As climate-related risks become increasingly material, companies and investors face growing pressure to move beyond qualitative narratives toward credible, quantitative insights. At the same time, many organisations still face a common challenge: they are not sure where to start—what to scope, what to prioritise, how to quantify exposure, and how to translate scenario results into practical actions and disclosures.

Human Expertise Meets AI Analytics

By integrating human judgement and sector expertise with AI-enabled analytics, the partnership bridges the gap between disclosure and decision-making. The joint offering is designed to support clients in producing outputs that are auditable, repeatable, and management-ready, aligned with leading frameworks and market expectations, including ISSB/IFRS S2, TCFD, and NGFS scenarios.

“Climate risk is no longer just a reporting topic—it is a financial, operational, and strategic priority,” said Tony Wong, Founder of Alaya Consulting. “This partnership brings together the strengths of both teams to help clients move from not sure where to start to a clear, actionable roadmap—grounded in quantitative scenario analysis and built for real-world decisions.”

“Organisations increasingly need asset-level insight they can trust and use,” said Alex Spencer, Head of Sales at Unwritten. “By combining Unwritten’s location-based quantitative modelling with Alaya’s advisory expertise, we can help clients meet compliance and investor requirements while prioritising resilience business strategies”

What the Partnership Delivers

Through this collaboration, clients gain access to an integrated solution that combines strategic advisory with science-based modelling, including: asset-level climate risk quantification across geographies; scenario analysis under different climate pathways and time horizons (including NGFS-aligned scenarios); assessment of physical, transition, and nature-related risks; support for climate-related disclosure and reporting aligned to IFRS S2; and actionable insights to prioritise resilience and adaptation measures. The offering also includes practical implementation support such as scoping, materiality screening, data readiness, and decision-useful outputs.

The solution is especially relevant for asset-intensive sectors such as real estate, infrastructure, logistics, manufacturing, and investment portfolios.

Enabling Resilient, Transition-Ready Organisations

By integrating strategy with advanced modelling, Alaya Consulting and Unwritten help organisations move from climate awareness to action—enhancing transparency, strengthening resilience, and supporting better financial and strategic decision-making in an increasingly climate-driven environment.

The post Alaya Consulting and Unwritten Join Forces in Hong Kong and China to Advance Climate Scenario Quantitative Analysis Across Asia appeared first on ESG Reporting and Carbon Advisory in Hong Kong.

By the end of 2025, 12,353 companies worldwide had either validated science-based targets or committed to set them, with 9,764 holding validated targets—a 40% year-on-year increase. Net-zero ambition is rising even faster, with validated net-zero targets growing 61% globally. Yet within this global expansion, China’s trajectory is particularly striking.

China Nearly Doubles Its Target Adoption

China recorded 92% growth in companies with validated science-based targets between 2024 and 2025—one of the highest rates among major economies. The total number of Chinese companies with validated targets rose from 312 to 598, positioning China fourth globally behind Japan, the United Kingdom, and the United States.

This growth reflects a critical shift. Historically, Europe dominated science-based target adoption, but 2025 signals a rebalancing. Asia grew 53% overall, the highest of any region, and China was a primary engine of that expansion. As the world’s largest emitter and a central node in global supply chains, China’s increasing participation materially strengthens the credibility and scale of corporate climate alignment worldwide.

Sectoral Transformation in China

China’s growth is not only broad-based—it is strategically concentrated in high-impact sectors. Information Technology surged 145%, rising from 33 to 81 companies with validated targets. Consumer Staples doubled (+100%), while Consumer Discretionary grew 87%.

This pattern highlights two important dynamics. First, climate alignment is expanding into technology and advanced manufacturing—industries that shape global innovation and supply networks. Second, consumer-facing sectors are increasingly integrating science-based targets, signaling rising market and investor expectations around climate transparency and performance.

Unlike Japan, where Materials led sectoral growth, or India, where Health Care expanded most rapidly, China’s acceleration in technology underscores its distinctive economic structure and its growing role in low-carbon innovation.

