Produce your HKFRS (Hong Kong) sustainability reports with Speeki.

HKFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and HKFRS S2 Climate-related Disclosures were published by the Hong Kong Institute of Certified Public Accountants (HKICPA) in December 2024, with both standards fully aligned with the International Sustainability Standards Board's IFRS S1 and S2 standards and an effective date of August 1, 2025.

HKFRS S1 requires entities to disclose information about all sustainability-related risks and opportunities that could reasonably be expected to affect the entity's cash flows, access to finance, or cost of capital over the short, medium or long term, while HKFRS S2 addresses climate-related disclosures specifically, incorporating industry-based guidance derived from Sustainability Accounting Standards Board (SASB) Standards. Both standards will be applicable for publicly accountable enterprises, including listed entities, and regulated financial institutions in Hong Kong such as banks, fund managers, insurance companies and Mandatory Provident Fund trustees.

Speeki is here to help you tackle HKFRS sustainability reporting and disclosure compliance.

Use the Speeki platform to prepare your entire sustainability programmes and produce the reports necessary for HKFRS S1 and S2.

You can even use the Speeki platform to track all your carbon emissions including Scope 1, 2 and 3 according to the GHG protocol.

The Speeki platform is online, hosted and requires minimal setup. The platform is Ai enabled with our agent, Nicole®, who helps automate many tasks within your platform saving you time and effort.


HKFRS S1

HKFRS S1 - General Requirements: The standard covers general requirements for disclosure of sustainability-related financial information and requires an entity to disclose information about all sustainability-related risks and opportunities that could reasonably be expected to affect the entity's cash flows, its access to finance, or cost of capital over the short, medium or long term.

HKFRS S2

HKFRS S2 - Climate-related Disclosures: The standard addresses climate-related disclosures and includes industry-based guidance on implementing IFRS S2 climate-related disclosures.

The guidance suggests possible ways to identify, measure and disclose information about climate-related risks and opportunities that are associated with business models, economic activities, and other common features that characterize participation in the industry, with guidance derived from Sustainability Accounting Standards Board (SASB) Standards.

  • Speeki's Carbon Lens module within the Speeki platform is a full carbon accounting system that can build your entire carbon emissions calculations across Scope 1,2 and 3.

  • Speeki has the total solution for HKFRS climate reporting including tracking all your sustainability efforts beyond just carbon tracking.

Speeki: your comprehensive solution to meet HKFRS and more.

Speeki offers comprehensive support for all relevant and emerging HKFRS sustainability disclosure standards while addressing the challenges of building your sustainability initiatives.

Speeki helps build your climate and other ESG programmes within the Speeki platform and then allows you to extract that data into any format according to any standard, including HKFRS.

Environmental issues covered by HKFRS S1 and S2

HKFRS S1 and S2 cover several environmental issues, each managed through separate programmes within the Speeki platform.

These include climate change, with a focus on nature and GHG emissions – using our GHG accounting tools to track your emissions.

Nature and biodiversity issues, such as pollution, resource scarcity, and biodiversity loss, are also addressed through specific programmes in Speeki.

Social issues covered by HKFRS S1 and S2

HKFS S1 and S2 address some social matters, all of which are covered within the Speeki platform.

We have programmes set aside for workplace issues (labour practices), human rights, health and safety, supply chain management, and community relations.

Speeki has all of the above topics covered in the Speeki platform and you can build your programmes in the platform.

Governance issues covered by HKFRS


HKFRS cover several governance aspects, including board diversity, executive compensation, anti-corruption, and data privacy.

Speeki encompasses all these issues, allowing you to build and document your entire corporate governance system, including board management, anti-bribery, privacy, and whistleblowing programmes.

General sustainability strategy covered in HKFRS S1

Materiality: Implement and document your materiality assessment with Speeki. Future updates will include AI-generated assessments.

Governance:
Track sustainability governance using the platform's dedicated feature.

Strategy:
Outline your approach to sustainability-related risks and opportunities, including scenarios and targets.

Risk management:
Document your sustainability-related risk processes following ISO 31000 best practices.

Speeki offers solutions for your HKFRS S1 and S2 reporting.

