Hong Kong is stepping up its climate transparency game, bringing local reporting in line with global sustainability standards.
From 1 January 2025, Hong Kong–listed companies must disclose climate-related information in line with IFRS S2 under the HKEX ESG Reporting Code.
Large-cap issuers will be required to report Scope 1 and 2 emissions from 2025 and all climate disclosures from 2026.
Other Main Board issuers will follow a “comply or explain” approach from 2025, while GEM-listed companies may report voluntarily.
Hong Kong’s 2024 Roadmap also sets a goal for full adoption of ISSB-aligned standards (HKFRS S1 and S2) for large publicly accountable entities by 2028.
Disclosure Requirement | Main Board & GEM Issuers | LargeCap Issuers |
Scope 1 & 2 GHG Emissions | Mandatory from Jan 1, 2025 | Mandatory from Jan 1, 2025 |
Other New Climate Disclosures | “Comply or Explain” from Jan 1, 2025 | “Comply or Explain” from Jan 1, 2025 |
All New Climate Disclosures | “Comply or Explain” | Mandatory from Jan 1, 2026 |
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What is ESG?
ESG stands for Environmental, Social, and Governance—a set of factors investors and other stakeholders use to understand how a company manages material risks and opportunities beyond the traditional financial statements.
ESG looks at how you make money (your practices and decisions), not just how much you make.
Key business information you must disclose in ESG reporting
When you create your ESG report, you need to share specific information about your business. Think of it as telling your complete story across three key areas: how you treat the planet,your people, and your processes.
Environmental (“E”)
This part is about your company’s impact on the natural world. You need to be upfront about your footprint and your plan to lighten it.
Climate risks and opportunitiesYou must explain how climate change could help or hurt your business financially. This includes everything from the risk of more extreme weather, like typhoons, to the opportunities that come from creating green products. | Greenhouse Gas (GHG) EmissionsYou need to report your emissions. This means sharing the numbers for: Scope 1– your own direct pollution Scope 2– pollution from the power you buy and making a plan to report Scope 3– pollution from your suppliers and customers | Resource ManagementYou have to disclose how you manage key resources. This includes your use of energy and water and your plans for reducing waste. Think of it as sharing your company’s utility bill and its recycling plan. |
Social (“S”)
This section is all about your relationships. It covers how you treat your employees, customers, and the wider community.
Your teamYou must share information about your employees, including:
You also need to report on diversity and inclusion within your workforce. | Your supply chainYou need to explain how you manage ESG risks within your supply chain. This means showing that you work with partners who also have responsible and ethical practices. | Fighting corruptionYou must disclose your policies on preventing bribery and corruption. This includes how you train your staff to follow the rules and act with integrity. |
Governance (“G”)
This is the foundation that holds everything together. It’s about your company’s leadership, rules, and internal controls for managing ESG issues.
Board oversightYou need to clearly state how your board oversees ESG topics. Who is in charge of the strategy? How often do they discuss it? This shows you have strong leadership. | Risk managementYou must describe the process your company uses to find, assess, and manage ESG-related risks. This is your official game plan for handling challenges as they arise. | Reporting standardsYou should state which framework or standards you used to prepare your report, such as the HKEX’s ESG Reporting Guide or the ISSB Standards. This tells everyone you followed a credible and consistent set of rules. |
Why is ESG reporting important for Hong Kong companies?
Here is why ESG reporting is essential for Hong Kong companies:
- It’s a listing rule: The Hong Kong Stock Exchange (HKEX) mandates ESG reporting for all listed companies. You must comply or explain why you haven’t. Non-compliance is a regulatory risk.
- Investors demand it: Global and local investors use your ESG data to decide where to put their money. A strong ESG report makes your company more attractive to them and can lead to better access to capital.
- It’s a business advantage: Good ESG practices improve your company’s performance. It helps you manage long-term risks, attract top talent, enhance your brand reputation, and often uncovers ways to cut operational costs.
2025–2026 Hong Kong Budget Summary and What It Means for Businesses
Most affected business sectors by ESG regulations in Hong Kong
Sectors with high environmental impact and those under intense investor scrutiny are most affected by Hong Kong’s ESG regulations.
The ESG regulations primarily impact these sectors due to their significant carbon footprints, resource consumption, and complex supply chains.
- Financial Services
- Real Estate and Construction
- Energy and Utilities
- Manufacturing and Retail
Financial services (Banks, Insurers, Asset Managers)
The finance sector is at the heart of ESG regulation, not just for its own operations but because it finances all other industries.
- Why they’re affected: Regulators and investors expect you to manage climate-related financial risks in your lending, underwriting, and investment portfolios. You face pressure to fund green projects and divest from high-emission industries.
- Key Issues: Greenwashing risks, financing a transition to a low-carbon economy, and reporting on the ESG performance of your assets.
Real estate and construction
This sector is one of the largest contributors to carbon emissions and resource consumption in Hong Kong.
- Why they’re affected: Your buildings have a massive environmental footprint, from energy consumption (heating, cooling) to the materials used in construction. The new climate disclosure rules put a spotlight on your emissions (Scope 1, 2, and 3) and physical risks like rising sea levels and extreme weather.
- Key Issues: Energy efficiency of buildings, use of sustainable materials, waste management on construction sites, and climate resilience of properties.
Energy and utilities
As direct producers and suppliers of energy, this sector is on the frontline of the climate transition.
- Why they’re affected: Fossil fuels and energy generation directly tie your business model, making you a primary target for emission reduction policies. The mandatory GHG reporting rules directly impact how you operate and report your performance.
