Hong Kong's Climate Disclosure Rules: What You Need to Know

Hong Kong climate disclosure at a glance

On 19 April 2024, Hong Kong Exchanges and Clearing Limited (HKEX) finalised new climate disclosure requirements for listed companies, aligned with IFRS S2 and effective for financial years (FY) commencing on or after 1 January 2025. The new requirements form Part D of the Environmental, Social and Governance Reporting Code, which sits in Appendix C2 of the Listing Rules.

Hong Kong is among the first major Asian markets to embed International Sustainability Standards Board (ISSB)-aligned climate disclosures into listing rules, with mandatory Part D reporting phased in for Hang Seng Composite LargeCap Index constituents from FY2026 and a government roadmap extending the HKFRS Sustainability Disclosure Standards to all publicly accountable entities by 2028.

Here's what you need to know.

What Hong Kong's climate disclosure rules require

Hong Kong's climate disclosure regime runs in two layers: a listing-rule layer in force today for listed companies, and a broader accounting-standard layer that extends to a wider population by 2028.

• HKEX Appendix C2, Part D, the listing-rule layer (mandatory today). Part D sits within the ESG Reporting Code and covers climate disclosures only, aligned with IFRS S2 across four pillars: governance, strategy, risk management, and metrics and targets. Listed companies must comply with Part D to remain in good standing on the exchange. Bolded and italicised terms in Part D carry the meaning given in Appendix A of IFRS S2.

• HKFRS S1 and HKFRS S2, the accounting-standard layer (voluntary today, mandatory by 2028). The Hong Kong Institute of Certified Public Accountants (HKICPA) published the two standards on 12 December 2024. HKFRS S1 covers general sustainability disclosure across all sustainability-related risks and opportunities; HKFRS S2 covers climate specifically. Both are fully aligned with the ISSB's global baseline and take effect for reporting periods beginning on or after 1 August 2025. The cross-government Roadmap extends mandatory adoption to all listed and significant publicly accountable entities by 2028.

• GHG Protocol as the measurement standard. Scope 1, Scope 2, and Scope 3 emissions are measured in accordance with the GHG Protocol Corporate Accounting and Reporting Standard (2004), mandated by IFRS S2 paragraph 29(a)(ii) and incorporated by reference into Part D

The Exchange's reasonable information relief allows disclosures based on reasonable and supportable information available at the reporting date, with separate transition relief for Scope 3 in early reporting cycles.

Who is in scope

Three tiers of listed company carry different obligations under Part D, and the Financial Services and the Treasury Bureau (FSTB) Roadmap extends coverage to non-listed publicly accountable entities by 2028.

Main Board companies (comply-or-explain)

All Main Board companies report against Part D on a comply-or-explain basis for financial years commencing on or after 1 January 2025. Scope 1 and Scope 2 emissions are mandatory regardless of explanation; for the rest of Part D, companies either comply or explain non-compliance.

LargeCap companies (mandatory)

Hang Seng Composite LargeCap Index (HSCLI) constituents, defined as companies in the LargeCap Index throughout the year immediately prior to the reporting year, report against full Part D, including Scope 3, on a mandatory basis for FY commencing on or after 1 January 2026.

GEM companies (voluntary on Part D, mandatory on Scope 1 and 2)

GEM companies report against Part D voluntarily from FY commencing 1 January 2025. Scope 1 and Scope 2 disclosure carries the same mandatory obligation as Main Board from that date.

Supply-chain reach. Mandatory Scope 3 disclosure for LargeCap companies from FY2026 reaches into supplier networks across Mainland China, Southeast Asia, and global procurement. Suppliers selling to or buying from LargeCap constituents can expect to receive Scope 3 data requests even when they are not themselves in scope.

