Governance Briefing — January 1, 2025
Hong Kong-listed issuers start financial years that must align climate disclosures with IFRS S2 equivalents, requiring boards to evidence governance of transition plans, scenario analysis, and financed emissions oversight.
Executive briefing: HKEX’s April 2024 climate disclosure conclusions upgraded Appendix C2 of the ESG Code. For financial years commencing on or after 1 January 2025, all Main Board issuers must provide climate-related disclosures aligned with the International Sustainability Standards Board’s IFRS S2, including granular board oversight narratives.
Key governance signals
- Board governance disclosures broaden. Issuers must describe climate-related governance structures, skill matrices, and how boards oversee strategy, risk, and target progress.
- Transition plans and financed emissions become mandatory for high-impact sectors. Large financial institutions must report financed emissions metrics, while all issuers must detail transition plans, interim targets, and progress.
- Scenario analysis required on a comply-or-explain basis initially. Boards must document the methodologies used and explain any data limitations or why analysis is not yet practicable.
Action checklist
- Mandate board-level climate capability reviews and training to evidence IFRS S2 governance competency.
- Inventory financed emissions data sources, engage external data providers, and set board reporting cadences for transition plan delivery.
- Prepare scenario analysis assumptions, including temperature pathways and revenue sensitivity, and capture board challenge minutes.
Sources
- HKEX Consultation Conclusions on Enhancement of Climate-related Disclosures under ESG Framework
- HKEX ESG Code (Appendix C2) as amended April 2024
Zeph Tech works with Hong Kong boards to operationalise IFRS S2 data governance, scenario analysis controls, and audit committee oversight workflows.