Expanding Influence Across Asia and Beyond

China’s surge also complements strong performance across Asia’s emerging markets. Indonesia and Pakistan posted growth rates above 90%, while Taiwan and India achieved substantial gains. Together, these trends suggest that climate ambition in Asia is moving from early adopters to broader regional integration.

Financial market penetration reinforces this shift. Nearly half of companies in Japan’s Nikkei 225 now hold targets or commitments, and adoption among major global indices continues to deepen—placing additional pressure on multinational firms operating in China to align with science-based pathways.

A Strategic Inflection Point

More than halfway through the decisive decade for climate action, China’s accelerating adoption of science-based targets represents a strategic inflection point. As Chinese companies embed climate targets into corporate strategy—particularly in technology and consumer sectors—they not only reduce domestic emissions but also influence global value chains.

The 2025 data make one conclusion clear: China is no longer on the sidelines of corporate climate leadership. It is becoming one of its central pillars.

Visit our website to explore case studies on how Chinese companies are successfully setting and implementing SBTi-aligned targets.

The post China Emerges as a Key Growth Engine for SBTi appeared first on ESG Reporting and Carbon Advisory in Hong Kong.

For businesses in Hong Kong and mainland China exporting into the EU, and for large EU companies operating in China, the proposals are important. The overall effect is likely to be a more targeted compliance framework — but not a retreat from sustainability regulation.

| The Omnibus package points to simplification, not deregulation. 

Reduced disclosure pressure under CSRD

One of the headline proposals is a major reduction in the number of companies subject to mandatory CSRD reporting. The Commission expects the changes could cut the in-scope population by around 80%, with the regime refocused primarily on larger undertakings with more than 1,000 employees.

For some Hong Kong and China-based groups, this may reduce the prospect of falling directly within the EU sustainability reporting regime. Non-EU turnover thresholds would also increase, which may further limit direct application to overseas businesses.

However, indirect pressure is likely to remain. Even if suppliers in Hong Kong or China are not themselves required to report under the CSRD, they may still receive information requests from EU customers needing sustainability data for their own compliance purposes.

| Many Asia-based businesses may fall outside direct reporting scope, but still remain within the EU compliance ecosystem. 

Value-chain requests may become more manageable

The package would also strengthen protections against excessive value-chain reporting requests. This is particularly relevant for suppliers in China that have faced increasingly detailed ESG questionnaires from European customers.

If adopted, the new approach could help curb disproportionate data demands from large in-scope companies, especially for businesses with up to 1,000 employees. That may ease some administrative burden across regional supply chains. 

CBAM remains a key issue for exporters

For exporters of carbon-intensive goods, CBAM remains the most commercially relevant EU measure. The proposed changes would simplify compliance and exempt small importers below a new de minimis threshold. But the core mechanism remains firmly in place.

That means Hong Kong and China exporters in sectors such as steel, aluminium, cement and related products should continue preparing to provide reliable emissions data to EU importers and customers.

| For carbon-intensive exporters, the compliance burden may be lighter — but the need for credible emissions data is not going away.

Impact on large EU companies in China

For large EU companies with operations, sourcing or manufacturing in China, the proposed changes to the CSDDD are also significant. The Commission proposes to focus due diligence primarily on direct business partners, reduce the frequency of periodic assessments and narrow stakeholder engagement requirements.

This could make compliance more practical for companies managing complex supply chains and operating structures in China. Even so, large EU groups should not assume sustainability risk management will become a lower priority. Regulatory expectations may soften, but investor, customer and reputational pressures will remain.

Looking ahead

The Omnibus package is still only a proposal and will now move through the EU legislative process. The final outcome may differ from what has been published. For now, companies should treat the package as a signal that the EU is seeking a more proportionate model — while still preserving the core architecture of sustainability reporting, due diligence and carbon border regulation.

|The right response is reassessment, not complacency.