Note on publicly accountable entities. The Roadmap, co-published with the Securities and Futures Commission on 10 December 2024, extends adoption of the full HKFRS Sustainability Disclosure Standards to all publicly accountable entities (PAEs), including non-listed banks, insurers, securities brokers, mutual funds, and investment banks, no later than 2028. The Exchange will consult in 2027 on mandating HKFRS S1 and HKFRS S2 for listed PAEs from 1 January 2028.

Key dates and milestones

The CNBV has set out a phased implementation timeline that progressively raises the bar for disclosure quality and scope:

Why this matters beyond Hong Kong

Hong Kong's regime is one of the earliest IFRS S2-aligned listing-rule implementations in the world, and its reach extends well beyond the 2,686 companies listed on the exchange as of 31 December 2025.

1. Supply-chain ripple across Mainland China and Asia. Mandatory Scope 3 reporting for LargeCap companies from FY2026 reaches into Mainland China suppliers, Southeast Asian manufacturing partners, and global commodity sources, pulling those suppliers into IFRS S2 disclosure practice before their home regulators mandate it.

2. Regional convergence under the ISSB baseline. Hong Kong joins Singapore, Australia, and Japan in adopting ISSB-aligned mandatory disclosure across Asia-Pacific. The Exchange's listing-rule route sets a template for other Asian exchanges considering similar implementations.

3. Capital-markets positioning. International investors allocating to Hong Kong-listed equities have a standardised, IFRS S2-aligned data set for climate-related risk assessment from FY2025 disclosures onward, supporting index inclusion, sustainability-linked financing, and inbound capital allocation against the LargeCap peer benchmark.

How companies should prepare

Hong Kong's phased timeline gives Main Board companies one cycle to move from comply-or-explain to full disclosure, and LargeCap companies a tight window to bring Scope 3 into mandatory cycles.

• Establish your greenhouse gas inventory across Scope 1, 2, and 3. Build emissions accounting on the GHG Protocol Corporate Accounting and Reporting Standard (2004), mandated by IFRS S2 paragraph 29(a)(ii). For LargeCap companies, the Scope 3 deadline of FY2026 means data architecture, supplier engagement, and category boundaries need to be in place before that financial year begins.

• Map your value-chain exposure to in-scope listed companies. Counterparties selling to or buying from LargeCap constituents can expect to receive Scope 3 data requests from FY2026. Prepare to deliver category-level Scope 3 data through standardised inventories.

• Build assurance-ready processes early. The Exchange encourages independent assurance referencing ISAE 3000, and the Roadmap signals mandatory assurance for listed publicly accountable entities. Audit-ready trails built for FY2025 disclosures avoid retrofitting under deadline pressure.

• Build on the frameworks you already use. Existing Task Force on Climate-related Financial Disclosures (TCFD) alignments, GHG Protocol inventories, and CDP submissions carry forward into IFRS S2 readiness with limited rework.

How Terrascope can help

Terrascope's AI-powered platform helps Hong Kong-listed companies move from baseline emissions data to audit-ready disclosures, including Vitasoy, the HKEX-listed beverage manufacturer that turned local sourcing into a competitive advantage while preparing for mandatory sustainability reporting across its Hong Kong and Australian operations.

• Scope 1, 2, and 3 emissions measurement. Integrations pipe energy data, fuel records, procurement spend, and supplier-level data into a GHG Protocol-aligned inventory, with full traceability from source system to disclosed figure.

• Audit-ready reporting. The audit trail captures methodology, emission factor selections, and version history for every emission category, with role-based viewer access.

• Supply-chain intelligence. Analytics surface category-level Scope 3 hotspots across business units, countries and supplier networks, identifying where supplier engagement moves the disclosed number most.

• Multi-framework alignment. Terrascope's Climate Reporting feature produces an IFRS S2-aligned narrative across the 91 IFRS S2 disclosure requirements, with parallel mapping to TCFD and Appendix C2 Part D.

Frequently asked questions

Need to get ahead of Hong Kong's reporting requirements? Speak to a Terrascope expert today.