China ESG - Weekly News: HKEX Issues Guidance on TCFD-aligned Climate Disclosures

EU passes first chunk of green investment rules

The European Union has passed the first part of its rulebook on climate friendly investments, which from next year will define which activities can be labelled as green in sectors including transport and buildings.

The first section of the EU's sustainable finance taxonomy will apply from Jan. 1 2022, having passed a scrutiny period that ended on Wednesday night.

The rules set environmental criteria for investments including renewable energy, shipping and car manufacturing - with zero-emission vehicles the only type that can be labelled green from 2026.

Source: Reuters

HKEX Issues Guidance on TCFD-aligned Climate Disclosures

Climate-related reporting will become mandatory in Hong Kong by 2025.

The Hong Kong Exchanges and Clearing (HKEX) has published new guidance to help listed issuers assess their response to risks arising from climate change and prepare for Task Force on Climate-related Financial Disclosures-aligned (TCFD) reporting.

The guide is aimed at companies that are yet to develop substantive in-house expertise on climate-related issues, and seeks to mitigate the challenges currently faced by most companies in TCFD reporting, including:

  • Lack of understanding of concepts relating to climate change issues

  • Insufficient resources (e.g. lack of access to sustainability experts and lack of data)

  • Unclear roles and responsibilities

  • Lack of awareness from different corporate departments

The current ESG reporting requirements incorporate key TCFD recommendations. In December 2020, Hong Kong’s Green and Sustainable Finance Cross-Agency Steering Group announced plans for TCFD-aligned climate-related disclosures to become mandatory by 2025.

Source: ESG Investor

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