Sustainability Reporting Requirements in Hong Kong

Last updated: May 28, 2026. Hong Kong sustainability reporting has moved from general ESG disclosure toward ISSB-aligned climate and sustainability reporting, but the rules are phased. The most important distinction is between HKEX-listed issuer requirements that already apply through the ESG Reporting Code and the broader Hong Kong Sustainability Disclosure Standards that are available for use but will only become mandatory when regulators require them.

Short answer: Hong Kong listed issuers must continue publishing annual ESG reports under HKEX Appendix C2. For financial years commencing on or after 1 January 2025, all listed issuers must disclose Scope 1 and Scope 2 greenhouse gas emissions on a mandatory basis. Main Board issuers must also report the new IFRS S2-aligned climate requirements on a comply-or-explain basis, while GEM issuers are encouraged to report them voluntarily. From financial years commencing on or after 1 January 2026, Hang Seng Composite LargeCap Index constituents must report the Climate Requirements on a mandatory basis. Separately, HKFRS S1 and HKFRS S2 were issued by the HKICPA and are fully aligned with IFRS S1 and IFRS S2, but they are voluntary unless and until a regulator mandates their use.

What changed in Hong Kong sustainability reporting?

Hong Kong has been upgrading its listed-company ESG reporting framework for several years. The current direction is clear: climate and sustainability disclosures are being pulled closer to international financial-reporting expectations, especially the International Sustainability Standards Board standards.

The main developments companies need to understand are:

HKEX renamed and upgraded the ESG framework into Appendix C2, the Environmental, Social and Governance Reporting Code;
new climate-related disclosure requirements were added under Part D of the ESG Code, developed with reference to IFRS S2 Climate-related Disclosures;
mandatory Scope 1 and Scope 2 greenhouse gas emissions disclosure applies to all listed issuers for financial years commencing on or after 1 January 2025;
LargeCap issuers face mandatory Climate Requirements from financial years commencing on or after 1 January 2026;
HKICPA issued HKFRS S1 and HKFRS S2 in December 2024, fully aligned with IFRS S1 and IFRS S2, with an effective date of 1 August 2025; and
the Hong Kong Government roadmap aims for large publicly accountable entities to fully adopt ISSB-aligned standards no later than 2028.

Who needs to report in Hong Kong?

The answer depends on what kind of entity you are.

HKEX-listed issuers

HKEX-listed issuers are the most directly affected today. They must publish an ESG report every year for the same period covered by the annual report. The ESG report can sit inside the annual report or be published as a separate report, but it must be published on the Exchange's website and the issuer's website. Where it is separate from the annual report, it must be published at the same time as the annual report.

From financial years commencing on or after 1 January 2025:

all Main Board and GEM issuers must disclose Scope 1 and Scope 2 greenhouse gas emissions on a mandatory basis;
Main Board issuers must report against the Climate Requirements in Part D of the ESG Code on a comply-or-explain basis; and
GEM issuers are encouraged to report against the Climate Requirements on a voluntary basis.

From financial years commencing on or after 1 January 2026, issuers that are Hang Seng Composite LargeCap Index constituents must report the Climate Requirements on a mandatory basis. These LargeCap issuers should treat 2025 as a transition year and 2026 as the first year in which the broader climate requirements are no longer merely comply-or-explain.

Large publicly accountable entities

The Government's roadmap says Hong Kong will prioritise the application of HKFRS Sustainability Disclosure Standards by large publicly accountable entities under a phased approach. HKEX is expected to consult the market in 2027 on mandating sustainability reporting against the Hong Kong Standards for listed publicly accountable entities, with an expected effective date of 1 January 2028 for the first batch of listed entities.

Relevant financial regulators are also expected to determine how and when significant non-listed financial institutions should apply the Hong Kong Standards, with a target for those institutions to apply the standards no later than 2028.

Private companies and suppliers

Most private companies are not automatically required to prepare a full HKEX-style ESG report or full HKFRS S1 and S2 sustainability disclosures. That said, private companies can still be asked for sustainability data by listed customers, banks, investors, landlords, public-sector buyers, or multinational enterprise clients.

For private companies, the practical question is usually not "do we need a full HKEX ESG report?" but "which sustainability data are our customers, lenders, investors, or procurement teams asking us to provide?" Common requests include Scope 1 and Scope 2 emissions, selected Scope 3 information, climate-risk policies, environmental management practices, workforce data, supplier due diligence, and evidence behind targets or claims.

HKEX ESG Code versus HKFRS S1 and S2

This is where many companies get confused. HKFRS S1 and HKFRS S2 exist, and they are fully aligned with IFRS S1 and IFRS S2. But the HKICPA is a standard setter. It does not, by itself, mandate which entities must apply the sustainability disclosure standards.

Until HKEX, HKMA, SFC, the Insurance Authority, MPFA, or another relevant regulator changes its own rules to require HKFRS S1 and S2, entities follow the rules that currently apply to them. For listed issuers, that means HKEX Listing Rules and Appendix C2, including the New Climate Requirements. For financial institutions, it means the current requirements of their sector regulator, plus any new adoption path introduced under the roadmap.