Speeki will help you streamline your reporting process with HKFRS S1 and S2, supporting the entire reporting process with powerful features like GHG emissions accounting and general sustainability reporting.

Is Hong Kong leading in sustainability?

This leads Hong Kong to be among the first jurisdictions to align the local sustainability disclosure requirements with the ISSB Standards, positioning Hong Kong as a leader in global sustainability reporting standards adoption and reinforcing its role as an international financial center.

Why are HKFRS S1 and S2 important for Hong Kong companies?

HKFRS S1 and S2 are critically important for Hong Kong companies for several strategic, regulatory, and competitive reasons:

Regulatory Compliance and Legal Requirements


Mandatory Implementation Timeline: Under Hong Kong's roadmap, companies listed on the Hong Kong Stock Exchange are already required to disclose Scope 1 and 2 GHG emissions starting January 1, 2025, under the 'New Climate Requirements' aligned with IFRS S2. All Main Board issuers will be required to begin reporting against the IFRS S2 Climate-related Disclosures on a "comply or explain" basis in 2025, with large cap issuers to begin on a mandatory basis in 2026, and the HKEX to subsequently consult on mandating sustainability reporting against the new Hong Kong Standards, with an expected date for all listed publicly accountable entities (PAEs) no later than 2028. This creates a clear regulatory obligation that companies must prepare for.

Global Market Access and Competitiveness

International Alignment: The HKFRS SDS are fully aligned with the lSSB Standards, and this is critical to maintaining and enhancing Hong Kong's competitiveness in international capital markets. The Institute believes that Hong Kong's full convergence with the ISSB Standards has global significance as it would bolster the connection of global capital with local businesses as well as those in Mainland China and other regions. This alignment ensures Hong Kong companies can compete effectively in global markets where sustainability reporting is increasingly standard.

Investor Expectations: HKFRS S1 and S2 are crucial in aligning Hong Kong's sustainability reporting with the global baseline. By enhancing consistency and comparability, these standards will better meet the needs of investors seeking reliable sustainability information. International investors increasingly require standardized sustainability information to make informed investment decisions.

Strategic Positioning and Business Benefits

Early Adopter Advantage: It provides a pathway for large PAEs to fully adopt the ISSB Standards no later than 2028, leading Hong Kong to be among the first jurisdictions to align the local sustainability disclosure requirements with the ISSB Standards. Companies that adopt these standards early gain competitive advantages in attracting ESG-focused investors and partners.

Standardized Framework: The HKFRS SDS provide a standardized framework for enhancing the consistency and comparability of corporate sustainability reports. This eliminates confusion from multiple reporting frameworks and provides clear guidance for companies on what information to disclose and how to present it.

Financial and Risk Management Benefits

Enhanced Risk Management: The standards require companies to identify, assess, and disclose climate-related and sustainability risks that could affect their financial performance, helping companies better understand and manage these risks proactively.

Access to Capital: As global capital increasingly flows toward sustainable investments, companies with robust sustainability reporting under internationally recognized standards like HKFRS S1 and S2 will have better access to capital markets and potentially lower financing costs.

Regional Hub Strategy

Gateway to China: Hong Kong's role as a financial gateway to Mainland China means that companies operating there will need to meet international sustainability standards to facilitate cross-border business and investment. The alignment with ISSB standards positions Hong Kong companies to serve as intermediaries for Chinese businesses seeking international capital.

Asian Financial Center: The HKICPA will continue to work closely with other stakeholders in the areas of sustainability assurance, data and technology as well as skills and competencies to create an enabling environment for the successful implementation of the HKFRS SDS and to contribute towards the development of a comprehensive sustainability disclosure ecosystem in Hong Kong. This reinforces Hong Kong's position as Asia's leading sustainable finance hub.

How does HKFRS sustainability standards relate to other sustainability standards and how does Speeki meet this issue?

HKFRS S1 and S2 are fully aligned with the IFRS Sustainability Disclosure Standards (ISSB Standards), which themselves consolidate and build on the work of market-led reporting initiatives—comprising the Climate Disclosure Standards Board (CDSB), the Task Force for Climate-related Financial Disclosures (TCFD), the Value Reporting Foundation's Integrated Reporting Framework and the Sustainability Accounting Standards Board (SASB).

