Guided Template - Hong Kong New Climate Requirements 2026

Introduction

Alaya Consulting has partnered with Unwritten to integrate market-leading climate risk data into its advisory services for clients in Hong Kong and mainland China. By combining Alaya's deep regional expertise with Unwritten's analytics, businesses gain the clarity and confidence they need to navigate evolving climate disclosure requirements. This guide introduces both Unwritten and Alaya, and then explores the historical context of these regulations, practical approaches to compliance, and the strategic implications for your business.

Alaya Consulting

Alaya Consulting is one of Asia's leading ESG and climate advisory firms. Since the launch of the TCFD framework in 2018, we have advised Hong Kong–listed companies and financial institutions on climate-related disclosures, with expertise spanning scenario analysis, transition planning, and setting science-based targets (SBTs). Over the past six years, our team has worked with clients across a diverse set of industries, including utilities, real estate, financial services, manufacturing, and gaming, helping them navigate evolving regulatory and investor expectations on climate risk.

Our approach is comprehensive, supporting clients in addressing both physical risks, such as climate-driven hazards that impact assets and supply chains, and transition risks, including policy, regulatory, reputational, and technology change. This dual focus enables issuers to understand exposures across their business models and value chains while preparing credible responses for investors and regulators.

We are trusted advisors to clients not only in Hong Kong but also across key economic regions of China, including the Greater Bay Area, the Yangtze River Delta (长三角), and the Beijing-Tianjin-Hebei area. This regional footprint gives us a unique perspective on both the opportunities and challenges faced by issuers in aligning with international disclosure standards while addressing domestic policy developments and operational realities.

Through our partnership with Unwritten, we combine our regional implementation experience with their global thought leadership and technology platform, ensuring that our clients in Hong Kong and mainland China receive guidance that is both internationally credible and locally practical. Together, we help issuers build robust climate governance systems, conduct meaningful scenario analyses across both physical and transition risks, and prepare disclosure-ready reports that meet HKEX's New Climate Requirements and the expectations of global investors.

Unwritten

Unwritten is a leading climate risk analytics provider that delivers the most comprehensive climate risk insights, trusted by global investors managing hundreds of billions of dollars, and consultants partnering with some of the world's largest enterprises. The all-in-one platform for climate risk combining qualitative and quantitative insights provides a single source of truth for Transition, Physical, and Nature-related Risk.

Unwritten's expertise is rooted in science-backed data, academic rigor, and industry expertise. Lead by former Palantir Technologies' Climate Lead, Dr. Phillip Marks, the team applies sophisticated proprietary modelling to climate risk. Unwritten is backed by an advisory board of top Oxford University, London Business School, and Stanford professors, and former leaders with decades of experience from the world's most influential financial and strategic institutions.

Aims of this Document

As global climate risk regulations expand, 2026 marks a pivotal moment where thousands of companies will begin disclosing climate-related risks and opportunities for the first time.

We know that climate disclosures can be a confusing and time-intensive topic, especially for organizations preparing to disclose for the first time.

This template translates our expertise into a free, easy starting point for organizations embarking on climate risk disclosures or disclosure updates. It breaks down the trends and content we have seen in hundreds of disclosures and maps them to the structure of IFRS S2 as adopted by HKEX's New Climate Requirements. Each section relevant to climate-related disclosures and requiring your input has been clearly delineated, with exemplar responses synthesised from our work with past clients and through surveying the global, TCFD-aligned reporting landscape.

We hope that this guided template will accelerate your work and provide a skeleton to bring together the data, research, and stakeholder engagement required for effective and efficient disclosure — from streamlining data gathering across your organisation by clear demarcation of required datapoints, to suggestions on how to approach the more technical aspects of the New Climate Requirements.

If you need support in preparing for HKEX's New Climate Requirements or aligning your disclosures with IFRS S2, please reach out to Alaya Consulting:

Website: www.alayaconsulting.com.hk

Contact Person: Tony Wong, Founder & Owner

Telephone: +852 3990 0793

Email: tonywong@alayaconsulting.com.hk

Key Summary

Historical Context

Hong Kong's New Climate Requirements, developed by Hong Kong Exchanges and Clearing Limited (HKEX), is one of many frameworks around the world based on the principles of the TCFD, now maintained by the ISSB in the IFRS S2 standard. The TCFD was formed in 2015 with the express purpose of improving and increasing the reporting of climate-related financial information so that markets can understand climate-related risks and opportunities, allocate capital more efficiently, and promote financial stability. This mandate was passed on to its successor, the ISSB, in 2024.

