The ESG regulatory framework in Hong Kong

The ESG regulatory framework in Hong Kong primarily targets listed companies, banks, and asset management firms. Listed companies must disclose ESG information, mainly adopting a "comply or explain" approach. Financial regulators have mandated banks and certain asset management firms to address climate-related risks and disclose related initiatives.

Regulators actively communicate forthcoming ESG regulatory developments to the market. Insights on key Hong Kong ESG regulatory points were provided by Ashley Alder and others on May 27, 2022. The Hong Kong Stock Exchange suggested in its June 2022 listing communication that listed companies should actively respond to ESG reporting requirements.

Another significant development is the consultation paper released by the Hong Kong Stock Exchange on April 14, 2023, proposing amendments to current ESG reporting guidelines. The proposal focuses on enhancing climate reporting, such as mandatory disclosure, set to take effect on January 1, 2025. This extended implementation date provides companies with additional time to address evolving ESG reporting standards, emphasizing the necessity of staying informed and responsive to regulatory changes.