Hong Kong

Yes.

ESG disclosure requirements are primarily aimed at listed companies and financial institutions:

1. The ESG Reporting Code in Appendix C2 to the Hong Kong Listing Rules (ESG Reporting Code) issued by the Hong Kong Stock Exchange (HKEX) sets out ESG disclosure requirements to be reported on an annual basis by Hong Kong primary-listed companies. This includes the phased implementation of climate-related disclosures aligned with IFRS S2 as outlined in section A.3 below.
2. The Hong Kong Monetary Authority’s (HKMA) Supervisory Policy Manual contains a Climate Risk Management module (HKMA Climate Module), which includes best practices on climate disclosures by “authorized institutions” (primarily, banks).
3. Asset managers (licensed by the Securities and Futures Commission (SFC)) of certain collective investment schemes are required to make climate-related disclosures.
4. Hong Kong-incorporated companies (unless exempted) are required under the Companies Ordinance to prepare an annual directors’ report covering (amongst other matters) its environmental policies, performance and compliance with relevant laws and regulations. However, these requirements are relatively high-level.
5. At the product level, SFC-authorised (in short, retail) green or ESG funds must include certain disclosures in the offering documents and disclose, at least annually, how the funds have attained their ESG focus. Mandatory Provident Fund (MPF)^[1] trustees of ESG constituent funds are required to include similar disclosures in MPF scheme brochures and annual governance reports.

[1] The MPF system is Hong Kong’s statutory retirement savings system.

For listed companies, the disclosure requirements in the ESG Reporting Code are a mix of both. Disclosures of ESG governance structure and ESG reporting boundary and principles are mandatory. Disclosures of environmental and social aspects under Part C of the ESG Reporting Code are on a comply-or-explain basis. Climate-related disclosures under Part D of the ESG Reporting Code (HKEX Climate Disclosure Rules) apply in a phased manner as follows:

1. Scope 1 and Scope 2 emissions: mandatory for financial years commencing on or after 1 January 2025.
2. Other climate disclosures (including Scope 3 emissions) under Part D:

1. 1. Main Board-listed issuers included in the Hang Seng Composite LargeCap Index^[1] (Large Cap Issuers): comply-or-explain for financial years commencing on or after 1 January 2025 and mandatory for financial years commencing on or after 1 January 2026;
   2. other Main Board-listed issuers: comply-or explain for financial years commencing on or after 1 January 2025; and
   3. GEM-listed issuers: voluntary.

For authorized institutions, while the HKMA Climate Module is not a mandatory guideline, non-compliance can potentially be taken into account when assessing whether an institution has conducted its business with prudence and professional competence. The HKMA expects authorized institutions to make TCFD-aligned disclosures but will take a proportionate approach - depending on factors such as the significance of operations in Hong Kong, when assessing whether a comply-or-explain approach may be taken, with explanations and plans for future enhancements given.

The other requirements mentioned in section A.2 are mandatory.

For listed companies, environmental, social and governance aspects are all covered, but the focus is on climate.

For financial institutions, the focus is on climate.

The HKEX Climate Disclosure Rules are substantially based on IFRS S2, and issuers are strongly encouraged to prepare their climate disclosures following the conceptual foundations in IFRS S1. The HKEX has clarified in an FAQ that the reliefs provided by the IFRS S2 December 2025 Amendments apply.

Authorized institutions are expected to report climate disclosures in line with the TCFD Recommendations at a minimum.

Hong Kong is working towards further alignment with international standards - including the ISSB Standards - for listed companies and financial institutions as outlined in section A.11 below.

For listed companies, “materiality” is defined in the ESG Reporting Code as “the threshold at which ESG issues determined by the board are sufficiently important to investors and other stakeholders that they should be reported”. This is sufficiently wide to encompass a range of materiality considerations, including financial materiality. For the purpose of the HKEX Climate Disclosure Rules, a single materiality approach is adopted in line with the ISSB Standards (though listed companies can prepare additional disclosures under a double materiality approach if they wish).

The requirements applicable to authorized institutions and asset managers are based on the TCFD Recommendations and therefore adopt a single materiality approach.

Yes.

Under the HKEX Climate Disclosure Rules:

1. Scope 1 and Scope 2 emissions must be reported on a mandatory basis by all listed companies. Disclosures of Scope 3 emissions are mandatory for Large Cap Issuers for financial years beginning on or after 1 January 2026 and required on a comply-or-explain basis for all other Main Board-listed companies; and
2. the GHG Protocol must be used as the measurement methodology, unless a different method is required by another jurisdiction or stock exchange in whole or in part.