Global Relevance

The IFRS S2 standard implements the TCFD's recommendations, with the added benefit of a decade of implementation, consultation, and revision. IFRS S2 now forms the basis of climate-related disclosures for jurisdictions including the EU (CSRD), Australia (AASB S2), and California (SB 261).

Hong Kong Context

Under Hong Kong's New Climate Requirements, all Main Board issuers have been required to disclose in line with IFRS S2 on a ‘comply or explain’ basis since 1 January 2025. Large Cap Issuers (Hang Seng Index constituents) are further required to disclose against the New Climate Requirements on a mandatory basis from 1 January 2026. These requirements were developed following extensive stakeholder engagement over two years, with the decision to align in full with the ISSB standards representing Hong Kong investor interest in remaining competitive within the global financial arena.

Our perspective on what this means for companies in the region

Companies listed in Hong Kong and mainland China will face unprecedented scrutiny in how they assess and disclose climate-related risks. While the HKEX New Climate Requirements provide clarity through full alignment with IFRS S2, many issuers in the region are still early in their journey of integrating climate risk assessment into strategic decision-making. For most boards, climate change remains a compliance obligation rather than a lever for strengthening business resilience.

The pace of regulatory change presents both challenges and opportunities. On the one hand, disclosure expectations are rising faster than most issuers' internal capabilities to measure, monitor, and manage climate impacts. This is particularly evident in scenario analysis — while HKEX has built in “Reasonable Information Relief” and “Capabilities Relief,” many companies still lack the expertise and internal resources to perform even qualitative assessments with confidence. On the other hand, issuers that move early to meet and exceed disclosure requirements will find themselves well-positioned to attract international capital and respond to investor expectations for robust climate governance.

From our work with issuers in Hong Kong and across the region, three common challenges emerge:

1. Board readiness – limited familiarity with climate issues at the senior management and board level.
2. Data limitations – inconsistent ability to collect reliable climate and emissions data within value chains.
3. Analytical barriers – a lack of affordable yet professional analytical tools to support scenario analysis and resilience assessment, leaving companies reliant on either oversimplified qualitative approaches or prohibitively expensive global software solutions.

Together, these challenges risk creating a two-tier market: companies that treat disclosure primarily as compliance versus those that embed climate risk as a strategic consideration. We believe the latter group will gain a competitive edge, particularly as global investors increasingly screen for credible climate transition strategies. For issuers in Hong Kong and China, the coming two years represent a narrow but critical window to build capability, close data and analytical gaps, and demonstrate resilience to regulators, shareholders, and the broader market.

Corporate Disclosure Template and Guidance

Report Structure

The structure of climate disclosures is based on IFRS S2 and is fairly consistent in regulations around the world. According to the IFRS, a climate disclosure should contain the following:

1. Governance. The governance processes and procedures to monitor and manage climate-related risks and opportunities
2. Strategy. The strategy for managing climate-related risks and opportunities
3. Risk management process. The processes used to identify, assess and monitor climate-related risks and opportunities, including how they inform overall risk management
4. Performance metrics. The entity's performance in relation to its climate-related risks and opportunities, including progress towards any targets it has set or is required to meet

Some regulations also ask for specific detail on adaptation and resilience measures to manage physical and transition climate risks.

This template breaks the requirements down into the following structure:

Within each section, there are a few specific questions that must be answered. We have set these out with examples and commentary on how they are typically answered. Each question refers to which section of the New Climate Requirements it addresses, and its broader alignment to the IFRS S2, which can be found in this document.

1. Governance

There are two questions that this section needs to answer:

1a. Describe the board's oversight of climate-related risks and opportunities.

Organizations typically open the Governance section by stating the role the board plays in reviewing climate risks and opportunities and how it is supported by individuals, groups, and processes at different levels of the organization. This is typically supported by a simple chart, for example as follows:

Figure: Example governance chart. The Managing Board of Directors oversees the ESG Steering Committee. The Chief Sustainability Officer and the Chief Financial Officer report to the ESG Steering Committee. The Sustainability Team reports to the Chief Sustainability Officer, the Audit Committee reports to the Chief Financial Officer, and the Risk Committee reports to both.

Sample for reference:

The Board recognises climate change as a source of financial risk and opportunity that can affect the Group's operating costs, supply continuity, demand patterns, and reputation. Board oversight is exercised through the [Board / ESG Committee / Risk Committee / Audit Committee], which:

• reviews the Group's material climate-related risks and opportunities at least [quarterly / semi-annually];
• approves the Group's climate-related strategy, including any transition plan and material targets;
• oversees climate-related disclosures included in the Annual Report and/or ESG Report; and
• monitors progress against the Group's climate-related actions and targets through periodic management reporting.

