The 2025–2028 timeline
Last reviewed: 6 August 2026. Key checks and changes in this review are listed below.
Changes in this review
- Confirmed the 2025 Scope 1 and Scope 2 requirements and the 2026 LargeCap mandatory Part D milestone.
- Added the continuing-obligation rule for issuers that later leave the LargeCap index.
- Added HKEX proportionality language on reasonable and supportable information available without undue cost or effort.
- Kept the 2028 HKFRS S1/S2 application direction clearly labelled as subject to consultation and phasing decisions.
| Timing | Who | Position |
|---|---|---|
| Financial years starting 1 Jan 2025 | All Main Board and GEM issuers: mandatory Scope 1 and Scope 2. Main Board: remaining Part D requirements on comply-or-explain. GEM: voluntary, encouraged. | In force |
| Financial years starting 1 Jan 2026 | Hang Seng Composite LargeCap Index constituents: all Part D climate requirements mandatory. Once subject, an issuer remains subject even if it later leaves the index. Proportionality mechanisms include reasonable and supportable information available without undue cost or effort. | In force |
| 1 Aug 2025 | HKFRS S1 and HKFRS S2 became effective as Hong Kong standards fully aligned with IFRS S1/S2. Effective does not by itself mean every company is mandated to apply them. | Standards available |
| Expected financial years starting 1 Jan 2028 | First phase of listed entities expected to report under Hong Kong Sustainability Disclosure Standards, subject to consultation and phasing decisions. | Roadmap, not final mandate |
Important distinction
HKEX Appendix C2 is the present listing obligation. HKFRS S1/S2 set the ISSB-aligned architecture and the 2028 direction. The precise entities and phasing for mandatory HKFRS S1/S2 reporting remain subject to consultation.
Current position for listed issuers
Part D of the ESG Reporting Code is structured around governance, strategy, risk management, and metrics and targets. For climate disclosures, the investor-focused test is whether a risk or opportunity could reasonably be expected to affect cash flows, access to finance or cost of capital over the short, medium or long term.
HKEX also requires a board statement covering oversight, management approach and strategy, and how progress against goals and targets is reviewed. From financial years beginning in 2025, issuers must provide additional information about climate governance structures, processes, controls and procedures.
Do not treat “comply or explain” as optional
An explanation should identify the provision, why it has not been met, what the company is doing, and—where possible—when fuller disclosure is expected. Boilerplate explanations create regulatory and investor risk without improving readiness.
HKFRS S1 and HKFRS S2
HKFRS S1 covers sustainability-related financial information generally; HKFRS S2 focuses on climate-related disclosures. Both are fully aligned with the corresponding ISSB standards and are designed to connect sustainability information with the financial statements and general-purpose financial reporting.
The Government roadmap envisages large publicly accountable entities fully adopting ISSB-aligned standards no later than 2028. HKICPA guidance states that a public consultation is intended for phased mandatory application by listed public-accountability entities, with an expected first effective date of 1 January 2028.
Design implication
A system built only to complete this year’s HKEX checklist may need expensive rework. Build ownership, controls, time horizons, financial-effects analysis and evidence retention with S1/S2 connectivity in mind.
Private companies and multinational groups
There is no general Hong Kong law requiring every private company to publish a sustainability report. In practice, customer questionnaires, tenders, lenders, private-equity diligence, parent-company consolidation and overseas reporting requirements often create strong commercial obligations.
- Private Hong Kong company: report to the actual audience and contractual ask; do not copy an 80-page listed-company report by default.
- Hong Kong subsidiary of a multinational: align boundaries, definitions and evidence with group requirements and overseas regulations.
- Financial institution: consider sector-specific regulatory expectations as well as the broader 2028 roadmap.
What management should do now
- Confirm the applicable reporting basis and boundary.
- Assign board, management and data-owner responsibilities.
- Map Part D and HKFRS S2 gaps against existing processes.
- Document Scope 1 and Scope 2 methodology and controls.
- Screen Scope 3 categories and climate exposures rather than waiting for perfect data.
- Build finance involvement into financial-effects analysis and control design.
- Retain evidence as though selected disclosures may later be assured.