- Key Issues: Transitioning to renewable energy sources, managing grid stability with new technologies, and reducing Scope 1 emissions from power plants.
Manufacturing and retail (especially those with global supply chains)
These sectors face scrutiny over both environmental and social factors.
- Why they’re affected: Your operations often involve energy-intensive production processes. Furthermore, complex global supply chains raise social concerns related to labor practices, human rights, and ethical sourcing. Investors and consumers demand transparency across your entire value chain.
- Key Issues: Supply chain carbon footprint (Scope 3 emissions), factory working conditions, sustainable sourcing of raw materials, and product waste (packaging).
How to comply with Hong Kong’s new ESG rules
Getting started with the new ESG rules doesn’t have to be complicated. Think of it as a clear project with nine simple steps. Let’s walk through them.
Step 1: Know your starting point
First, figure out what the new rules ask of your specific company. Then, compare that to what you are already doing. It’s like making a to-do list: you see what’s required and check what you’ve already done. This shows you exactly what’s left to do.
Step 2: Put someone in charge
Your ESG plan needs a leader. Officially give your company’s board and management the job of overseeing climate issues. Think of it as naming a team captain. When someone is clearly in charge, everyone knows who to turn to and what their role is.
Step 3: Focus on what matters most
You don’t need to track everything. Just focus on the climate issues that are most important to your business and its success.
This means looking at your whole operation, from the suppliers you work with to the customers you serve, and asking: what are the biggest risks and opportunities here?
Step 4: Count your emissions
It’s time to measure your company’s carbon footprint. The easiest way to think about this is in three parts:
- Scope 1: Your direct pollution (like from company cars).
- Scope 2: Pollution from the electricity you buy.
- Scope 3: Pollution from everyone else in your business chain (like suppliers). Just start by counting the first two. You can make a plan to tackle the third one later.
Step 5: Play the “what if?” game
Think about how future climate changes could affect your business. For example, “What if there are more typhoons?” or “What if there’s a new tax on pollution?” Start by talking through these ideas. You can add numbers and data to your plans later on as you get more comfortable.
Step 6: Make your action plan
Now, create a real roadmap for your goals. Set clear targets for how you’ll improve. Your plan should show what you’ll do, how much you’ll spend, and the deadlines you’ll meet. This tells everyone you have a serious strategy to become more sustainable.
Step 7: Connect climate to cash
Show how climate issues can affect your company’s bottom line. Try to put a price tag on the risks and opportunities. If it’s too hard to find an exact number at first, it’s okay. You can explain the financial impact in words, as long as you state why you’re doing so.
Step 8: Get your work double-checked
To build trust, you’ll need an expert to review your ESG report. This is like having a teacher check your homework to make sure it’s correct.
Start organizing your data now, so you are ready when it’s time for this official review.
Step 9: Publish your full story
Finally, put all this great information into your yearly ESG report. Make sure you also mention the key points in your main financial report. This connects the dots between your sustainability efforts and your financial health, giving everyone the complete picture.
Records to gather to create an ESG report
You don’t need a single folder of specific “documents” but rather a collection of data and records from across your company to create your final ESG report. The main document you produce is the ESG report itself, supported by various internal records and external standards.
For environmental
- Utility Bills: Your electricity and water bills are crucial for tracking consumption.
- Fuel Records: Receipts and logs for gasoline or other fuel used in company vehicles (for Scope 1 emissions).
- Waste Invoices: Records from your waste management company showing how much you dispose of and recycle.
- Business Permits and Licenses: Any environmental permits you hold for your operations.
For social
- HR Records: Payroll data, employee turnover rates, diversity statistics (gender, age), and training logs.
- Health and Safety Logs: Records of workplace accidents, incidents, and safety meetings.
- Supplier Contracts: Agreements with your key suppliers, especially those with ethical or environmental clauses.
- Whistle-blower Reports: Any records from your anti-corruption and ethics reporting system.
For governance
- Board Meeting Minutes: Official records showing when the board discussed ESG, climate risks, and strategy.
- Risk Registers: Your company’s log of identified risks, including those related to ESG.
- Internal Policies: Your official Code of Conduct, anti-bribery policy, and other corporate rulebooks.
Integrate your ESG and finances seamlessly
Mastering ESG reporting in Hong Kong is vital, but aligning it with your finances can be a challenge.
Sleek solves this by creating meticulously audited financial statements designed to integrate perfectly with your ESG data.
Our thorough approach makes checking and balancing between your financial performance and sustainability metrics effortless, providing a clear, unified view of your business. Stop wrestling with separate reports. Let Sleek streamline your financial and ESG journey for ultimate clarity and compliance.
Contact Sleek today to simplify your reporting.
Sleek is here to help you align your company finances with ESG reporting
FAQs about ESG reporting in Hong Kong
Is ESG reporting mandatory in Hong Kong?
Yes. For all companies listed on the Hong Kong Stock Exchange (HKEX), ESG reporting is mandatory. It operates on a “comply or explain” basis, but new climate rules are becoming fully mandatory for larger companies starting in 2026.
Who needs to comply with ESG reporting rules?
All companies listed on the HKEX, including those on both the Main Board and GEM, are required to publish an annual ESG report. The rules are being applied most strictly to the largest listed companies first.
What is the deadline for ESG reporting?
You must publish your ESG report within five months of your financial year-end, alongside your annual report.
What are the penalties for not complying?
While there are no direct government fines yet, the HKEX can issue public warnings or reprimands. More importantly, failing to report properly can damage your brand reputation, hurt your stock price, and cause you to lose investor confidence.
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