The Board receives updates on: (i) key risk developments (e.g., severe weather disruption, input cost impacts, regulatory and market changes), (ii) performance metrics (including Scope 1 and Scope 2 emissions, and priority Scope 3 categories where applicable), and (iii) progress against transition initiatives e.g., energy efficiency, renewable electricity, logistics and supplier engagement.

Tips

In Hong Kong, most listed companies already have a Board ESG Committee or Audit & Risk Committee responsible for enterprise risk management. A practical way to align with IFRS S2 is to expand the remit of these committees to include oversight of climaterelated risks and opportunities, supported by managementlevel working groups.

For example, many issuers in utilities, property, and financial services in Hong Kong have formed ESG Committees or Climate Risk Teams that report into the Board. This structure allows climate matters to be escalated alongside strategic, operational, and financial risks, rather than treated as standalone.

We recommend that issuers explicitly disclose:

• Which Board committee or director has climate oversight
• How climate is integrated into existing ERM processes
• The frequency of reporting on sustainability/ESG issues at board level

1b. Describe management's role in the governance process, and procedures to assess and manage climate-related risks and opportunities.

Organizations use this section to outline the processes and structures in place for management to identify climate risks and opportunities and incorporate them into the firm's wider strategy.

Sample for reference:

Management is responsible for identifying, assessing and managing climate-related risks and opportunities, and for implementing the actions approved by the Board. Day-to-day oversight is coordinated by a Climate/ESG Working Group chaired by [CFO / COO / Head of Sustainability], with membership from Finance, Procurement, Operations, Logistics, Retail/Stores, Legal/Compliance, and Investor Relations. Management responsibilities include:

• maintaining a climate risk register and ensuring climate risks are assessed using the Group's risk methodology;
• integrating climate considerations into budgeting, procurement and supplier management, logistics planning, and capex approvals;
• maintaining data collection processes and internal review controls for climate metrics and disclosures; and
• escalating material climate-related matters (including significant incidents and emerging risks) to the Board/Committee.

2. Strategy

There are six questions that this section needs to answer:

2a. Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term. Include accompanying definitions for the time horizons and how they are linked to the planning horizons.

Sample for reference:

The Group uses the following time horizons for climate-related assessment, aligned to internal planning:

• Short term: 0–2 years (annual budgeting, sourcing cycles, near-term operational planning)
• Medium term: 3–5 years (supplier contracts, network optimisation, product/packaging roadmap)
• Long term: 6–10+ years (major capex, long-term sourcing resilience, strategic repositioning)

Transition risks (and related opportunities)

• Regulatory and reporting risk (short–medium term): Increased requirements for climate disclosure, data quality, and assurance; potential introduction/expansion of carbon-related policies in operating and sourcing markets.
• Cost and margin risk from the transition (short–medium term): Higher energy, transport and raw material costs; supplier pass-through of decarbonisation investments; volatility in freight and energy markets.
• Market and reputational risk (short–long term): Changing consumer expectations, retailer requirements, and stakeholder scrutiny of environmental claims and product sustainability performance.
• Technology and process opportunity (short–medium term): Energy efficiency in stores/warehouses and operations; improved route planning and distribution efficiency; potential shift to lower-emission logistics options where available.
• Product and packaging opportunity (medium–long term): Packaging reduction, improved recyclability, increased recycled content and lower-impact materials (where relevant).

Physical risks

• Acute weather disruption (short–medium term): Typhoons, extreme rainfall and flooding affecting Hong Kong operations, ports, distribution centres, last-mile delivery, and supplier production/shipping schedules.
• Chronic heat risk (medium–long term): Higher cooling demand and operating costs for stores/warehouses; impacts on workforce health and productivity; increased risk of spoilage and cold-chain stress where relevant.
• Supply chain disruption risk (short–long term): Physical hazards affecting key suppliers and logistics corridors (including manufacturing hubs and major ports), leading to lead-time variability and inventory impacts.

2b. Describe the impact of climate-related risks and opportunities on the organization's businesses, strategy, cash flows, and both financial position & performance.

Organizations often disclose these two sections together in a table like the one below. Tables are populated with a qualitative breakdown of the transition and physical climate-related risks and opportunities identified across the organization's portfolio. Alongside risks, the potential impacts to the direct business and throughout the supply chain are listed in the table. It is rare to see quantitative financial impacts in these disclosures, although the intention is that as disclosures become more mature, these will become more standard.

2c. Describe the impact of climate-related risks and opportunities on the organization's business model and value chain. Include a description of where these risks and opportunities are concentrated (e.g. geographical areas or types of assets)

Where applicable, to support the disclosures above, describe any short, medium, or long term climate goals held by your organization. State whether these are relevant for your direct operations or supply chain. This is supplementary information.

