Hong Kong-listed firms seek localised calculation references for emissions, HKICPA says

Hong Kong needs to develop localised calculation references for greenhouse gas emissions and projections for climate scenarios for listed companies to improve environmental disclosures, according to a standard setter.

These needs are based on feedback from corporate officers responsible for climate-risk disclosures to the Hong Kong Institute of Certified Public Accountants (HKICPA) during training workshops, said Cecilia Kwei, head of accounting and sustainability standard setting at the organisation.

“Participants kept reiterating that they need more Hong Kong-specific greenhouse gas emission factors so that they don’t have to use [overseas references] … and climate [risk] scenarios,” she told the ReThink HK sustainable business forum on Thursday.

The HKICPA is a statutory body responsible for the professional training and development of certified public accountants in Hong Kong. It is also the standard setter for the local accounting industry. Listed companies are required to publish environment, social and governance reports alongside their financial disclosures.

Emission factors for greenhouse gases are used by businesses to calculate the discharges of their activities, especially those involving energy consumption, transport and waste treatment.

For example, in the United States, each megawatt-hour of electricity produced releases 823 pounds of carbon dioxide, while the combustion of 0.9 tonnes of municipal solid waste would produce 902 kilograms of carbon dioxide and 318 grammes of methane, according to the US Environmental Protection Agency.

While Hong Kong-listed firms typically use factors published by the US, UK and the United Nations’ Intergovernmental Panel on Climate Change as the basis for emissions disclosures, they would prefer to have more locally-relevant references, Kwei noted.