Update of HKEX ESG Code

On 19 April 2024, the HKEX announced amendments to the Environmental, Social and Governance (“ESG”) Reporting Code. The changes are effective for financial years commencing on or after 1 January 2025 of HKEX-listed companies.

Key changes of ESG Code

1. Requires enhanced disclosure in the ESG report on governance process, strategy, risk management and targets relating to climate risk and opportunities. (Note: GEM-listed issuers may have a reduced disclosure scope.)

2. Mandatory reporting of direct/indirect greenhouse gas (“GHG”) emissions.

3. Listed issuers shall comply or explain non-disclosures (including reliance on HKEX implementation reliefs).

Our recommended actions

Listed issuers should consider the following preparatory actions for their ESG report:

1. Dedicate a new or existing board committee (e.g. a separate Climate Committee) to be in charge of oversight of climate-related risks and opportunities;

2. Devise a group strategy for managing climate risks and opportunities;

3. Prepare/update climate risk policy with qualitative/quantitative targets (e.g. GHG emissions); and

4. Ascertain and manage GHG emissions internally and in relation to suppliers and customers (e.g. via surveys and contracts).

   
   

Remarks: The information provided in this statement does not, and is not intended to, constitute legal advice.

Contributors: Partner Ms. Grace Law and Assistant Solicitor Ms. Vivian Luk