Businesses in Hong Kong, China and Europe should now review how the proposed changes affect their reporting exposure, supply chain data strategy and EU customer relationships.

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CBAM: Regulatory Background and Scope

Carbon pricing has become a mainstream climate policy tool, with 75 carbon taxes and emissions trading systems currently in place worldwide. The EU CBAM, adopted in 2023, is the first implemented border adjustment mechanism globally. It applies initially to:

• Iron and steel
• Aluminium
• Cement
• Fertilisers
• Hydrogen
• Electricity

Importers must report embedded emissions during the transitional phase and, from 2026, purchase CBAM certificates priced in line with allowances under the EU Emissions Trading System (ETS).

In October 2025, amendments under the EU’s “Omnibus” simplification package introduced a de minimis exemption for importers below 50 tonnes annually (excluding hydrogen and electricity).

Why This Matters for HK and China ListCos

For Hong Kong and Mainland China listed industrial companies exporting components to EU customers—directly or indirectly via Tier‑1 suppliers such as Bosch—CBAM creates three structural shifts:

1. Mandatory embedded emissions disclosure
2. Financial exposure through carbon‑linked import costs
3. Increased supply chain scrutiny

While CBAM’s direct global emissions impact may be limited, it may drive policy spillovers and supply chain reconfiguration, incentivising exporters to adopt carbon pricing or cleaner technologies.

If exporters fail to provide verified emissions data, EU authorities may apply default emission values, reportedly under consideration at relatively high levels—raising the risk that CBAM functions as a de facto trade‑restrictive measure.

For automotive component suppliers, this creates a direct commercial linkage between carbon intensity and competitiveness.

Trade Tensions and WTO Risk

CBAM has already triggered international friction:

• Russia requested WTO consultations in May 2025.
• India, China, and Brazil have criticised CBAM, arguing it may violate WTO principles and the UNFCCC principle of Common but Differentiated Responsibilities.
• Other sceptical WTO members include Indonesia, Japan, South Korea, Taiwan, Türkiye and Paraguay (Lexology, 30 January 2026).

This geopolitical environment adds uncertainty for China‑based exporters reliant on EU market access.

From ESG Disclosure to Verification‑Ready Carbon Data

As EU buyers increasingly require primary emissions data, listed companies cannot rely solely on high‑level ESG reporting. ISO‑aligned Life Cycle Assessments (LCA), compliant with ISO 14040 and ISO 14044, are becoming essential tools for:

• Demonstrating embedded emissions transparency
• Avoiding punitive default values
• Supporting Environmental Product Declarations (EPDs)
• Maintaining preferred supplier status

Alaya’s LCA work for precision manufacturers shows that material sourcing and production energy often represent the largest emissions hotspots—insights that directly inform CBAM risk mitigation strategies.

Strategic Implications for Listed Companies

For HKEX and A‑share issuers, CBAM exposure translates into:

• Revenue risk in EU markets
• Margin pressure from carbon cost pass‑through
• Supply chain restructuring toward lower‑carbon inputs
• Heightened investor scrutiny of transition risk

CBAM’s environmental effectiveness may be debated, but its commercial consequences are already material. For Hong Kong and China listed companies exporting to EU industrial customers, carbon transparency is fast becoming a license to operate.

Proactive development of verification‑ready carbon accounting systems, product‑level LCAs, and decarbonisation pathways will not only mitigate compliance risk but also strengthen competitive positioning in a carbon‑constrained global economy.

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The Momentum Behind Mandatory Disclosure

From 2025 onward, Hong Kong’s corporate sustainability landscape is being shaped by data credibility, global standards, and disclosure transparency.

Key findings highlight solid progress:

• More than 90% of issuers reported on all Environmental and Social aspects.
• Nearly all large-cap issuers referenced at least one international ESG framework.

The regulatory lens has shifted — away from “Did you report?” to “How well did you report?”. Quality, comparability, and auditability are now the benchmarks. Hong Kong is moving decisively from voluntary ESG narratives to standardized, rules-based disclosure.

