• HKICPA has published Exposure Drafts for public comment on HKFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and HKFRS S2 Climate-related Disclosures.
• These standards will apply to publicly accountable entities, including listed companies and regulated financial institutions, to achieve global sustainability reporting consistency.

The Hong Kong Institute of Certified Public Accountants (HKICPA) has published the Exposure Drafts for HKFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and HKFRS S2 Climate-related Disclosures, also known as the HKFRS Sustainability Disclosure Standards, for public comment.

The comment period closes on 27 October 2024.

HKICPA proposes to fully converge HKFRS S1 and S2 with the IFRS S1 and S2 Standards issued by the International Sustainability Standards Board (ISSB) with an effective date of 1 August 2025.

This decision was made after a thorough review of local and global trends and extensive input from a wide range of stakeholders over the past few years. The process started with the release of the ISSB draft standards in 2022 and concluded with a technical feasibility study on the applicability of these standards in Hong Kong in June 2024.

The Institute thinks that converging with ISSB will connect global capital markets to local businesses, including those in Mainland China and other regions.

According to the Government’s Vision Statement “Turning Obligations into Opportunities in Developing the Sustainability Disclosure Ecosystem in Hong Kong”, HKFRS S1 and S2 will apply to publicly accountable entities, i.e. listed companies and regulated financial institutions in Hong Kong.

Roy Leung, HKICPA President, said: “The issuance of Exposure Drafts of HKFRS Sustainability Disclosure Standards marks a significant leap forward for Hong Kong’s sustainability disclosure landscape. This demonstrates the Institute’s unwavering commitment to supporting the sustainable development of Hong Kong.

“HKFRS S1 and S2 are crucial in aligning Hong Kong's sustainability reporting with the global baseline. By enhancing consistency and comparability, these standards will better meet the needs of investors seeking reliable sustainability information.”

As the authority on sustainability disclosure in Hong Kong, HKICPA will work with the Government, financial regulators and other key stakeholders to make Hong Kong one of the first to adopt the ISSB Standards. The Institute will continue to build local capability in sustainability reporting as per the Government’s Vision Statement to create a sustainability disclosure ecosystem in Hong Kong.

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Source: HKICPA