Recognising that businesses have a responsibility to operate in a sustainable and socially responsible manner, beyond just financial performance, the Hong Kong Exchanges and Clearing Limited’s (HKEx) Environmental, Social, and Governance (ESG) Reporting Guide aims to provide guidance and set standards for companies listed on the Hong Kong Stock Exchange to enhance their ESG performance and disclosure. The guide outlines a set of disclosure requirements, covering governance, emissions, resources consumption, labour rights, anti-corruption, product responsibility, etc.

Under the requirements of latest listing rules of HKEX, an issuer must publish its ESG report on an annual basis and regarding the same period covered in its annual report. An ESG report may be presented as information in the issuer’s annual report or in a separate report. Regardless of the format adopted, the ESG report must be published on the Exchange’s website and the issuer’s website.

In view of the increasing demands on ESG disclosure, HKEx has been updating the requirements since its initial version back in 2012, evolving the disclosure essence from “voluntary disclosure” to “comply or explain”, and to the recently proposed “mandatory disclosure” as stated in the latest consultation paper on the enhancement of climate disclosure released in Early 2023.

On 14 April 2023, HKEX published a consultation paper seeking market feedback on proposals to enhance climate-related disclosures under the ESG framework.

HKEX proposes to mandate all issuers to make climate-related disclosures in their ESG reports, and introduce new climate-related disclosures aligned with the International Sustainability Standards Board (ISSB) Climate Standard. With the proposed effective date of 1 January 2024, the interim provisions (shorter or simpler version) of certain disclosures are proposed for the first two reporting years following the effective day.

In view of the level of complication and the level of resources required to fully comply with the proposed disclosures on top of the current ESG Report publication, GreenCo recommends companies to get ready earlier by understanding what are the new requirements and what preliminary work has to be planned and done ahead.

Testimonials and Clients’ Recognition

GreenCo’s team possess good technical knowledge and project management skills. They deliver top quality work well within tight timeframe. They also have great communication with clients.

Sustainability Director, a famous Gaming company in Macau

GreenCo’s team is helpful and always provides prompt responses. They have demonstrated professionalism in sharing valuable insight in ESG development.

Corporate Communications Director, a well-known chain Food and Beverage company in Hong Kong

We appreciate the competence and professionalism GreenCo’s team demonstrated during the preparation and delivery of the workshop and the analysis.

Group HR and Communications Director, a well-established chemical manufacturing company originated from China

Key Proposed Changes

  • ESG Reporting Guide will be renamed as the ESG Reporting Code

  • A new Part D headed “Climate-related Disclosures” is added, which equals  80% of the length of the current ESG Reporting Guide

  • Upgrading from the “comply or explain” provision, the proposed ESG Code mandate all issuers to make climate-related disclosures in their ESG reports

  • The effective date of the new disclosure requirements is 1 January 2024 (i.e. ESG report for FY2024 shall comply with the new requirements)

  • Interim provisions are available for certain disclosures (financial effects of climate-related risks and opportunities, scope 3 emissions and certain cross-industry metrics) for a the first two reporting years following the effective date

  • Issuers have a two-year grace period and are expected to fully comply with all the new climate-related disclosures in financial years commencing on or after 1 January 2026 (i.e. the ESG Report for FY2026 must fully comply with all new requirements).

  • The new climate-related disclosures will be categorised under four core pillars: 1) Governance; 2)Strategy; 3) Risk management and 4)Metrics and targets

In view of:

  1. The level of complication and the level of resources required to fully comply with the proposed climate-related disclosure is much higher than the current ESG reporting framework;
  2. The nature of the proposed climate-related disclosures is mandatory, meaning that issuers are not possible to use general and brief explanations to fulfil the disclosure requirement as under the “comply or explain” provision; and
  3. Investors’ demand and stakeholders’ expectations of transparent and accountable disclosure are surging,

GreenCo suggests companies getting prepared as soon as possible.

What GreenCo Can Do for You

Attributed to our experience and professionalism, GreenCo can offer you the following services:

Disclaimer: This material has been simplified for understanding and is not exhaustive. This material cannot be relied upon to cover specific situations and the information in this material is not suggested to be used without obtaining specific professional advice. GreenCo and its directors, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance upon the information in this material or for any decision based on it.
For more information, please refer to the consultation paper published by the HKEX via:

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