1. Climate Disclosures Move Center Stage

New Rules and Timeline

HKEX’s Climate-related Disclosure Requirements took effect on 1 January 2025, with the first filings due in 2026.

Alignment with Global Standards

The framework fully mirrors the ISSB Standards:

• 47% of large-cap issuers have voluntarily adopted ISSB reporting (+13 points year on year).
• 64% still reference TCFD — the precursor to the ISSB standards.
• The Hong Kong government has targeted full adoption of ISSB Standards by 2028 under its Sustainability Disclosure Roadmap.

As a result, Hong Kong companies are becoming fluent in the global ESG reporting language (ISSB / HKSDS), boosting cross-border comparability and investor confidence.

2. Emissions Reporting and the Scope 3 Race

Disclosure of direct emissions (Scope 1 and 2) is now almost universal. The next frontier is Scope 3, which captures the deeper supply chain carbon footprint.

• Marketwide coverage: 41%
• Large-cap issuers: 69% (up 19 points from 2024)

Sector performance:

• Telecommunications: 71%
• Financials: 53%
• Conglomerates: 48%
• Manufacturing and Energy lag behind.

The coming year will bring a Scope 3 data race — companies that can map and quantify their value-chain emissions early will hold a clear advantage in financing and reputation.

3. Scenario Analysis as a Strategic Tool

Eighty‑four percent of large-cap issuers have adopted climate scenario analysis, with increasing attention to quantified disclosures of risk, opportunity, and potential financial impact.

Scenario analysis has evolved from a compliance exercise into a strategic foresight tool. It helps companies test how various climate scenarios might affect cash flows, asset values, and supply chains, and adapt business planning accordingly.

To investors, robust scenario analysis demonstrates a forward-looking governance culture.

4. ESG Assurance Becomes the Next Compliance Frontier

Independent assurance is no longer optional.

• Only 9% of all issuers have obtained assurance.
• Among large-cap issuers, 70% have already done so.

A new Sustainability Assurance Framework is expected in 2025, with phased mandatory consultation planned for 2027.

For issuers, this means:

• ESG data must be audit-ready and traceable.
• Reporting processes must integrate with internal controls and risk systems.
• Disclosure quality will increasingly influence credit ratings and borrowing costs.

5. Social Issues Return to the Spotlight

While the review focused on climate, HKEX has signaled that future ESG taxonomies will expand to include social dimensions — such as labor rights, modern slavery, supply chain human rights, and diversity and inclusion.

This points to a shift in focus: corporate social reporting in Hong Kong is evolving from a compliance-driven exercise to a value-chain accountability model, where supplier due diligence and workplace equity become core components of sustainable finance.

Turning Disclosure into Advantage: Five Strategic Levers

Conclusion – From Compliance to Culture

The 2025 HKEX review sends an unmistakable message:

• Hong Kong’s ESG reporting framework is maturing into a culture of governance and transparency.
• Regulators set the framework; investors create the pressure; leaders find opportunity in alignment.

ESG has outgrown its reporting roots — it is now the language of corporate strategy and capital credibility.

The post Hong Kong ESG Reporting: From Storytelling to Standardization appeared first on ESG Reporting and Carbon Advisory in Hong Kong.

The appointment of Alaya by CSD is a strategic move to ensure that the Bay of Lights leverages its data-driven expertise to integrate comprehensive sustainability strategies into the project. CSD believes that sustainable practices can lead to cost savings, increased operational efficiency, and enhanced development values, positioning itself for sustained success and positive impact.

“We are excited to partner with Alaya to drive the sustainability agenda for the Bay of Lights project forward. This appointment reaffirms our commitment to creating sustainable and resilient communities that prioritize both environmental stewardship and social responsibility,” said Jimmy He, Managing Director of CSD.

The Bay of Lights project is an ambitious coastal development aimed at redefining urban living with a focus on sustainability and innovation. This mixed-use development will feature some of the key sustainability features below.