Authorized institutions are subject to Scope 1 and Scope 2 reporting requirements under the HKMA Climate Module. Large asset managers are required to report on portfolio carbon footprint (Scope 1 and Scope 2 emissions) where data is available or can be reasonably estimated. It is not mandatory to adopt a specific GHG measurement methodology.

Assurance is encouraged, but currently not mandatory.

However, Hong Kong has taken initial steps towards establishing a sustainability assurance regime:

1. The Hong Kong Institute of Certified Public Accountants published its sustainability assurance standard in March 2025 (HKSSA 5000 - General Requirements for Sustainability Assurance Engagements), which is fully aligned with the International Standard on Sustainability Assurance (ISSA) 5000 - General Requirements for Sustainability Assurance Engagements issued by the International Auditing and Assurance Standards Board; and
2. The Accounting and Financial Reporting Council (AFRC) issued a consultation in December 2025 on a regulatory framework for sustainability assurance, including proposals for phased mandatory assurance and a registration regime for assurance providers. See section A.12 below for more detail.

Some large non-listed entities have issued ESG reports, even though it is not mandatory, and have referenced international standards.

Yes, the HKMA issued the Hong Kong Taxonomy for Sustainable Finance in May 2024. The latest iteration (Phase 2A) was published in January 2026. The taxonomy has no mandatory application.

Phase 1 of the taxonomy covered the following sectors: power generation, transportation, waste management and construction. Phase 2A added two new sectors - manufacturing and information and communications technology (ICT) - and introduced new transition elements and a climate adaptation category. Work is underway to expand the scope of the taxonomy to cover more green and transition activities and climate adaptation measures.

Hong Kong has taken a climate-first approach with the introduction of the HKEX Climate Disclosure Rules (which are substantially based on IFRS S2) for listed companies. This is regarded as an interim step towards adopting the ISSB Standards.

In December 2024, Hong Kong issued:

1. sustainability disclosure standards (HK Standards) that are fully aligned with the ISSB Standards (i.e. both IFRS S1 and IFRS S2); and
2. a Roadmap on Sustainability Disclosure in Hong Kong, which highlighted that Hong Kong will prioritise the application of the HK Standards to publicly accountable entities under a phased approach:

1. 1. the HKEX will consult the market in 2027 on mandating sustainability reporting against the HK Standards, initially for Large Cap Issuers for financial years beginning on or after 1 January 2028; and
   2. financial regulators will seek market feedback on requiring non-listed financial institutions carrying a significant weight in Hong Kong to report against the HK Standards from 2028.  

The HKEX has indicated that it will also consider whether and how to upgrade the HKEX Climate Disclosure Rules to a mandatory status for all listed issuers (and not just Large Cap Issuers) when it consults on the adoption of the HK Standards.

The HKMA has encouraged banks to align their disclosures with international frameworks, including the ISSB Standards and the Basel Committee’s disclosure framework for climate-related financial risks, and will undertake a consultation on the adoption of these standards.

Hong Kong’s Biodiversity Strategy and Action Plan (updated in December 2025) stated that Hong Kong will promote the voluntary adoption of the TNFD framework and will also consider possible refinements to the ESG Reporting Code to include more requirements for biodiversity-related risk disclosure and dependency practices upon publication of relevant standards by the ISSB.^[1]

There will be continued focus on enhancing sustainability reporting requirements and ensuring integrity of such reporting. As mentioned, the Hong Kong government has announced a pathway towards adopting both ISSB Standards in a proportionate manner. In light of this, the HKEX has encouraged listed companies to consider early adoption of the ISSB Standards in their sustainability reporting and has issued a guide on how to use disclosures from the ISSB Standards to meet the requirements of HKEX’s ESG Reporting Code.

The HKMA has stated that it will leverage on the ISSB Standards and the Basel Committee’s disclosure framework on climate-related financial risks to enhance sustainability disclosure requirements for the banking sector. 

Assurance requirements are expected to come into play for the publicly accountable entities noted in section A.11(b) above. The AFRC’s consultation proposes that such entities obtain limited assurance in compliance with the HKSSA 5000 standard in a phased manner, starting with Scope 1 and Scope 2 GHG emission disclosures from the third financial year of mandatory reporting under the HK Standards and all remaining disclosures from the fifth financial year of mandatory reporting under the HK Standards. The consultation period ended on 30 March 2026. 

