to stand out in a global market that increasingly values ESG considerations. By following these internationally recognised practices, businesses can appeal to investors worldwide, reduce risks related to climate change, and become leaders in their industries.
The shift will demand careful work, but the HKEX has provided helpful information for those in the market to manage the changes effectively. This article analyses the main changes, what they mean for businesses, and how companies can use these requirements to build long-term value and stability.
Overview of HKEX’s New Climate Requirements
The new HKEX climate disclosure requirements mark a substantial shift in Hong Kong’s financial market practices, bringing them in line with global sustainability standards. These changes, based on the IFRS Sustainability Disclosure Standards, particularly IFRS S1 and S2, will elevate Hong Kong’s reporting practices to match international norms.
The updated framework focuses on four key pillars:
- Governance
- Strategy
- Risk Management
- Metrics and Targets
These pillars create a comprehensive system for climate-related reporting, moving beyond the current “comply or explain” model for some disclosures to a more stringent, mandatory framework for certain companies.
A significant change is the requirement for all listed issuers to disclose their Scope 1 and Scope 2 greenhouse gas emissions. Again, this shifts from the previous “comply or explain” stance to mandatory disclosure for these emissions categories.
The HKEX designed these requirements to boost transparency and comparability in climate-related disclosures. This change aims to equip investors with more consistent and reliable information about companies’ climate risks and potential benefits.
For businesses, these new requirements will require a more thorough method of understanding and reporting their climate impact. While this may initially prove to be demanding, it also allows companies to refine their risk management processes and showcase their commitment to sustainability.
The HKEX’s strategy, which includes a phased implementation and various relief measures, indicates an understanding of the potential hurdles companies might face. This balanced plan aims to encourage thorough reporting while providing businesses with the time and support needed to adjust to the new standards.
Key Components of the New HKEX Climate Disclosure Requirements: In Detail
The new HKEX climate disclosure requirements encompass four core pillars, each addressing a crucial aspect of climate-related business practices. Here’s a breakdown of what companies need to report under each pillar:
1. Governance
Companies must disclose their governance processes, controls, and procedures for monitoring, managing, and overseeing climate-related risks and opportunities. This includes:
- Board oversight of climate-related issues
- Management’s role in assessing and managing climate-related risks and opportunities
- Integration of climate considerations into overall risk management
2. Strategy
Businesses need to outline their strategy for managing climate-related risks and opportunities. Key disclosures include:
- Climate-related risks and opportunities that could affect cash flows, access to finance, or cost of capital over short, medium, and long terms
- Impact of climate-related issues on business model, strategy, and financial planning
- Resilience of the company’s strategy under different climate-related scenarios
3. Risk Management
Companies must detail their processes for identifying, assessing, and managing climate-related risks. This covers:
- Procedures for identifying and assessing climate-related risks
- Integration of climate risk management into overall risk management
- Processes for prioritising climate-related risks
4. Metrics and Targets
HKEX-listed firms need to disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities. This includes:
- Scope 1 and Scope 2 greenhouse gas (GHG) emissions (mandatory for all issuers)
- Scope 3 GHG emissions (where relevant)
- Identify which company assets and activities are most exposed to climate change impacts (like extreme weather or changing regulations) and what percentage this represents.
- Identify which company assets and activities could benefit from the transition to a low-carbon economy (like new technologies or markets) and what percentage this represents.
- Disclose how your company is investing to address climate risks and capitalise on climate-related opportunities.
- Report on your company’s progress towards any climate goals it has set or is required to meet.
Read more: How To Launch An IPO in Hong Kong
HKEX Climate Disclosure Requirements: Summary of Priorities
| Pillar | Main Requirements | Key Benefits | Implementation Priority |
| Governance |
• Board oversight mechanisms • Management responsibilities • Control systems |
Better oversight and accountability | High – Foundation for other pillars |
| Strategy |
• Financial impact assessment • Business model evaluation • Scenario planning |
Improved strategic planning | High – Critical for long-term value |
| Risk Management |
• Risk identification processes • Assessment methods • Prioritisation systems |
Enhanced risk mitigation | Medium – Build on existing systems |
| Metrics & Targets |
• GHG emissions tracking • Target setting • Performance monitoring |
Measurable progress tracking | Medium – Data collection first |
These new requirements signify a major shift in corporate reporting practices. First and foremost, they demand a more comprehensive and structured method of assessing and disclosing climate-related information. For many companies, this will require significant changes to their data collection, analysis, and reporting processes. While some very large organisations may be able to handle these changes in-house, others will likely find it advantageous to connect with an established ESG partner such as InCorp for rigorous planning and execution.
