• HKICPA releases Exposure Drafts of HKFRS S1 and S2 for public consultation, aligning with global standards.
• Full convergence with IFRS S1 and S2 targets enhancing sustainability transparency for investors.
• Publicly accountable entities, including listed companies and financial institutions, will be prioritized.

The Hong Kong Institute of Certified Public Accountants (HKICPA) announced the release of Exposure Drafts for the first-ever Hong Kong Sustainability Disclosure Standards, namely HKFRS S1 and HKFRS S2. These standards, aligned with the IFRS Sustainability Disclosure Standards, are open for public consultation until October 27, 2024.

Aligning with Global Standards

HKICPA proposes full convergence with IFRS S1 and S2, which focus on sustainability-related financial disclosures and climate-related reporting, respectively. This initiative follows years of engagement and technical feasibility studies conducted with various stakeholders, and it is set to take effect on August 1, 2025.

Impact on Global and Local Business

According to Roy Leung, President of the HKICPA, “The issuance of Exposure Drafts of HKFRS Sustainability Disclosure Standards marks a significant leap forward for Hong Kong’s sustainability disclosure landscape. This demonstrates the Institute’s unwavering commitment to supporting the sustainable development of Hong Kong.”

Leung emphasized that these standards are critical in aligning Hong Kong with the global baseline for sustainability reporting. “By enhancing consistency and comparability, these standards will better meet the needs of investors seeking reliable sustainability information.”

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Targeting Public Entities

The new standards will prioritize publicly accountable entities, including listed companies and regulated financial institutions, as per the Hong Kong government’s Vision Statement. This move aims to connect local businesses and global capital markets, reinforcing Hong Kong’s role as a hub for sustainable finance in Asia.

The HKICPA continues to collaborate with the government and financial regulators to align Hong Kong’s sustainability reporting with international benchmarks, ensuring the city remains at the forefront of global sustainability initiatives.