international ESG reporting standards Standards Explained for Hong Kong Companies

If your company is listed on the Hong Kong Stock Exchange — or does business with companies that are — you've likely heard about international ESG standards. The international sustainability standards has created the global benchmark for sustainability disclosures, and Hong Kong has moved quickly to adopt it. In this guide, we break down international ESG standards for Hong Kong companies in plain English: what they are, what they require, and what you need to do to comply.

What Is the international ESG standards?

The international sustainability standards was established by the the international standards body in November 2021 at COP26 in Glasgow. Its mission is to create a single, global baseline of sustainability disclosure standards — much like the financial accounting standards provide a common language for financial reporting.

The international ESG standards absorbed the work of several predecessor frameworks, including the Task Force on Climate-related Financial Disclosures (TCFD), the Sustainability Accounting Standards Board (SASB), the Climate Disclosure Standards Board (CDSB), and the Integrated Reporting Framework. This consolidation means companies no longer need to navigate multiple overlapping frameworks — international ESG standards provide one unified standard.

In June 2023, the international ESG standards published its first two standards: international ESG reporting standards and international ESG reporting standards. These took effect for annual reporting periods beginning on or after 1 January 2024.

international ESG reporting standards: General Sustainability Disclosures

international ESG reporting standard — General Requirements for Disclosure of Sustainability-related Financial Information is the foundational standard. It requires companies to disclose information about all significant sustainability-related risks and opportunities that could reasonably be expected to affect the company's cash flows, access to finance, or cost of capital over the short, medium, or long term.

Key requirements of international ESG reporting standards:

• Governance: Disclose the governance processes, controls, and procedures used to monitor and manage sustainability-related risks and opportunities
• Strategy: Explain how sustainability-related risks and opportunities affect the business model, value chain, strategy, and decision-making, including financial impacts
• Risk Management: Describe the processes for identifying, assessing, prioritising, and monitoring sustainability-related risks
• Metrics and Targets: Disclose performance metrics and any targets set by the company for sustainability matters

The international ESG reporting standard is deliberately broad — it covers all significant sustainability topics, not just climate. This means water stewardship, biodiversity, labour practices, supply chain ethics, and other material ESG topics fall within its scope.

international ESG reporting standards: Climate-Related Disclosures

international ESG reporting standard — Climate-related Disclosures zooms in on climate specifically. It builds on the TCFD framework's four-pillar structure (Governance, Strategy, Risk Management, Metrics & Targets) but adds more prescriptive requirements, especially around emissions measurement.

What The international ESG reporting standard specifically requires:

• Scope 1 emissions: Direct greenhouse gas emissions from sources the company owns or controls (e.g., company vehicles, on-site fuel combustion)
• Scope 2 emissions: Indirect emissions from purchased electricity, heat, or steam
• Scope 3 emissions: All other indirect emissions in the value chain — including purchased goods and services, business travel, employee commuting, and use of sold products. (Scope 3 is required with a one-year transition relief period.)
• Climate scenario analysis: Assessment of the company's climate resilience using at least two scenarios, including a scenario where global warming is limited to 1.5°C
• Transition plans: Disclosure of any climate-related transition plans the company has adopted
• Cross-industry metrics: Standardised metrics including absolute and intensity-based GHG emissions, internal carbon prices, and percentage of executive compensation linked to climate considerations

How HKEX Adopted international ESG standards

Hong Kong has been one of the most proactive jurisdictions in adopting international ESG standards. The HKEX updated its ESG reporting framework to align with international ESG standards, making climate disclosures mandatory for listed companies.

Phased implementation timeline:

• Main Board issuers — Large issuers (market cap > HK$7.5 billion): Mandatory climate disclosures aligned with international ESG reporting standards from financial years beginning on or after 1 January 2025
• Main Board issuers — Other issuers: Mandatory climate disclosures from financial years beginning on or after 1 January 2026
• Scope 3 emissions: Phased in with "comply or explain" provisions initially, then becoming mandatory

This means that every Hong Kong listed company will need to produce ESG standards-aligned climate disclosures. The HKEX rules go beyond voluntary best practice — they are mandatory listing rule requirements enforced by the exchange.

What Companies Must Report Under international ESG standards

Under the HKEX-aligned international ESG standards requirements, companies need to prepare disclosures that cover the four core areas. Practically, this means producing:

• A climate risk assessment identifying physical risks (e.g., extreme weather, sea-level rise) and transition risks (e.g., policy changes, technology shifts, market changes)
• Quantified Scope 1, 2, and 3 GHG emissions data using the GHG Protocol methodology
• A climate scenario analysis demonstrating how the business performs under different warming pathways
• Governance disclosures showing board-level oversight of climate issues
• Metrics and targets with baseline years and progress tracking

Importantly, these disclosures must be presented alongside the financial statements and subject to internal controls and, in many cases, external assurance.

Practical Steps for international ESG standards Compliance

If your company needs to comply, here's a practical roadmap:

1. Conduct a gap assessment: Compare your current ESG disclosures against international ESG reporting standards requirements to identify what's missing
2. Build internal capacity: Train your team — or hire professionals — who understand international ESG standards, the GHG Protocol, and HKEX reporting requirements
3. Collect emissions data: Establish systems for measuring Scope 1 and 2 emissions immediately. Begin mapping Scope 3 categories and engaging suppliers
4. Perform climate scenario analysis: Use recognised scenarios (e.g., from the IPCC or NGFS) to assess business resilience
5. Establish governance: Ensure your board and senior management understand and oversee climate-related risks and opportunities
6. Prepare the disclosure: Draft the climate-related disclosures in the required format, aligned with the four-pillar structure
7. Plan for assurance: As assurance requirements phase in, ensure your data and processes can withstand external audit

How Peak M&S Education Centre Can Help

Understanding international ESG standards is not just for listed companies — it's essential knowledge for any professional working in compliance, finance, or sustainability in Hong Kong. Our ESG Sustainable Solutions 4.0 course covers international ESG reporting standards in depth, along with HKEX reporting requirements, carbon accounting (GHG Protocol Scope 1–3), and practical implementation strategies.

Taught by experienced industry practitioners, our weekend course gives you the knowledge and confidence to handle international ESG standards compliance — whether for your own company or as a professional service. And with government training subsidies available, getting certified is more affordable than you might think.

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