Financial Services and the Treasury Bureau (FSTB)’s Post

【Hong Kong’s Sustainable Disclosure Roadmap Released】 The Government has unveiled a roadmap on sustainability disclosure in Hong Kong, outlining the adoption of the International Financial Reporting Standards - Sustainability Disclosure Standards (ISSB Standards) for publicly accountable entities, with a clear path to full implementation by 2028. This initiative aims to enhance market transparency and drive sustainable finance development. Key Highlights: ✅ Developing Hong Kong Standards: The Hong Kong Institute of Certified Public Accountants (HKICPA) is developing the Hong Kong Standards on a full alignment basis with the ISSB Standards.  The final version is set to be issued by the end of this year and will take effect on August 1, 2024. ✅ New Climate Disclosure Requirements: January 2024: Main Board issuers must disclose climate-related information on a "comply or explain" basis. January 2026: Hang Seng LargeCap Index constituents must adopt mandatory climate disclosures. January 2028: The Hong Kong Exchanges and Clearing Limited (HKEX) plans to implement mandating sustainability reporting for all issuers. ✅ Application for Financial Institutions: By 2028, key financial institutions, including non-listed PAEs, will also need to adopt the Hong Kong Standards. Comprehensive Ecosystem Blueprint: 🔹 Sustainability Assurance: High-quality assurance and international standards will be promoted by the Accounting and Financial Reporting Council (AFRC). 🔹 Data & Technology: Free data tools, green fintech, and expanding the Hong Kong Taxonomy for Sustainable Finance. 🔹 Skills and competencies: Ongoing alignment with ISSB standards and support for local and international capacity building. Secretary Christopher Hui, said, "As a premier international financial centre as well as a green and sustainable finance hub, Hong Kong is taking consistent steps to consolidate its competitiveness through observing international standards and best practices. The launch of this roadmap on the full adoption of the ISSB Standards clearly highlights our commitment to continuing to play a leading role in facilitating green and sustainable financing and investment for the global agenda of green transition. This roadmap provides a transparent and well-defined pathway on sustainability reporting for PAEs in Hong Kong. The Financial Services and the Treasury Bureau (FSTB) in collaboration with financial regulators and stakeholders will continue to support the pragmatic implementation of the Hong Kong Sustainability Disclosure Standards (Hong Kong Standards) through enhancing capacity building and promoting the use of technological solutions." Roadmap on Sustainability Disclosure in Hong Kong https://lnkd.in/g3CdyUwC

The European Securities and Markets Authority, ESMA, the EU’s financial markets regulator and supervisor, has published its Final Report on the Guidelines on Enforcement of Sustainability Information (GLESI) and a Public Statement on the first application of the European Sustainability Reporting Standards (ESRS). Notably, the GLESI and the public statement highlight the importance of the oversight function of the audit committee as well as the responsibilities of the administrative, management, and supervisory bodies of issuers. This is quiet important as ESMA advise issuers to ensure that (i) the sustainability statement is internally consistent and consistent with the other components of the annual financial report (ii) implement and supervise internal controls; and ultimately (iii) contribute to the development of an effective sustainability statement. Note - These three pieces of advice are comparable to how financial information is assured to be consistent, complete, and controlled internally by a proper oversight body. As a means of supporting the implementation, it is of particular relevance in preparing ESRS sustainability statements that reporting entities: - Assuring high-quality sustainability reporting through governance arrangements and internal controls; - Designing and conducting the double materiality assessment correctly and being transparent about the process; - Using transitional relief in a transparent manner; - Preparing a sustainability statement that is clearly structured and digitalizable; and - Establishing a link between financial and sustainability information (note appendix C). Importantly (which I think should be even more highlighted as it is here companies will have their opportunities and “ESG RnD”) is that issuers should engage in continual training on the ESRS topics, and engage in dialogue with industry peers on topics of common interest to ease and atreamlign their approaches and thers materiality assessments. Being more collaborative enhance industry standards and norms and also reduce the anxiety of over- og underreporting. Furthermore, it lowers assurance costs if processes are streamlined and it may bring value for the issuer to go into these dialouges with peers.

