HKEX ESG Code Part D Climate Disclosure: Who Must Report What, and When

Hong Kong listed issuers are already inside the Part D climate disclosure timetable under the ESG Reporting Code in Appendix C2 of the Listing Rules. The rules are phased: every issuer must report Scope 1 and Scope 2 greenhouse gas emissions; Main Board issuers face the wider Part D climate package on a comply-or-explain basis; and Hang Seng Composite LargeCap Index constituents move to mandatory full Part D, including Scope 3, for financial years commencing on or after 1 January 2026.

This operational guide covers who is in scope, what Part D covers, how Scope 1, 2 and 3 differ in practice, and a board checklist for the next cycle.

Who is in scope

Start with issuer type and financial year start date, not with marketing labels.

• All listed issuers (Main Board and GEM)Mandatory disclosure of Scope 1 and Scope 2 greenhouse gas emissions for financial years commencing on or after 1 January 2025.
• Main Board issuersOther Part D climate-related disclosures on a comply-or-explain basis from 2025. That covers the remaining climate content beyond Scope 1 and 2, including governance, strategy, risk management, and metrics and targets where Scope 3 sits.
• GEM issuersScope 1 and 2 are mandatory on the same 2025 timetable. Wider Part D climate disclosure is encouraged on a voluntary basis.
• Hang Seng Composite LargeCap Index constituents throughout the year immediately before the reporting yearMandatory full Part D, including Scope 3, for financial years commencing on or after 1 January 2026.

Index status matters. Mandatory LargeCap status for a reporting year is assessed by whether the issuer was a LargeCap constituent throughout the prior year. Once an issuer enters the mandatory full Part D regime, the obligation continues even if it later leaves the index.

Do not confuse the HKEX Appendix C2 timetable with the voluntary HKFRS S1 and S2 path available through the Hong Kong Institute of Certified Public Accountants. Those standards offer an ISSB-aligned voluntary reporting route. They do not replace Appendix C2 ESG Reporting Code obligations for listed issuers.

What Part D covers (four pillars)

Part D is aligned with the IFRS S2 climate-related disclosure pillars. Issuers need to explain how climate risk and opportunity are governed, how they affect the business, how they are managed, and how progress is measured.

1. GovernanceWho on the board or designated committee owns climate oversight? How does management report up? How are climate matters linked to strategy and decision-making?
2. StrategyWhat climate-related risks and opportunities are material over short, medium and long horizons? How do they affect the business model, value chain and financial planning? Where scenario analysis is relevant, how was it used?
3. Risk managementHow are climate risks identified, assessed, prioritised and integrated into the issuer’s overall risk management process?
4. Metrics and targetsWhat metrics are used, including greenhouse gas emissions, and what targets has the issuer set? How is progress tracked?

For LargeCap issuers under the 2026 mandatory phase, this is the full climate package under Part D. For other Main Board issuers still on comply-or-explain for non-Scope 1/2 content, unexplained gaps still need a clear explanation the board can stand behind.

Scope 1, 2 and 3

Get the scopes right early to avoid rework at drafting stage.

• Scope 1Direct emissions from sources owned or controlled by the issuer (for example fuel in owned boilers, vehicles or process emissions).
• Scope 2Indirect emissions from purchased electricity, steam, heat or cooling. Keep local utility emission-factor versions and method notes with the working papers.
• Scope 3Other value-chain indirect emissions. Material categories differ by business model; data ownership, supplier engagement and estimation methods usually break first here.

Practical sequencing:

1. Lock Scope 1 and 2 boundaries and reconcile them to the financial consolidation perimeter.
2. Document emission factors, activity data, estimation methods and restatement policy.
3. For Scope 3, map material categories first; improve completeness over successive cycles.
4. Keep an audit trail for internal audit, the board committee and any later assurer.

Scope 1 and 2 are already mandatory for FY commencing on or after 1 January 2025. LargeCap issuers facing full Part D from FY commencing on or after 1 January 2026 need Scope 3 systems running during the year, not rebuilt after year-end.

Board checklist

Use this as a short pre-filing review, not as a substitute for the full Code text.

• Confirm whether the issuer is in mandatory Scope 1 and 2 only, Main Board comply-or-explain for wider Part D, or LargeCap mandatory full Part D for the relevant financial year.
• Confirm LargeCap lookback status for the year immediately before the reporting year, and record the conclusion in the working papers.
• Name the board or committee responsible for climate oversight, and check that terms of reference, minutes and information packs match the disclosure draft.
• Require management to table a boundary paper covering Scope 1, 2 and, where applicable, Scope 3 categories, emission factors and known data gaps.
• Test whether climate risks appear in the issuer’s risk register and enterprise risk process, not only in the ESG report chapter.
• Ask for a one-page gap list against the four Part D pillars, with owners and close-out dates.
• For comply-or-explain items, review the actual explanations before publication.
• Align climate disclosure controls with the board’s wider risk management and internal control review under the Corporate Governance Code.

Common gaps

Common blockers:

• Boundary driftESG teams use one perimeter; finance uses another. Emissions then cannot be reconciled to the reporting entity.
• Scope 2 method notes missingActivity data exists, but factor sources, year and location-based versus market-based treatment are unclear.
• Scope 3 started too lateTeams invent a full inventory after year-end instead of collecting activity data during the year.
• Governance text without evidenceThe report names a committee, but minutes show little climate discussion.
• Strategy and risk management written as separate essaysPart D expects climate risk to sit inside strategy and the enterprise risk process.
• Targets without a metrics trailAmbition statements appear without baseline, scope coverage or progress measurement.
• Assuming HKFRS S1/S2 voluntary reporting replaces Appendix C2It does not. Listed issuers still need to satisfy the ESG Reporting Code timetable that applies to them.

Where to read next

For implementation detail, start with the primary HKEX materials on the ESG Reporting Code and climate-related disclosures under Appendix C2, then cross-check against the ISSB / IFRS S2 architecture that Part D mirrors. For inventory method, use the GHG Protocol corporate standards as the common technical reference for Scope 1, 2 and 3. Hong Kong issuers calculating electricity-related Scope 2 figures should also keep current local utility emission factor publications from CLP and HK Electric with the calculation files.

On this site, use the regulatory links pages for ISSB, GHG Protocol and local emission-factor references, and the companion LargeCap note on the continuing “once in, always in” obligation if your issuer is in or near that index.

Fix ownership, boundaries and evidence early. Treat the timetable as a control calendar, not a year-end writing exercise.

Edited / written by: Amanda Cheung, Founder, AMMO Group