(17 August 2023 – Hong Kong) Hong Kong Stock Exchange's (HKEX) proposed issuer environment, social and governance (ESG) requirements will purportedly be the most stringent climate disclosures in Asia according to Morningstar.
HKEX proposed new climate-related disclosures in Q2 2023 aligned with the International Sustainability Standards Board (ISSB) Climate Standard set to become mandatory in 2024. Hong Kong’s push for more transparent climate disclosures is reflective of the increasingly strict ESG and sustainability rules coming to hand across the Asia Pacific region. Climate risks are classified broadly into physical risks to assets from climate hazards and risks associated with transitioning to a low-carbon economy.
“These new rules represent a significant upgrade from the current comply or explain status of mandatory reporting and mark a key step towards alignment not only with the International Sustainability Standards Board Climate Standard but also with the UK Financial Stability Board’s Task Force on Climate-related Financial Disclosures by 2025” commented Morningstar Sustainability Research Analyst, Boya Wang.
“As a result, a range of climate-related metrics will be subject to disclosure, such as Scope 3 greenhouse gas emissions, cross-industry metrics and internal carbon price. The Singapore stock has also been gradually expanding the list of mandatory requirements for issuers, although these are less demanding than the new rules from HKEX” Wang added.