Big news today: The HK government on Monday issued a vision statement on developing a sustainability disclosure ecosystem, as part of efforts to further develop the SAR into an international green finance centre. The vision statement outlines that the Government and financial regulators aim for Hong Kong to be among the first jurisdictions to align local sustainability disclosure requirements with the International Financial Reporting Standards Sustainability Disclosure Standards (ISSB Standards).   Another key point is that Government will adopt a holistic approach in developing local sustainability disclosure standards and a local sustainability disclosure ecosystem.   Assuming the role of sustainability reporting standard setter in Hong Kong, the Hong Kong Institute of Certified Public Accountants will develop local sustainability reporting standards (Hong Kong Standards) which are aligned with the ISSB Standards, as well as complementary application and implementation guidance. Noman AliLuthfiyah KhanHui Feng ZhangJonathon LeeSharon Leung The link of the original statement: https://lnkd.in/gqNQb9SB

EU markets regulator European Securities and Markets Authority (ESMA) issues recommendations to improve sustainable finance regulatory framework: ·      Basic sustainability disclosures for all financial products – even those without a sustainability objective ·      Regulation of ESG data products ·      Creation of “Sustainability” and “Transition” investment product categories ·      and more… #sustainablefinance #sustainableinvesting #ESGinvesting #ESGdata #ESGreporting

International Sustainability Standards Board (ISSB), aims of developing a global baseline of sustainability standards, in 2023, issued its first two sustainability disclosure standards. These are: ·      IFRS S1 General Requirements for Disclosure of Sustainability-Related Financial Information; and; ·      IFRS S2 Climate-related Disclosures. IFRS S1 summarizes;  ·      Governance  ·      Strategy  ·      Risk management  ·      Metrics and targets IFRS S2 focuses on;  ·      Physical risks, and ·      Transition risks. It is expected that the subsequent phases will be rolled out in January 2026 and 2027. Following the importance, SECP has issued guidelines to promote responsible business practices and environmental stewardship with issuance of ESG voluntary disclosure for listed companies, following amendment in the Listed Companies Code of Corporate Governance Regulations, 2019. The role of the regulator has been commendable thus far, serving as a critical litmus test for Listed Companies. Moving forward, it is essential that these companies not only comply with the prescribed standards but also embrace the underlying principles in both spirit and practice. It is anticipated that Non-Listed Companies will also come under the regulatory framework in the near future, ensuring broader compliance and fostering a more robust corporate governance environment. This will ensure sustained transparency, accountability, and overall market confidence. SECPSustainable Banking and Finance Network (SBFN)IFRS FoundationInternational Sustainability Standards Board (ISSB)

The HKSAR Government Launches Roadmap on Sustainability Disclosure in Hong Kong On December 10, the HKSAR Government launched a roadmap on sustainability disclosure in Hong Kong. The roadmap sets out Hong Kong's approach to require publicly accountable entities (PAEs) to adopt the International Financial Reporting Standards - Sustainability Disclosure Standards (ISSB Standards). It provides a well-defined pathway for large PAEs to fully adopt the ISSB Standards no later than 2028. The Secretary for Financial Services and the Treasury, Mr Christopher Hui, said, "As a premier international financial centre as well as a green and sustainable finance hub, Hong Kong is taking consistent steps to consolidate its competitiveness through observing international standards and best practices. The launch of this roadmap on the full adoption of the ISSB Standards clearly highlights our commitment to continuing to play a leading role in facilitating green and sustainable financing and investment for the global agenda of green transition. This roadmap provides a transparent and well-defined pathway on sustainability reporting for PAEs in Hong Kong. The Financial Services and the Treasury Bureau (FSTB) in collaboration with financial regulators and stakeholders will continue to support the pragmatic implementation of the Hong Kong Sustainability Disclosure Standards (Hong Kong Standards) through enhancing capacity building and promoting the use of technological solutions." Key points of the roadmap are as follows: 1. The Hong Kong Institute of Certified Public Accountants (HKICPA) is developing the Hong Kong Standards on a full alignment basis with the ISSB Standards. Following a public consultation on the Exposure Drafts which indicates general support, the HKICPA aims to issue the final Hong Kong Standards by the end of this year with an effective date of August 1 next year. 2. All Main Board issuers are required to disclose against the New Climate Requirements modelling on International Financial Reporting Standards S2 Climate-related Disclosures on a "comply or explain" basis starting from January 1 next year. Issuers that are Hang Seng Composite LargeCap Index constituents (Large Cap Issuers) are further required to disclose against the New Climate Requirements on a mandatory basis starting from January 1, 2026. The Hong Kong Exchanges and Clearing Limited (HKEX) will consult the market in 2027 on mandating sustainability reporting against the Hong Kong Standards for listed PAEs with an expected effective date of January 1, 2028, under a proportionate approach. 3. Relevant financial regulators will require financial institutions carrying a significant weight (being non-listed PAEs) to apply the Hong Kong Standards no later than 2028.

