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Hong Kong’s listed firms set for more climate risk reporting, with roll out of new consolidated ISSB standards on the horizon
- Hong Kong’s securities watchdog and bourse operator HKEX support new standards, which are expected to become mandatory for listed firms
- New standards will bring more standardisation, which will lead to more comparability, KPMG China executive says
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Financial executives at listed companies in Hong Kong should brace themselves for more climate risk reporting duties, with a new set of international standards expected as soon as next year.
The International Sustainability Standards Board (ISSB), a new body set up late last year to consolidate various standards for environmental, social and governance (ESG) reporting, is conducting public consultations on its proposed standards until July 29. These standards are expected to be finalised by year-end.
Hong Kong’s Securities and Futures Commission and bourse operator Hong Kong Exchanges and Clearing have indicated their support for these standards, which are expected to become mandatory for listed firms. One set of standards is for climate risks and opportunities, with another for general sustainability-related reporting.
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“The ISSB’s expected set of standards is a watershed moment for ESG simply because it elevates the level of expectations,” said Pat Woo, head of ESG Hong Kong at accounting and consulting firm KPMG China. “These new standards will bring more standardisation, which will lead to more comparability.”
A key challenge for listed firms is a proposed requirement to conduct scenario analysis on climate risks and opportunities. This proposal comes as parts of Spain, Italy, Japan, India, Pakistan and China suffered from earlier than normal heatwaves this year. Extreme floods have also hit eastern Australia and South Africa.
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