Hong Kong to Implement New Climate Audit Standards by End-2022
(Bloomberg) -- Hong Kong is looking to endorse and implement the just introduced climate-related global audit standards by the end of 2022, the head of the city’s financial watchdog said.
The new guidelines set up by International Sustainability Standards Board will be incorporated into the city’s audit framework and listing rules by the end of next year through early 2023, Securities and Futures Commission Chief Executive Ashley Alder told reporters on Friday.
“That’s much much faster than the normal accounting standards that can take years,” said Alder, whose tenure as SFC chief ends by September 2023.
Global Sustainability Body Launches in Accounting Landmark (1)
Established this week by the IFRS foundation, the ISSB will the world’s global standard setter for environmental, social and governance issues. The move will help to reduce a number of competing standards, also folding in other existing ESG accounting groups.
Striving to reach carbon net-zero and to stamp out green-washing, Hong Kong regulators have also proposed their own initiatives. The SFC in August announced a requirement on fund managers to include climate risks in their processes as well as make appropriate disclosures. The rule was effective immediately, with a 12-month grace period for managers overseeing at least HK$8 billion. It also set rules for funds seeking to use green, or ESG in their names, in June.
The ISSB is set to start working in 2022 and will appoint at 14-member board. It’s premature to say if anyone from Hong Kong would join “to have direct involvement” on the board level, Alder said.
Adjusting legislation to make the ISSB standards cover private companies will take longer since it requires input from the government and lawmakers, he said.
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