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HKEX adopts new climate disclosure rules for transparency

08 July 2024

Douwe Muller, Associate, and Cristian Echavarria Quiroga, Principal

The Stock Exchange of Hong Kong Limited (“the exchange”), a subsidiary of Hong Kong Exchanges and Clearing Limited (“HKEX”), has adopted the new climate requirements (“the requirements”) proposals on the enhancement of climate-related disclosures into law under its environmental, social, and governance reporting code (“ESG code”) on Friday, April 19 2024.


The exchange published implementation guidance to assist issuers’ compliance. It sets out work processes divided into five chapters:

  1. Key concepts for preparing climate disclosures: Issuers are strongly encouraged to prepare climate-related disclosures under Part D of the ESG Code following the conceptual foundations and general requirements (“key concepts”) set out under IFRS S1. Examples of key concepts are quality of information, materiality, and estimates and errors.
  2. Governance: Issuers must now disclose who is responsible for overseeing climate-related risks and opportunities. This includes detailing management's role in governance processes, controls, and procedures.
  3. Strategy: The requirements build on the existing ESG Reporting Guide by mandating that issuers consider the different types of climate-related risks and opportunities. Issuers must provide assessments for short-, medium-, and long-term impacts on their business operations, models, strategy transition plans, climate-related targets, climate resilience, and related financial effects.
  4. Risk management: While the ESG Reporting Guide does not specify climate risk management processes, the requirements do. Issuers must disclose how they identify, assess, monitor, and manage climate-related risks and opportunities.
  5. Metrics and targets: Unlike the ESG Reporting Guide's "comply or explain" approach, the requirements mandate disclosure of Scope 1 (direct), Scope 2 (purchased electricity), and, for certain issuers, Scope 3 (value chain) greenhouse gas emissions. Issuers must also disclose cross-industry climate metrics, the internal carbon price per metric tonne of GHG emissions, and the linkage of executive remuneration to climate considerations.

The recommended workflow is outlined in eight steps for monitoring and managing climate-related risks and opportunities and reporting:

  1. Determine suitable governance structure
  2. Identify the effects posed by material climate-related risks and opportunities on the business
  3. Incorporate climate-related risks and opportunities into planning and business strategies
  4. Select suitable scenarios and parameters under a confirmed scope and boundary
  5. Assess the financial effects of climate-related risks and opportunities
  6. Implement actions and targets and provide information on the effects of climate-related risks and opportunities on its strategy and decision-making
  7. Identify management processes to prioritise, manage and monitor climate-related risks and opportunities
  8. Develop specific metrics and indicators to monitor climate-related risks and opportunities

The adoption of the new requirements of mandatory climate-related disclosures by the HKEX is an important step towards ESG and sustainability reporting in Hong Kong. By i) aligning to the ISSB-IFRS S2, ii) offering guidance and iii) introducing a phased implementation, HKEX guarantees transparency and consistency for publicly listed companies.

How can we help?  

We offer a broad range of ESG and Sustainability services for public and private market investors, covering modules for all five work processes and eight workflow steps.

For more information on our ESG products and services related to the requirements, please: