Learn more about our comprehensive legal services.
Advising our clients on different opportunities and challenges of the industry.
Developing a unique culture, which blends traditional client care with modern technology and working practices since 1851.
Stay up to date on the latest news and legal insights.
News & Insights
Authored by: Ming Chiu Li
The Financial Services and the Treasury Bureau (FSTB) has issued a Roadmap on Sustainability Disclosure in Hong Kong (Roadmap), to align Hong Kong reporting standards with the International Financial Reporting Standards – Sustainability Disclosure Standards (ISSB Standards).
The ISSB Standards specifically targets publicly accountable entities (PAEs). PAEs include (i) public or listed entities, and (ii) entities which hold assets in a fiduciary capacity for a broad group of outsiders as one of their primary businesses (including but not limited to banks, credit unions, insurance companies, securities brokers/dealers, mutual funds and investment banks).
In Hong Kong, the Roadmap proposes the adoption of ISSB Standards by large PAEs, which fall into 2 categories:
Category 1 – issuers that are Hang Seng Composite Large Cap Index constituents
Category 2 – non-listed PAEs which are financial institutions carrying a significant weight in Hong Kong.
No later than 2028, large PAEs (both Category 1 & Category 2) will be required to apply the Hong Kong standards, in alignment with the ISSB Standards.
The Roadmap aims to provide a transparent and well-defined pathway on sustainability reporting for PAEs in Hong Kong.
On the technical level, the Hong Kong Institute of Certified Public Accountants has been developing the Hong Kong standards on a full alignment basis with the ISSB Standards. It is expected to issue the new Hong Kong standards under HKFRS, relating to sustainability-related financial information, by the end of 2024.
Financial regulators of different sectors will require financial institutions carrying a significant weight to apply the Hong Kong standards within the above timeline. For the asset management entities, the Securities and Futures Commission is anticipated to further engage with the industry in connection with the adoption of the Hong Kong standards. Once formalised, these standards need to be followed when financial reporting information is compiled.
Subscribe to Publications
Sign up for our regular updates covering the latest legal developments, regulations and case law.