Complete guide to international sustainability standards framework — international ESG reporting standard general requirements, international ESG climate disclosures, and how to comply with international ESG standards in Hong Kong.
The international ESG framework is a set of global sustainability disclosure standards developed by the international sustainability standards, established under the the international standards body in 2021. The international ESG standards created two key standards that form the foundation of sustainability reporting worldwide:
The international ESG framework helps investors and capital market participants understand how sustainability risks and opportunities affect a company's financial performance, cash flows, and cost of capital. It provides a global baseline for sustainability disclosures that is consistent, comparable, and verifiable.
The international ESG reporting standard requires companies to disclose material information about sustainability-related risks and opportunities that could reasonably be expected to affect the entity's prospects (cash flows, access to finance, and cost of capital). Key requirements include:
The international ESG reporting standard is effective for annual reporting periods beginning on or after 1 January 2024, with transitional reliefs available for the first year.
The international ESG reporting standard builds on the TCFD recommendations and requires specific climate-related disclosures, including:
The international ESG reporting standard incorporates all TCFD recommendations but adds more detailed disclosure requirements. Companies already reporting under TCFD can transition to ESG disclosure standards with minimal structural changes.
The Hong Kong Stock Exchange (HKEX) has been aligning its ESG reporting requirements with international ESG standards. Key developments:
| Framework | Focus | Status |
|---|---|---|
| worldwide ESG reporting practices | Financial materiality, investor-focused | Global baseline standard |
| TCFD | Climate-related financial disclosures | Absorbed into global ESG disclosure frameworks |
| GRI | Impact on economy, environment, people | Complementary, different scope |
| SASB | Industry-specific metrics | Absorbed into international ESG standards |
| CDSB | Environmental reporting | Absorbed into international ESG standards |
| HKEX ESG Guide | HK-specific reporting requirements | Aligning with international ESG standards |
The international ESG framework consolidates TCFD, SASB, and CDSB into one unified standard. Companies that previously used these frameworks can transition to international ESG standards as their primary reporting framework.
Assess current ESG reporting against international sustainability frameworks requirements. Identify what data you already collect and what gaps exist.
Establish systems for collecting Scope 1, 2, and 3 emissions data. Set up governance structures for sustainability oversight.
Ensure your team understands international ESG standards requirements. ESG certification courses provide the knowledge needed to implement and maintain compliance.
Prepare sustainability disclosures integrated with financial reporting. Ensure connectivity between sustainability and financial statements.
Obtain third-party assurance for sustainability disclosures, particularly greenhouse gas emissions data.
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