A New Era for Climate Policy in Hong Kong

In a groundbreaking move, Hong Kong is set to revolutionize climate risk management within corporate governance. By aligning with the International Sustainability Standards Board’s IFRS S2 framework, the city is solidifying its position as a leader in the Asia-Pacific climate policy arena.

Mandatory Climate Disclosure Coming in 2025

Starting in 2025, the city’s listed companies will be obliged to publish comprehensive climate transition plans. This pivotal policy change propels Hong Kong into the ranks of early global adopters alongside countries like Japan, Singapore, and Australia, showcasing the city’s commitment to sustainability.

A Stark Reality: Lack of Formal Plans

Despite the ambitious regulatory advancements, the MSCI’s APAC Climate Action Progress Report 2025 revealed a concerning gap: not a single company from Hong Kong appeared among the 837 firms in the region that disclosed formal transition plans in 2024. This raises alarms about the readiness of corporations to adopt and communicate actionable decarbonization strategies.

Challenges Ahead for Carbon Market Initiatives

As Hong Kong aspires to become a hub for voluntary carbon trading, significant challenges loom. Concerns around the credibility and quality of carbon credits threaten to undermine this initiative. MSCI has cautioned that inconsistent standards across markets could erode investor confidence in carbon offsets.

The Way Forward: Need for Enhanced Support

While Hong Kong's regulatory framework is rapidly evolving, the report emphasizes that more robust government support is essential to foster a high-integrity carbon market. Without addressing these challenges, the effectiveness of Hong Kong’s climate strategies could be compromised.

Conclusion: A Call for Action

As Hong Kong strides towards a greener future, the need for private sector readiness and effective transition planning has never been more critical. The coming years will determine whether the city can fulfill its ambitious climate goals and set an example for others in the region.