The Institute of Certified Public Accountants (HKICPA) has developed a new model that calls for climate-related reporting standards for companies that closely match the standards issued by the International Sustainability Standards Board (ISSB) of the foundation. . The proposed standards, HKFRS S1 and HKFRS S2, are scheduled to take effect in August 2025. The move follows the Hong Kong Government’s “Vision Statement for the Development of the Hong Kong’s Sustainable Reporting Ecosystem”, which aims to align the region with international reporting standards. Activities Earlier this year, the government directed the HKICPA to develop local sustainability reporting standards in line with ISSB standards. This pressure for adaptation includes listed companies and organized financial institutions such as banks, fund managers and insurance companies. In addition, the government plans to publish a road map later this year, which will outline a clear path for sustainable reporting requirements for businesses in Hong Kong. The ISSB was launched at the COP26 climate conference in November 2021 and aims to develop IFRS standards for sustainability assurance. The purpose of these standards is to inform investors of the problems and opportunities associated with the company’s life. In June 2023, ISSB will publish reporting standards for public health (IFRS S1) and climate (IFRS S2). In response, the International Organization of Securities Commissions (IOSCO) encouraged regulators to incorporate these standards into their compliance frameworks.
HKICPA’s proposal to harmonize its standards with IFRS S1 and S2 is based on extensive stakeholder consultation and a technical feasibility study completed in June 2024. HKICPA Chairman Roy Leung emphasized the importance of the new standards to be consistent with Hong Kong’s reporting practices. With a global platform, increasing consistency and comparability for investors. According to Leung, adopting these standards will meet investors’ needs for reliable sustainability information. ISSB Vice Chairman Jingdong Hua welcomed the reform initiative, saying it would allow investors to compare the performance of Hong Kong companies with international peers. The HKICPA is inviting public feedback on the proposed standards, and a comment period is open until 27 October 2024. The university believes that fully aligning with ISSB standards will strengthen Hong Kong’s position in global capital markets and its relationships with businesses in mainland China and other regions.