As one of the well-known financial centers in Asia and even the world, Hong Kong has a significant impact on listed companiesESG Information DisclosureThe regulatory development should be ahead of the mainland.
Actively drawing on Hong Kong's experience, forThe Mainland China Securities Regulatory Commission and exchanges are of great significanceHong Kong isESG information disclosure aspectThe continuous innovation and improvement provide a constantly updated reference model for the mainland.
History of ESG Disclosure in Hong Kong
The Hong Kong Stock Exchange issued a consultation document in December 2011 on the implementation of measures for Hong Kong listed companiesGuidelines for Environmental, Social and Governance Reporting(Guidelines) solicit opinions from all sectors.
Four months later, the Stock Exchange of Hong Kong received a total of 106 response opinions and decided to make appropriate revisions based on these opinions to include the Guidelines in the appendix of the Listing Rules. However, at that time, the Guidelines were only voluntary disclosure recommendations.
1) InESG GuidelinesAdd mandatory disclosure requirements, including board statements considering ESG matters, explaining the reporting scope of ESG reports, etc;
2) Disclose significant climate related matters that have already or may have an impact on the issuer;
3) Revision'Environment'and so onKey performance indicators and disclosure of relevant targets；
4) All of them'Society'The disclosure responsibility for key performance indicators has been raised to 'explain if not complied with';
5) The deadline for publishing ESG reports has been shortened to within five months after the end of the fiscal year.
In November 2021, the Hong Kong Stock Exchange publishedClimate Information DisclosureGuidance, willSeveral key recommendations of TCFD have been incorporated into ESG reporting regulations.
The climate disclosure guidelines help companies disclose how to address the risks caused by climate change and assist issuers in gradually making climate change reports based on TCFD recommendations.
In addition, it is also requiredEnvironmental, Social and Governance ReportIt must be published synchronously with the annual report in advance.
Latest ESG disclosure adjustments
In April 2023, the Hong Kong Stock Exchange proposed to require all issuers toDisclosing climate related information in ESG reports,And it is recommended that listed companies introduce new climate related information disclosure requirements that comply with the International Sustainable Development Standards Board (ISSB) climate guidelines.
In November 2023, the Hong Kong Stock Exchange releasedLatest Developments in Climate Information Disclosure Market Consulting under the Optimization of Environmental, Social, and Governance (ESG) FrameworkIt is pointed out that when implementing the revision of the Listing Rules, the Stock Exchange of Hong Kong will consider the policy of adjustable expansion and phased implementation under the implementation guidelines.
Therefore, the effective date of the relevant revisions to the Listing Rules will be postponed to January 1, 2025, to give issuers more time to familiarize themselves with the new climate information disclosure regulations.
In April 2024, the Hong Kong Stock Exchange released a consultation summary on market consultation on optimizing climate information disclosure under the Environmental, Social and Governance (ESG) framework. The revised Listing Rules will come into effect on January 1, 2025, and its appendix includesESG Code of ConductAdd section D specifically for disclosing climate information.
This consultation summary aims to align disclosure requirements to the maximum extent possible with International Financial Reporting Standard S2- Climate related Disclosures (IFRS S2).
In addition, to highlight its mandatory nature, the Hong Kong Stock Exchange suggests thatRenamed "Guidelines" as "Code of Conduct"。
This revision not only reflects the strengthening of the Hong Kong Stock ExchangeESG Information Disclosure FrameworkThe regulatory requirements also indicate a new round of ESG regulatory upgrade for Hong Kong's capital market to align with international standards.
From the beginningESG Reporting GuidelinesAccording to the latest ESG guidelines, the Hong Kong Stock Exchange has not immediately mandated all listed companies to disclose ESG information, but has adopted a gradual strategy from encouraging voluntary disclosure to implementing mandatory disclosure.
According to the latest climate regulations, the Hong Kong Stock Exchange, based on the size of the issuer, willESG Information DisclosureThe requirements have also been graded to adapt to the abilities and needs of different companies.
This gradual and step-by-step strategy is worth referencing and learning from for domestic exchanges and regulatory agencies.
New guidelines for ESG fund disclosure
In addition to ESG disclosures by listed companies, at the end of June 2021, the Hong Kong Securities and Futures Commission released relevant informationESG Fund DisclosuresThe new guidelines clarify how to strengthen the information disclosure of ESG funds that focus on environmental, social, and governance factors as investment priorities.
The new guidelines clearly state the disclosure requirements for ESG funds in their sales documents, such as the prospectus before fundraisingDisclose investment strategies, asset allocation, and reference benchmarks,And criteria for measuring the ESG focus of funds,For example, filters, metrics, ratings, third-party certificates, and so on.
Given the rapid and diversified development of ESG investment strategies, the Hong Kong Securities and Futures Commission has noted the need for asset management companies to clearly disclose how funds achieve their goalsESG focusTo assist investors in understanding these products and evaluating whether they meet their investment needs.
Ashley Alder, CEO of the Hong Kong Securities and Futures Commission, stated that improving sustainability related disclosures is crucialTransparency, comparability, and consistency,It will help investors select suitable ESG funds and reduce the chances of fund greenwashing.
On August 20, 2021, the Hong Kong Securities and Futures Commission released a statement regardingCode of Conduct for Fund ManagersThe revision and "Circular to Licensed Corporations - Fund Managers' Management and Disclosure of Climate Related Risks" require fund managers to consider climate related risks in the investment and risk management process and make appropriate disclosures.
If the fund manager is responsible for the fundOverall operationIt should be fully disclosed to fund investorsInformation on climate related risks,So that fund investors can make decisions about investing in funds with sufficient information, including:
(i) Its governance arrangements in monitoring climate related risks; And (ii) how it considers climate related risks in its investment and risk management processes, including the tools and indicators used to identify, assess, manage, and monitor such risks.
Fund managers should passDifferent channels, such as websites, communications, or reportsMake appropriate disclosures to investors and ensure that relevant information is brought to the attention of fund investors; At least annually review the disclosure content and update it as deemed appropriate.