Sample for reference:

Climate-related impacts are concentrated across the Group's value chain in:

• Upstream sourcing and suppliers: emissions and disruption risk embedded in purchased goods and services; potential concentration in specific geographies and supplier tiers.
• Logistics and distribution: exposure to fuel costs, route disruptions, port congestion, and severe weather events affecting inbound and outbound flows.
• Owned/leased operations: stores, offices, warehouses and distribution facilities in [Hong Kong and other key regions], including exposure to extreme weather and cooling demand.

Where relevant, the Group is prioritising value chain engagement by focusing on key suppliers representing a significant portion of procurement spend and by working with logistics partners to improve emissions transparency and resilience planning.

2d. Describe any climate-related transition plan the organization has in place. Including information about how the organization will resource the plan, and accompanying quantitative and qualitative information about the progress of plans

Sample for reference:

The Group's transition approach focuses on practical levers within its operational control and influence:

Operational energy (near–medium term)

• Implement energy efficiency measures (e.g., lighting upgrades, HVAC controls, building management improvements).
• Increase renewable electricity coverage where feasible through [on-site generation / green electricity products / procurement mechanisms].

Logistics and distribution (near–medium term)

• Improve distribution efficiency through load consolidation, route optimisation and collaboration with logistics providers.
• Where feasible, increase uptake of lower-emission transport solutions.

Supply chain and products (medium–long term)

• Strengthen supplier engagement to improve emissions data coverage and identify reduction initiatives.
• Where relevant, reduce packaging intensity and improve packaging recyclability and/or recycled content.

Resourcing and accountability

Transition actions are delivered through business-as-usual budgets and targeted initiatives overseen by the Climate/ESG Working Group. Progress is monitored through agreed KPIs (see Section 4) and reported to the Board/Committee at least [quarterly / semi-annually].

2e. Describe the resilience of the organization's strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.

This question calls on organizations to disclose the medium- (2030 - 35) and long-term (2040 - 50 and beyond) business impacts they have identified through a scenario analysis exercise. Definitions of the climate scenarios are included too. We have provided the standard definitions from the NGFS long-term scenarios (although their new, short-term scenarios may also be relevant). Note that not all organizations conduct a quantitative analysis using NGFS or comparable scenarios. Many conduct a qualitative exercise, building semi-customized storylines and explaining how each would affect their business. Additionally, HKEX has provisions including the Reasonable Information Relief and Capabilities Relief to inform the determination of approach to climate-related scenario analysis.

3. Risk Management

There are three questions that this section needs to answer:

3a) Describe the organization's processes for identifying and assessing climate-related risks.

This question asks for a high-level summary of any existing processes to find, assess, and monitor climate-related risks, including the use of any external advisers or technology platforms.

Sample for reference:

Climate-related risks are identified and assessed through:

• integration into the Group's enterprise risk management process (annual risk assessment and periodic refresh);
• site reviews for operational vulnerabilities (e.g., severe weather preparedness for stores/warehouses/distribution);
• supplier and logistics risk reviews (including concentration risk and disruption history); and
• monitoring of regulatory developments and stakeholder expectations relevant to the Group's markets and value chain.

Risks are assessed using common criteria including likelihood, potential operational disruption, financial impact, and reputational impact.

3b) Describe the organization's processes for managing climate-related risks.

Organizations typically respond to this question with a high-level description of their process for detecting and acting on climate risks

Sample for reference:

The Group manages climate-related risks by:

• maintaining business continuity plans for severe weather disruption and supply interruptions;
• engaging priority suppliers and logistics partners on data provision, resilience planning, and performance improvement;
• implementing operational efficiency and maintenance programmes that reduce energy cost exposure; and
• applying governance over environmental claims and communications to reduce reputational and litigation risk (where applicable).

3c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization's overall risk management.

Sample for reference:

Climate-related risks are managed within the existing risk governance framework. Material climate-related risks, and significant changes to risk exposure, are escalated through management risk committees and reported to the Board/Committee. Climate metrics and key initiatives are reviewed alongside other operational and strategic risks to support decision-making.

This question has often been answered implicitly in earlier sections of the disclosure, so organizations tend to offer a fairly short summary of internal processes or job roles in place to review sustainability procedures and make recommendations related to the management of climate risks. If applicable, they generally also provide detail on how climate-related risks are shared with senior risk or finance teams.

4. Metrics and Targets

There are eight questions that this section needs to answer:

4a. Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process.