Yes, it is the Hong Kong government’s policy to reduce Hong Kong's carbon emissions by 50% before 2035 (compared to 2005) and to reach carbon neutrality before 2050.

The Hong Kong government has outlined four major decarbonisation strategies: “net-zero electricity generation”, “energy saving and green buildings”, “green transport” and “waste reduction”.

There is no mandatory carbon pricing mechanism in Hong Kong. The HKEX has established a voluntary carbon trading platform, Core Climate, for eligible participants from any sector to purchase, trade and/or retire international voluntary carbon credits.  

Currently, mandatory requirements in relation to transition plans focus on disclosure.

For listed companies, the HKEX Climate Disclosure Rules require (subject to the phased implementation outlined in section A.3) the disclosure of information about how a company has responded to, and plans to respond to, climate-related risks and opportunities in its strategy and decision-making, specifically any transition plan the issuer has, or a negative statement, where it does not have a transition plan. Issuers should also disclose the progress of plans disclosed in previous reporting periods. There is no mandatory standard on the content of transition plans, though listed issuers should refer to the HKEX’s Implementation Guidance for Climate Disclosures for guidance, illustrative disclosures and further resources.

Authorized institutions (including banks) are expected to disclose any transition plans they have. In addition, they are expected to incorporate climate-related risks into their internal capital adequacy assessment process (ICAAP) and capital planning as outlined in the HKMA’s Supervisory Policy Manual on Supervisory Review Process. For guidance, the HKMA has issued high-level principles to assist authorized institutions to plan for a net-zero transition, as well as Good Practices on Transition Planning and Good Practices on Integrating Climate-related Risks into ICAAP and Capital Planning.

However, there are potentially plans for more robust requirements relating to transition planning for the banking sector. In its Sustainable Finance Action Agenda issued in October 2024, the HKMA set out various goals for banks, including that all banks should strive to:

1. achieve net zero in their own operations by 2030 and in their financed emissions by 2050; and
2. tentatively from 2030, make their transition plans available to the HKMA on a comply-or-explain basis. The transition plans should consist of decarbonisation and financing targets, as well as action plans for achieving the 2050 net-zero goal, including a plan for a managed phase-out of financing for carbon-intensive assets.

The HKMA’s 2025 Sustainability Report stated its key priority actions for 2026, including:

1. keeping its Supervisory Review Process under review to take into account banks’ effective management of climate-related risks, with the aim of incentivising banks to strengthen their climate risk management frameworks; and
2. finalising a new Supervisory Policy Manual module on “Transition Planning” (GS-2) to provide banks with more detailed guidance on managing the risks associated with the net-zero transition.

The HKMA consulted the banking sector on a draft GS-2 in 2025 and based on feedback received, is revising the draft for a second round of consultation. The extent to which the transition-related goals noted above will be translated into more robust requirements remains to be seen.

Companies are not required to set or meet climate-related targets. However, disclosure requirements apply to listed companies that have set climate-related targets as outlined below.

The ESG Reporting Code contains requirements for listed companies to disclose (on a comply-or-explain basis) certain environmental targets (emission targets, waste reduction targets, energy use efficiency targets and water efficiency targets) that have been set.

In addition, the HKEX Climate Disclosure Rules require listed companies to disclose:

1. any climate-related targets they have set and any targets they are required to meet by law or regulation (including any GHG emissions target);
2. certain details in relation to each target, e.g. how it aligns with the latest international agreement on climate change and whether it covers Scope 1, 2 or 3 emissions. The planned use of carbon credits to meet any net GHG emissions target would also trigger further disclosures;
3. information on their approach to setting and reviewing each target, and how they monitor progress, including any third-party validation; and
4. information about their performance against each of their climate-related targets. 

As mentioned in section B.5, EPR schemes are being developed, which will introduce statutory recovery targets for producers of certain products such as plastic beverage containers and beverage cartons.

EPR schemes are being progressively introduced. Legislation was passed in July 2025 to establish a common legislative framework for EPRs, facilitating the progressive inclusion of various products in the future and providing for statutory recovery targets to be set for regulated products. The government plans to first apply the new framework to plastic beverage containers and beverage cartons. There are also proposals to expand EPR to EV batteries. A consultation exercise is planned for 2026. Pre-existing schemes covering e-waste and glass containers are in place.

There is no general corporate sustainability due diligence law in Hong Kong.