Why should companies do this if they are technically out of scope?

Companies should consider following HKFRS even if they are technically out of scope for several compelling strategic and business reasons:

Supply Chain Pressure and Expectations: Whether your organization falls the reporting mandatory scope or is voluntarily reporting to align with stakeholders who must report and have heightened expectations for the supply chain – these new standards may still impact you. Even companies who don't meet the threshold themselves will need to know a certain amount of information because they will sit within the supply chain of an organization affected by the rules. This creates a cascading effect where larger companies will increasingly demand sustainability data from their suppliers and partners.

Future-Proofing and Market Position: Even companies who do not fall under the mandated scope, they should look to embark on emission accounting if they have not already. There will be increased demand for value chain emission data, spilling over to smaller companies, who in turn must disclose their own emissions data. Early adoption positions companies advantageously as the reporting framework expands to cover more entities in subsequent phases.

Investor and Stakeholder Confidence: This is an important first step for Hong Kong to introduce standardized reporting requirements in Hong Kong, providing investors with consistent and transparent information for their investment decisions. Voluntary compliance demonstrates proactive governance and transparency, which increasingly influences investment decisions, customer preferences, and business partnerships.

How does HKFRS S1 define materiality in the context of sustainability?

HKFRS defines materiality following the same approach as the international IFRS S1 and S2 standards, which it is aligned with.

All disclosures required by IFRS S1 and IFRS S2 are subject to an assessment of materiality. The International Accounting Standards Board's (IASB) definition of material information and primary users is consistent with the Conceptual Framework for Financial Reporting (Conceptual Framework). IFRS S1 uses definitions and requirements that are consistent with the IASB's Conceptual Framework, IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

Financial Materiality Focus: IFRS S1 and S2 are focused on financially material environmental, social, and governance (ESG) risks and opportunities that affect the overall bottom line. This represents a "single materiality" approach focused on financial impacts to the entity, as opposed to the "double materiality" concept used in some other frameworks like the European CSRD.

Specific Definition: HKFRS requires entities to disclose information about sustainability-related risks and opportunities that could reasonably be expected to affect the entity's cash flows, its access to finance or cost of capital over the short, medium or long term. Information is considered material if omitting or misrepresenting it can impact investors' decision-making.

Assessment Requirements: Assessment and disclosure of material climate-related risks and opportunities affecting entities business model and value chain including the effect on financial position, financial performance and cash flows. Financial materiality needs to be determined. These insights are sought by the investment community: Determining how business' sustainability actions could introduce climate-related risks or opportunities capable of affecting financial performance is crucial for transparent HKFRS reporting.

Practical Application: Companies must conduct a materiality assessment to determine which climate-related risks and opportunities are most relevant to their business, engaging with stakeholders, analyzing industry trends, and assessing the potential financial impact of these climate-related risks. This assessment is fundamental to determining what information must be disclosed under HKFRS, ensuring that companies focus their reporting on sustainability matters that have genuine financial relevance to investors and other capital providers.

The materiality definition under HKFRS is therefore investor-focused and financially-oriented, requiring companies to identify and disclose sustainability-related information that could reasonably be expected to influence economic decisions about providing resources to the entity.

How does HKFRS address governance and climate strategy?

HKFRS S1 and HKFRS S2 include reporting requirements across four content areas: governance; strategy; risk management; and metrics and targets. These core content areas are consistent with the TCFD's recommendations. HKFRS S2 focuses specifically on climate-related disclosures and covers governance of climate issues, strategy alignment with climate risks and opportunities, scenario analysis, metrics (including Scope 1, 2, and 3 emissions), and progress toward climate-related targets.

What are the key challenges companies may face in collecting and reporting the data required by HKFRS S1 and S2?

Failing to use an automation platform like Speeki or choosing one that is ONLY focused on reporting. Speeki is a broader Sustainability Management System and allows you to build programmes across 20 different sustainability topics.

Produce your sustainability reports following HKFRS S1 and S2 with Speeki.

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IFRS S1 & S2 ready
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CSRD ready
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ESRS ready