International Sustainability Standards Board (ISSB) is the independent standard-setting body set up by the IFRS Foundation. It was formally launched on 3 November 2021, at COP26 in Glasgow.  After 20 months, ISSB issued its finalised global Sustainability Disclosure Standards – IFRS S1 and IFRS S2 (the Standards).

Hong Kong’s current ESG rules and regulations are contained within the ESG Reporting Guide (Appendix 27 of the Main Board Listing Rules and Appendix 20 of the GEM Rules). In April this year, Hong Kong Exchanges and Clearing Ltd (HKEX) launched a consultation (Enhancement of Climate-related Disclosures under the ESG Framework) proposing, among other things, to rename the ESG Reporting Guide the ESG Reporting Code (Code). The consultation also proposed a significant upgrading of the current requirements relating to climate-related disclosure to align Hong Kong’s regime with the new IFRS S2 Standard.

Dr Agnes KY Tai, Chief EC.ESG Investment Strategist at BlueOnion, points out that S1 has already largely been embedded in Appendix 27 as Hong Kong has been aligning with the TCFD approach for some time. The HKEX consultation closely follows S2, summarising key points and replicating some of the language, but there are differences.

The target for HKEX to adopt the first two reporting years following the effective date of 1 January 2024.  The respresentative from HKEX said they will post the consultation conclusion before end of this year.  Let's keep an eye on this.