A joint research by KPMG and DBS Hong Kong highlights 3 critical gaps in climate disclosure and transition readiness of HK-listed companies

18 February 2025, Hong Kong (SAR), China ("Hong Kong") – KPMG announced today a research report in collaboration with DBS Bank (Hong Kong) Limited (“DBS Hong Kong”), unveiling the 3 main critical gaps in climate disclosure and transition readiness of Hong Kong listed consumer goods businesses in response to the recent climate disclosure requirements by Hong Kong Exchanges and Clearing Limited (HKEX), including the data gap, the knowledge gap, and the financial gap.

The report, titled “Driving change: the climate disclosure of Hong Kong listed companies in key sectors and the road ahead”, reviewed the climate-related disclosure status of selected Hong Kong listed companies. Effective decarbonisation requires three key elements: accurate data, comprehensive knowledge, and adequate financial support. Our findings and analysis indicate that all three elements have gaps to bridge: a data gap concerning Scope 3 emissions profile, a knowledge gap in establishing effective targets and transition plans, and a financial gap needed to execute those plans.

The report also highlights the interdependence of disclosure and transition: regulatory mandates enhance data coverage, leading to improved quality and robust targets that propel decarbonisation efforts.

• The missing link: more than half of companies are still silent on Scope 3 emissions. 60% of analysed companies have not begun reporting Scope 3 emissions due to the current stage of data availability and quality challenges, even though around 70% of greenhouse gas (GHG) emissions are under Scope 3 for most of the analysed companies.
• Targets misaligned: majority of companies lack science-based targets. 57% of disclosed targets are not science-based or aligned with international target-setting standards, even with an 85% disclosure rate on commitments to carbon emissions reduction in their Environmental, Social, and Governance (ESG) reports.
• A call to action: companies need comprehensive transition plans: only 10% of the analysed companies are at mature level of transition plan in accordance with the 3As principles – Ambition, Action, and Accountability proposed by the Transition Plan Taskforce (TPT)*.

Raymond Ng, Head of Clients and Markets, Hong Kong at KPMG China, noted the industry’s recognition of sustainability's importance but highlighted a lack of resources and industry expertise in effectively managing emissions data, as well as setting realistic targets and transition plans.

Boris Chan, Managing Director and Head of Institutional Banking Group at DBS Hong Kong, emphasised the urgency for businesses to evolve in response to climate change. “The report highlighted that limited budget allocation was a barrier to adopting sustainability practices and only 17% of the researched companies have leveraged financial instruments for their sustainability endeavour. We understand a substantial amount of capital is required for the transition. DBS Hong Kong provides a variety of green financing options to fund decarbonisation. By bridging data and knowledge gaps, companies will be able to attract greater capital support for new initiatives, driving effective transitions and ensuring sustainable long-term growth.” he stated.

Today's corporate ESG disclosure frameworks provide consistent and relevant reporting, enabling quantification and benchmarking of environmental and social impacts. Even though the current challenges are more towards Scope 3 data gaps, we can expect these gaps to gradually narrow with large-cap companies being mandated to disclose their Scope 3 emissions. Enhanced climate disclosure and alignment of business strategies with science-based carbon reduction targets are anticipated to foster more consistent and comparable reporting, ultimately driving the transition to a low-carbon economy.

The research report examines the existing challenges companies face in attaining precise disclosure and progress in decarbonisation of Hong Kong listed companies, focusing on leading Chinese mainland enterprises and Hong Kong businesses across six sectors, including Apparel, Food & Beverage, Home Products, Hospitality, Logistics and Transportation & Automobile. These industries operate with complex, multifaceted supply chains, presenting distinct challenges and opportunities as they undergo the low-carbon transformation.

Effective January 2025, the ESG Code issued by HKEX, mandated that listed companies in Hong Kong provide more detailed disclosures regarding their ESG-related strategies, governance, risk management, metrics, and targets for climate-related matters. These new requirements highlight the growing demand for transparent and comprehensive climate reporting and the need for listed companies in Hong Kong to align with global standards. 

^* Transition Plan Taskforce, “Disclosure Framework”. Published October 2023, from https://transitiontaskforce.net/wp-content/uploads/2023/10/TPT_Disclosure-framework-2023.pdf 

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KPMG
Isis Wong
Associate Director
Media Relations
Email: iw.wong@kpmg.com
Tel: (852) 3927 5810

DBS Hong Kong 
Celia Wan
Senior Vice President
Media Relations
Email: celiawan@dbs.com
Tel: (852) 6690 9250

Gigi Lai
Manager
Media Relations
Email: gigilai@dbs.com
Tel: (852) 6840 2142

In 2025, KPMG marks “80 Years of Trust” in Hong Kong. Established in 1945, we were the first international accounting firm to set up operations in the city. Over the past eight decades, we’ve woven ourselves into the fabric of Hong Kong, working closely with the government, regulators, and the business community to help establish Hong Kong as one of the world’s leading business and financial centres. This close collaboration has enabled us to build lasting trust with our clients and the local community – a core value celebrated in our anniversary theme: “80 Years of Trust”.