Read our latest ESG regulatory round-up which highlights the key UK, EU and international financial services regulatory developments that took place during Q1 2024. We cover the ESG priorities set out in the FCA’s Business Plan for 2024/2025, the Transition Finance Market Review call for evidence, the latest position on the EU Corporate Sustainability Due Diligence Directive, and more. #ESG #SustainableFinance #FinancialServices #Sustainability #Regulation

Read our latest ESG regulatory round-up which highlights the key UK, EU and international financial services regulatory developments that took place during Q1 2024. We cover the ESG priorities set out in the FCA’s Business Plan for 2024/2025, the Transition Finance Market Review call for evidence, the latest position on the EU Corporate Sustainability Due Diligence Directive, and more. #ESG #SustainableFinance #FinancialServices #Sustainability #Regulation

【Hong Kong’s Sustainable Disclosure Roadmap Released】 The Government has unveiled a roadmap on sustainability disclosure in Hong Kong, outlining the adoption of the International Financial Reporting Standards - Sustainability Disclosure Standards (ISSB Standards) for publicly accountable entities, with a clear path to full implementation by 2028. This initiative aims to enhance market transparency and drive sustainable finance development. Key Highlights: ✅ Developing Hong Kong Standards: The Hong Kong Institute of Certified Public Accountants (HKICPA) is developing the Hong Kong Standards on a full alignment basis with the ISSB Standards.  The final version is set to be issued by the end of this year and will take effect on August 1, 2025. ✅ New Climate Disclosure Requirements: January 2025: Main Board issuers must disclose climate-related information on a "comply or explain" basis. January 2026: Hang Seng LargeCap Index constituents must adopt mandatory climate disclosures. Sustainability reporting against Hong Kong Standards no later than 2028 Expected effective date for: - Listed companies (phased approach) - Non-listed financial institutions carrying significant weight Comprehensive Ecosystem Blueprint: 🔹 Sustainability Assurance: High-quality assurance and international standards will be promoted by the Accounting and Financial Reporting Council (AFRC). 🔹 Data & Technology: Free data tools, green fintech, and expanding the Hong Kong Taxonomy for Sustainable Finance. 🔹 Skills and competencies: Ongoing alignment with ISSB standards and support for local and international capacity building. Secretary Christopher Hui, said, "As a premier international financial centre as well as a green and sustainable finance hub, Hong Kong is taking consistent steps to consolidate its competitiveness through observing international standards and best practices. The launch of this roadmap on the full adoption of the ISSB Standards clearly highlights our commitment to continuing to play a leading role in facilitating green and sustainable financing and investment for the global agenda of green transition. This roadmap provides a transparent and well-defined pathway on sustainability reporting for PAEs in Hong Kong. The Financial Services and the Treasury Bureau (FSTB) in collaboration with financial regulators and stakeholders will continue to support the pragmatic implementation of the Hong Kong Sustainability Disclosure Standards (Hong Kong Standards) through enhancing capacity building and promoting the use of technological solutions."