Sample for reference:

The Group uses the following metrics to monitor climate-related performance and exposure:

• Energy consumption (kWh) and energy intensity (e.g., per store / per sqm / per revenue)
• Scope 1 and Scope 2 GHG emissions (tCO₂e) and intensity metrics
• Priority Scope 3 indicators (where applicable), such as supplier data coverage (% of spend) and logistics emissions intensity (where data is available)
• Operational resilience indicators (e.g., number of severe weather disruptions affecting operations/logistics; critical site coverage by continuity plans)

4b. Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, the approach taken to measure its emissions, and the related risks.

Sample for reference:

The Group discloses Scope 1 and Scope 2 emissions for the reporting period, including the organisational boundary, calculation approach, and key assumptions. The Group also assesses whether Scope 3 emissions are material and, where appropriate, prioritises Scope 3 categories commonly relevant to consumer staples and consumer discretionary businesses, including:

• Purchased goods and services (often the largest category)
• Upstream transportation and distribution
• Downstream transportation and distribution (where applicable)
• End-of-life treatment of sold products (particularly packaging, where relevant)
• Use of sold products (where applicable for products consuming energy during use)

Scope 3 data quality is expected to improve over time as supplier-specific data coverage increases.

4c. Describe the targets used by the organization to manage climate-related risks and opportunities and performance against these targets.

This question is generally interpreted as asking for emissions reductions targets, although there is no reason that other metrics cannot be stated. These could include, for example, water use metrics or a “net” physical risk metric that accounts for mitigation measures to manage physical hazards. Emissions-related targets are generally stated with a baseline year, target year, and progress toward target.

Where targets are set, they are disclosed with the base year, target year, boundary, and progress. Targets may include:

• Scope 1 and Scope 2 absolute or intensity reduction targets
• Renewable electricity coverage targets
• Supplier engagement / data coverage targets (e.g., % of spend covered by supplier emissions reporting)
• Logistics efficiency or emissions intensity improvement targets (where available)

Progress is tracked annually and reviewed by management and the Board/Committee.

Sample for reference:

Where applicable, the Group applies an internal carbon price of [HKD/tonne CO₂e] to support decision-making. This may be used to evaluate energy efficiency projects, renewable electricity options, and supply chain/logistics initiatives by reflecting potential future carbon cost exposure.

4d. Disclose the amount of assets or business activities vulnerable to climate-related transition risks; climate-related physical risks. Furthermore, those aligned with climate-related opportunities and risks. Finally, the amount of investment deployed towards climate-related risks and opportunities.

Sample for reference:

The Group evaluates vulnerability across:

• Operational sites (stores, offices, warehouses, distribution centres) exposed to severe weather risks and disruption;
• Supply chain exposure to climate-sensitive regions, key inputs, and logistics corridors; and
• Business activities sensitive to energy and transport costs.

The Group discloses, where available, qualitative and/or quantitative information on investments and expenditures related to:

• energy efficiency and renewable electricity initiatives;
• resilience and business continuity measures; and
• systems and processes to improve data quality and reporting readiness.

4e. Disclose internal carbon prices used by the organisation. Explain whether, and how, the organisation is applying a carbon price in decision making.

Disclose this if applicable.

4f. Disclose how climate-related considerations are factored into executive renumeration and the percentage of executive management renumeration recognised in the current period that is linked to climate-related considerations.

Sample for reference:

Where applicable, climate-related considerations are incorporated into executive remuneration through performance measures linked to delivery of transition initiatives and/or climate performance indicators (e.g., Scope 1–2 performance, renewable electricity progress, supplier coverage, logistics improvements). The Group discloses the percentage of remuneration linked to climate-related measures and the basis of assessment.

4g. Describe any climate-related targets set by the organisation, including those it is required to meet by law or to monitor progress towards achieving strategic goals. N.B. Any targets disclosed should include: the metric used, the objective of the target, the part of the entity to which the target applies; the period over which the target applies, the base year; any milestones or interim targets; if the target is quantitative; and how the latest international agreement on climate change has informed the target.

Sample for reference:

Where climate-related targets are disclosed, the Group includes:

• the metric and objective;
• the part of the Group covered (e.g., operations, supply chain);
• the timeframe, base year, and interim milestones (if any);
• whether the target is quantitative; and
• how the target aligns with relevant external expectations and internal strategy.

4h. Describe the organisations process for reviewing the target. Including whether the target or the target's methodology has been validated by a 3rd party, any metrics used to monitor progress, and any revisions to the target with an accompanying explanation.

Sample for reference:

Targets are reviewed at least annually. The Group may seek third-party review or assurance over relevant metrics and methods as reporting matures. Any revisions to targets or methodologies are disclosed with an explanation of the change and its impact on comparability.