However, there are disclosure requirements in the ESG Reporting Code for listed companies to disclose (on a comply-or-explain basis): (a) any significant impacts on the environment and actions taken to manage them; (b) policies and compliance with laws relating to child and forced labour, and steps taken to eliminate such practices when discovered; and (c) policies on managing, and practices used to identify and monitor, environmental and social risks of the supply chain.

It is a strategic priority for Hong Kong to strengthen its role as a sustainable finance hub.

To attract capital to sustainable investments and financing, Hong Kong has introduced: (a) a taxonomy; (b) climate reporting aligned with global standards; and (c) a carbon credit trading platform.

To encourage businesses to use sustainable finance instruments, Hong Kong launched the Green and Sustainable Finance Grant Scheme to provide subsidy for eligible bond issuers and loan borrowers to cover part of their expenses on bond issuance and external review services. The scheme was subsequently expanded to cover transition bonds and loans. As at end 2025, the scheme has subsidised close to 650 green and sustainable debt instruments issued in Hong Kong with a total underlying issuance volume of around US$180 billion.

To promote and scale transition finance, an industry working group under the Hong Kong Green and Sustainable Finance Cross-Agency Steering Group (Cross-Agency Steering Group) issued the Transition Finance Operational Reference Guide - Phase 1 Report: Mobilising Finance for the Transition of the Technology Sector. The guide is intended to assist financial institutions and corporates to operationalise international frameworks and principles on transition finance through practical guidance. The guide uses the ICT sector as a pilot sector to develop the operational guidance, highlighting commonalities across international frameworks to identify a core set of entity-level transition-related information and metrics relevant to the ICT sector. It is intended that subsequent phases will cover activity-level financing and investment.

There are indications that requirements on transition planning are starting to move beyond reporting:

1. the HKMA plans to issue GS-2 - a new Supervisory Policy Manual module on transition planning for the banking sector (as noted in section B.3);
2. mandatory EPR schemes are being progressively introduced, impacting producers of certain products (as noted in section B.5); and
3. for the aviation sector, Hong Kong has set a 1-2% sustainable aviation fuel usage target by 2030 for Hong Kong International Airport.

According to the Cross-Agency Steering Group’s 2026-2028 Strategic Priorities, Hong Kong aims to accelerate the growth of sustainable finance in Hong Kong through strengthening the sustainable finance and disclosure ecosystem and developing strengths in transition and adaptation finance.

In addition to the plans noted above on enhancements to sustainability reporting, assurance and taxonomy, there are plans to explore ways to:

1. develop the carbon markets and green finance ecosystem across the Greater Bay Area (GBA) and promote a regional carbon market. The relevant exchanges in the GBA^[1] signed an MOU in September 2025 and are exploring the testing of cross-boundary carbon trade settlement within the GBA, with a view to completing the pilot in 2026; and
2. mobilise private-sector funding, including through public-private matching funding, towards nature-positive projects in Hong Kong.  

Hong Kong is also prioritising the development of hydrogen energy. Pursuant to the Strategy of Hydrogen Development published in June 2024, Hong Kong has introduced legislative amendments to provide a legal framework for regulating the use of hydrogen as fuel, approved various hydrogen energy trial projects and introduced subsidy schemes for trial projects.

No.

No, but some guidance exists. For example:

1. the HKMA’s circular on expected standards in respect of the sale and distribution of green and sustainable investment products by registered institutions deals with how registered institutions offering such products should minimise greenwashing risks;
2. the HKMA has issued a circular on good practices relating to the due diligence processes for green and sustainable products offered by authorized institutions. It seeks to ensure that such products and related funds are managed in a way that is consistent with the authorized institution’s climate strategy, thereby reducing exposure to greenwashing risks;
3. the SFC has issued requirements on retail green and ESG funds, including on the funds’ names and marketing materials; and
4. the voluntary Hong Kong taxonomy should help to minimise greenwashing risks in the covered sectors. 

Likely grounds include:

1. disclosure liabilities under securities laws and regulations – for example, for providing materially false or misleading information in listing documents or other corporate disclosure documents, such as ESG reports;
2. breaches of directors’ duties;
3. claims in tort for misrepresentation; and
4. breaches of the Trade Descriptions Ordinance.

There are also risks of regulatory enforcement pursuant to, for example, codes / guidance issued by financial regulators on the marketing of financial products and the Hong Kong Listing Rules’ requirements on ESG disclosures.