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Climate change: Hong Kong-listed companies aren’t yet ready for stock exchange’s new environmental risk disclosure rules, Grant Thornton report finds
- There is a gap between their ESG reporting and climate disclosure rules expected to come into effect as early as January, says the accounting giant
- Only a handful of them made quantitative disclosures of the impact of climate risks and opportunities on the finances of the company, it found
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Yujie Xuein Shenzhen
There is still a gap between the environmental, social and governance (ESG) reporting of Hong Kong-listed companies and new mandatory climate-related disclosure rules expected to come into effect as early as January, according to accounting firm Grant Thornton.
Companies need to accelerate their ESG strategies and reporting, while the stock exchange should provide more support to help listed firms overcome challenges arising from the introduction of the tougher requirements, it said on Friday.
“We opine that [bourse operator] HKEX should publish a detailed implementation guide for the upcoming revised disclosure rules and provide more support to small and medium-sized enterprises which generally lack the resources to comply with the new disclosure requirements,” said Eugene Ha, deputy managing partner of Grant Thornton Hong Kong, in a statement that accompanied a report looking into the issue.
In April, Hong Kong Exchanges and Clearing (HKEX) published a consultation paper in which it proposed making it compulsory for all listed companies in Hong Kong to provide climate-related disclosures in their ESG reports starting in 2025 covering financial years beginning on or after January 1, 2024.
The proposed new disclosure rules are based on the Climate Standard of the International Sustainability Standards Board which is built on Task Force on Climate-related Financial Disclosures recommendations.
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The new requirements include quantifying the financial effects of climate-related risks and opportunities, and disclosing so-called Scope 3 greenhouse gas emissions. That refers to all indirect emissions that occur in the value chain of a company, including those attributable to suppliers and customers.
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