Ultimately though, these changes also present valuable benefits. By implementing these disclosure practices, companies can gain deeper insights into their climate-related risks and opportunities. This can lead to more informed decision-making, improved risk management, and potentially, the identification of new business opportunities related to climate change mitigation and adaptation.
Finally, these enhanced disclosures will provide investors with more comprehensive and comparable information about companies’ climate-related practices and risks. This increased transparency can help companies attract environmentally conscious investors and potentially lower their cost of capital.
Phased Implementation Timeline
HKEX has structured a clear timeline for different categories of listed companies. This tiered system recognises that companies will need varying levels of preparation time based on their size and resources.
Implementation Timeline by Company Category
| Company Type | Disclosure on Scope 1 and 2 GHG emissions | Disclosure other than Scope 1 and 2 GHG emissions |
| LargeCap Issuers* | Mandatory disclosure (Financial years starting 1 January 2025) | “Comply or explain” for FY2025; Mandatory disclosure for FY2026 |
| Main Board Issuers (excluding LargeCap) | Mandatory disclosure (Financial years starting 1 January 2025) | “Comply or explain” (Financial years starting 1 January 2025) |
| GEM Issuers | Mandatory disclosure (Financial years starting 1 January 2025) | Voluntary disclosure (Financial years starting 1 January 2025) |
*LargeCap Issuers: Hang Seng Composite LargeCap Index constituents throughout their entire financial year 2025
Note: Once a company becomes subject to mandatory disclosure requirements, it must continue to comply even if it later ceases to be a LargeCap issuer.
Implementation Relief and Compliance Considerations
HKEX has introduced four types of relief measures to help companies meet the new climate disclosure requirements. These measures offer practical support while maintaining high reporting standards.
Implementation Relief Types and Their Applications
| Relief Type | Purpose | Application Examples |
| Reasonable Information | Allows use of available information without undue cost | Using existing data when new collection would be cost-prohibitive |
| Capabilities | Takes into account company skills and resources | Scaling requirements based on current technical expertise |
| Commercial Sensitivity | Protects sensitive information about opportunities | Limited exemption for non-public competitive data |
| Financial Effects | Permits qualitative instead of quantitative reporting | Allowing descriptive analysis where numerical data is unavailable |
Companies using these relief options must still provide:
- Clear explanations for non-disclosure
- Plans for future compliance
- Progress updates
- Implementation timelines
This balanced structure aims to maintain reporting quality while recognising practical business limitations. The HKEX expects companies to use these relief measures responsibly while working toward full compliance.
Making the Transition Work
The new HKEX climate disclosure requirements call for immediate action. Companies will benefit from reviewing their current practices, finding gaps in their reporting abilities, and building the right data processes well before the 2025 start date. Many organisations see value in working with established ESG specialists like InCorp, who bring:
- Deep knowledge of ESG reporting standards
- Methods for efficient data gathering
- Tools for analysing climate scenarios and risks
- Ways to strengthen internal controls
- Staff training programmes
The HKEX has published practical steps to help companies meet the new requirements. By combining these official resources with expert support, organisations can create lasting value through improved sustainability reporting while meeting compliance obligations.
Where to Next?
The HKEX climate disclosure requirements mark a defining moment for Hong Kong’s corporate sector. While some organisations may view these changes as a regulatory burden, the real opportunity lies in using these requirements to build a competitive advantage. Companies that respond strategically can attract global investors, reduce climate-related risks, and position themselves as market leaders.
Success, of course, requires methodical preparation, expert support, and clear execution. The right approach turns a compliance exercise into a chance to stand out on the global stage. Companies that act now gain the time to build solid foundations for both compliance and value creation.
InCorp’s ESG specialists work with companies to create practical climate reporting solutions that serve both regulatory needs and business objectives. Our Hong Kong team combines local market understanding with global best practices to support your climate disclosure journey. Contact us today to discuss how we can help your organisation meet these new requirements while capturing the strategic benefits they offer.
FAQs on HKEX Climate Disclosure Requirements
- The HKEX will require all listed companies to disclose Scope 1 and 2 greenhouse gas emissions from January 1, 2025. Additional climate-related disclosures covering governance, strategy, risk management, and metrics will be phased in based on company size and listing status.
- All HKEX-listed companies must report Scope 1 and 2 emissions from 2025. LargeCap issuers face additional mandatory requirements from 2026. Main Board companies (non-LargeCap) follow "comply or explain" rules, while GEM companies have voluntary reporting options.
- HKEX offers four types of implementation relief: reasonable information relief, capabilities relief, commercial sensitivity relief, and financial effects relief. These help companies manage reporting challenges while working toward full compliance.
- Companies should start preparing immediately for the 2025 requirements by reviewing current systems, identifying reporting gaps, and establishing data collection processes. Early preparation helps ensure smooth compliance and maximises business benefits.
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