Nearly two-thirds of the constituents of the Hang Seng Composite LargeCap Index have begun disclosing their carbon emissions from the value chain, while collecting and measuring downstream data remains challenging, a survey from the Hong Kong Institute of Certified Public Accountants showed.
Companies on the Hang Seng Composite LargeCap Index are mandated to disclose climate-related information, including Scope 3 emissions or carbon dioxide from its suppliers or clients, starting from 2026, according to Hong Kong Exchanges and Clearing's (0388) updated rules about environmental, social and governance.
The HKICPA survey shows that in the 2024/25 reporting period, 66 percent of these index constituents have disclosed their Scope 3 greenhouse gas emissions to some extent, a significant increase from the previous year's 50 percent.
According to Patrick Rozario, chairman of the HKICPA's Best Corporate Governance and ESG Awards 2025 review panel, all large-cap issuers currently disclose Scope 1 (direct) and Scope 2 (indirect) emissions. He noted that while Scope 3 disclosure is more challenging, large companies possess robust governance and resources, and still have over a year to prepare before the formal reporting deadline.
HKICPA President Edward Au Chun-hing said that the institute has been actively supporting the industry through capacity-building initiatives, including training sessions, published guidance, workshops, and talks by international experts.
The survey found that among the 15 categories of Scope 3 emissions, companies most frequently disclose data related to "upstream" activities. Rozario pointed out that this is because data from upstream suppliers is easier to obtain, whereas downstream information, such as transportation and packaging, is more difficult to collect and measure.
The survey also revealed that while 62 percent of respondent companies have set carbon neutrality or net-zero targets, only 27 percent include reporting for Scopes 1, 2, and 3 within these goals. Furthermore, while 66 percent of companies obtain external assurance for their overall emission data, the rate for securing assurance specifically for Scope 3 emissions reporting is only 25 percent.
HKICPA recommends that companies strive to expand their climate efforts. This includes comprehensively covering Scope 3 emissions in reporting, providing clear explanations for their chosen greenhouse gas reduction baseline year, and considering obtaining external assurance.
Companies are also advised to set a target date for achieving carbon neutrality or net-zero emissions and to develop a clear roadmap with corresponding interim targets.
