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April 14 (Reuters) – The Hong Kong stock exchange (HKEX)
plans to make it mandatory for companies listed there to make
climate-related disclosures, as the city strives to stay
competitive as a green and sustainable financial centre.
The bourse, which is a unit of Hong Kong Exchanges and
Clearing Ltd, on Friday launched a three-month
consultation over the plan, proposed under its environmental,
social and governance (ESG) framework.
The exchange says mandating all listed companies to make
climate-related disclosures in their ESG reports marks an
upgrade from the existing “comply or explain” regime, according
to the consultation paper.
Issuers are currently permitted to skip such
requirements if they can explain why they can’t comply with
environmental norms.
With the enhanced ESG regime, Hong Kong aims to maintain
competitiveness as an international financial centre and further
strengthen its position as a trusted venue for capital raising,
according to the consultation paper.
Its government has set a target for Hong Kong to become
carbon neutral by 2050 and outlined initiatives to reduce carbon
emissions for a smooth transition to a low-carbon,
climate-resilient economy.
The exchange said its new disclosure regime is aligned with
the International Sustainability Standards Board (ISSB) Climate
Standard, a global framework expected to be finalised by
mid-2023, and will cover four aspects of governance: strategy,
risk management, metrics and targets.
(Reporting by Riya Sharma in Bengaluru and Selena Li in Hong
Kong; Editing by Shinjini Ganguli and John Stonestreet)
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