Over two out of five large Hang Seng Index constituents are unready for the mandatory climate disclosure effective in January 2026, a report by Grant Thornton Hong Kong showed.
The auditor unveiled the concerning situation in its 14th Corporate Governance Review, after analysing the 2024 reports and environmental, social, and governance reports from 105 large-capitalization HSCI companies.
Forty-one percent of large blue-chip members provided vague and insufficient disclosures, particularly in risk management and climate targets, which would put them at “severe risk” of non-compliance and reputational damage, Grant Thornton said in the report.
As Hong Kong aims to become an international green finance hub, Hong Kong Exchanges and Clearing (0388) planned to implement its updated ESG Reporting Code in January 2024 but later delayed the start by one year due to feedback of low readiness, which mainly came from the small- and medium-cap companies. From the first day of 2026, all Hong Kong-listed companies must make climate disclosure according to the new code.
Grant Thornton also found that only 10 percent of companies showed that they are fully prepared with the precise quantitative data, adherence to recognised frameworks, and third-party assurance.
However, 50 percent of property and construction companies and 30 percent of utilities firms showed readiness due to their significant environmental impact, said the auditor.
In terms of disclosure, 95 percent of large blue-chip companies reported their climate-related risk in 2024, up by 6 percent from one year ago, while only 11 percent made quantitative financial impacts of climate issues.
Meanwhile, 10 large-cap HSCI companies reported green financing exceeding HK$50 billion in their 2024 ESG reports, a 20 percent jump from the previous year, indicating Hong Kong’s rapidly growing sustainable finance landscape.
