HKICPA issues the exposure drafts of two inaugural Hong Kong Sustainability Disclosure Standards for public consultation

The Hong Kong Institute of Certified Public Accountants (HKICPA) announces today (16 September) the publication of the Exposure Drafts for HKFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and HKFRS S2 Climate-related Disclosures (HKFRS Sustainability Disclosure Standards) for public consultation. The HKICPA is seeking comments on the Exposure Drafts of HKFRS Sustainability Disclosure Standards from now to 27 October 2024.

The HKICPA is proposing full convergence of HKFRS S1 and HKFRS S2 with IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures (ISSB Standards), to be effective from 1 August 2025. The proposal for full convergence was reached after a holistic assessment of relevant factors, including local and international developments as well as substantive evidence gathered from extensive engagement with a wide range of stakeholders over the past few years, starting with the publication of the draft ISSB Standards in early 2022 and culminating in the completion of a technical feasibility study on the application of the ISSB Standards in Hong Kong in June 2024.

The Institute believes that Hong Kong’s full convergence with the ISSB Standards has global significance as it would bolster the connection of global capital with local businesses as well as those in Mainland China and other regions.

As indicated in the Government’s Vision Statement on Turning Obligations into Opportunities in Developing the Sustainability Disclosure Ecosystem in Hong Kong (Vision Statement), the application of HKFRS S1 and S2 will prioritize publicly accountable entities including listed entities and regulated financial institutions in Hong Kong.

Roy Leung, President of the HKICPA, said, “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.”

“HKFRS S1 and S2 are crucial in aligning Hong Kong's sustainability reporting with the global baseline. By enhancing consistency and comparability, these standards will better meet the needs of investors seeking reliable sustainability information.”

As the sustainability disclosure standard setter of Hong Kong, the HKICPA will continue to work closely with the Government, financial regulators and other stakeholders towards being amongst the first jurisdictions to align the local sustainability disclosure requirements with the ISSB Standards. The HKICPA is fully committed to building the capacities of local stakeholders for sustainability reporting, in line with the Vision Statement which outlines the development of a comprehensive ecosystem for sustainability disclosure in Hong Kong.