The distinction matters because the HKEX Climate Requirements are aligned with IFRS S2 but are not identical to applying full HKFRS S1 and S2. For example, HKICPA's FAQ highlights differences around reporting boundaries, industry-based metrics, separate Scope 1 and Scope 2 presentation for consolidated group and other investees, and remuneration disclosure linked to climate considerations.

What the Climate Requirements cover

HKEX's Climate Requirements follow the same broad architecture as IFRS S2: governance, strategy, risk management, and metrics and targets. In practice, listed issuers should be ready to explain:

how the board and management oversee climate-related risks and opportunities;
how climate-related risks and opportunities could affect the business model, strategy, cash flows, access to finance, or cost of capital;
how climate risks are identified, assessed, prioritised, monitored, and managed;
the company's Scope 1 and Scope 2 greenhouse gas emissions;
Scope 3 emissions categories where the relevant climate disclosure requirements apply and where information is material or required;
the methodology, inputs, assumptions, and reporting boundary used for greenhouse gas emissions calculations;
climate-related targets, including whether they cover Scope 1, Scope 2, or Scope 3 emissions; and
work plans, progress, and timetables where information is not yet disclosed under a comply-or-explain approach or where implementation relief is being used.

What should listed companies do now?

Listed companies should not treat the 2025 and 2026 changes as a simple wording update to the ESG report. The rules now require better governance, data discipline, and climate evidence. A practical preparation sequence is:

Confirm issuer category: Main Board, GEM, LargeCap, financial institution, or another regulated category.
Map reporting obligations: identify which parts of Appendix C2 are mandatory, comply-or-explain, voluntary, or expected to become mandatory later.
Set the reporting boundary: document which entities and operations are included in the ESG report and why.
Build the GHG inventory: calculate Scope 1 and Scope 2 emissions for mandatory disclosure and prepare Scope 3 categories where required or likely to be requested.
Connect climate and finance: involve finance early, especially where climate risks may affect cash flows, access to finance, cost of capital, impairment assumptions, asset lives, capex plans, or strategy.
Strengthen board oversight: document governance structure, management responsibility, escalation, review processes, and how the board tracks ESG goals and targets.
Prepare comply-or-explain evidence: where a disclosure is not yet available, record the reason, current work plan, progress, and timetable.
Plan for HKFRS S1 and S2: large PAEs should use the current HKEX climate work as a stepping stone toward the wider HKFRS SDS roadmap.

What should private companies and suppliers do?

Private companies should prepare proportionately. A small supplier does not usually need a full HKEX ESG report, but it may need a credible sustainability data pack that can answer customer or lender questions quickly.

A useful starter pack includes:

company reporting boundary and locations;
Scope 1 and Scope 2 emissions calculations;
material Scope 3 categories if customers ask for value-chain emissions;
electricity, fuel, travel, waste, and water data where relevant;
basic environmental, health and safety, labour, and supplier policies;
any targets, initiatives, or transition actions already in place;
methodology notes and evidence files; and
a clear explanation of assumptions, estimates, and data gaps.

This is especially useful for suppliers to listed companies, international buyers, financial institutions, or companies with regional reporting obligations. The easiest way to respond to a sustainability questionnaire is to have the underlying data and evidence ready before the request arrives.

Common mistakes

The first common mistake is saying that HKFRS S1 and S2 are mandatory for every Hong Kong company from 1 August 2025. They are not. They are available for use from that date, but mandatory application depends on regulatory adoption.

The second mistake is treating comply-or-explain as a soft requirement. A weak explanation can create reputational and governance risk. Where a Main Board issuer cannot yet disclose a climate item, the explanation should be considered, specific, and supported by a work plan.

The third mistake is leaving emissions calculations too late. Scope 1 and Scope 2 are now mandatory for all listed issuers from financial years commencing on or after 1 January 2025. Even where Scope 3 is phased, voluntary, or subject to relief, companies should identify likely categories early because value-chain data is usually the slowest part of the process.

The fourth mistake is separating sustainability reporting from finance. The HKEX Climate Requirements and the HKFRS SDS roadmap are both moving toward investor-useful, financially connected disclosure. Climate reporting should therefore involve finance, risk, operations, legal, investor relations, and sustainability teams.

How Keslio can help

Keslio helps companies turn sustainability reporting requirements into a practical workplan, data request, and report. For Hong Kong-related reporting, we can support:

HKEX Appendix C2 and Climate Requirements gap checks;
issuer-category and timeline mapping;
Scope 1, Scope 2, and relevant Scope 3 emissions calculations;
climate data templates and evidence trackers;
board and management governance disclosure drafting;
comply-or-explain work plans;
HKFRS S1 and S2 readiness assessments;
sustainability reporting and communications support; and
supplier request support for companies being asked for sustainability data by customers or lenders.

Official sources and further reading

Conclusion

Hong Kong's sustainability reporting framework is moving quickly, but it is not one single rule for every company. Listed issuers already have concrete HKEX obligations, including mandatory Scope 1 and Scope 2 GHG emissions disclosure from 2025 and phased climate disclosure requirements. LargeCap issuers need to be ready for mandatory Climate Requirements from 2026. Large publicly accountable entities and significant financial institutions should also prepare for broader ISSB-aligned reporting by 2028.

The right next step is to confirm which category the company falls into, then build the data and governance system needed for that category. For many companies, the work starts with a practical emissions inventory, a clear reporting boundary, and a defensible disclosure roadmap.