• Public Transportation Integration: Emphasizes transit-oriented development to reduce reliance on private vehicles, thereby lowering traffic congestion and emissions.
• Walkability and Cycling: Designed to promote walkability and cycling, with all key areas within a 5–10-minute walk or bike ride, reducing the need for car travel, encouraging physical activity, and contributing to a healthier environment.
• Energy Efficiency: Aims to commit to energy-efficient designs and green building certifications to ensure long-term environmental benefits.

Alaya, a pioneer in ESG consulting in Hong Kong, brings a wealth of experience and a track record of successful projects in the sector. Since its inception, Alaya has completed over 500 ESG reports and is the first ESG consultancy in Asia approved for science-based emissions target setting.

“We believe our combined efforts will serve as a model for future projects, demonstrating how modern urban developments can harmonize with nature and benefit the community,” said Tony Wong, Founder of Alaya. “By leveraging our extensive ESG expertise, we aim to set new standards for sustainable urban development in Cambodia,” he added.

Beyond the Bay of Lights project, Canopy Sands Development is actively advancing sustainability through a range of initiatives. At the Global Climate Action Forum 2024, the company reaffirmed its dedication to sustainable urban development, spotlighting the Bay of Lights as a flagship project exemplifying their environmental commitment.

With this partnership in place, Alaya looks forward to leveraging its sustainability expertise and creating added value within the Bay of Lights project.

About Alaya Consulting

Alaya Consulting is a specialist advisory firm focused on ESG disclosure, pre-assurance, and training. As the first ESG consultancy in Asia to have a Science Based Target approved, Alaya Consulting leverages its sustainability expertise and cross-industry experience to empower clients and create long-lasting value while fostering continuous growth. The Alaya team comprises professionals with diverse experiences, blending compliance, process improvement, stakeholder engagement, and training, aiming to combine insights with passion to solve reporting and communication challenges and to earn the trust of all its stakeholders.

About Canopy Sands Development

Canopy Sands Development is a pioneering real estate development company, established in 2019 and headquartered in Phnom Penh, Cambodia. Led by a dynamic team of highly experienced professionals, both local and international, Canopy Sands Development is committed to laying the foundations that catalyze economic opportunities. With each project, it aims to create a significant economic, social, and educational impacts, delivering sustainable and lasting benefits to Cambodian communities.

The post Canopy Sands Development and Alaya Consulting Partner to Champion Sustainable Development in Bay of Lights, Cambodia appeared first on ESG Reporting and Carbon Advisory in Hong Kong.

The purpose of the 2023 Forbes China ESG Innovation Selection Awards is to highlight the unique strengths of leading companies in ESG innovation and their significant contributions to regional and global challenges. The aim is to encourage the entire business community to embrace a more sustainable future. The selection process focuses on four key dimensions: corporate growth, ESG practice, innovation execution, and industry influence. It encompasses various industries such as finance, energy, environmental protection, industrial manufacturing, real estate, and enterprise technology. The goal is to recognize exemplary ESG innovation among Chinese enterprises, showcase their achievements, and analyse the current status and future trends of ESG development in China.

Alaya Consulting nominated China Everbright Bank and China Overseas Grand Oceans Group, both of which received honours at the awards ceremony.

Tony Wong, the founder of Alaya Consulting and a GRI training partner in Asia Pacific, provided GRI certification training to some of the award-winning companies. This training aimed to enhance participants’ understanding of the relationship between the Sustainable Development Goals (SDGs) and ESG reporting, as well as the significance of long-term value development for companies.

The post Alaya Consulting Co-organizes 2023 Forbes China ESG Innovation Enterprise Awards appeared first on ESG Reporting and Carbon Advisory in Hong Kong.

1. Why was the ISSB created?

There was strong demand for the IFRS Foundation to create the ISSB.

A company’s ability to generate cash flows over the short, medium and long term is inextricably linked to its interactions with stakeholders, society, the economy and the natural environment.

Companies were calling for a simplified disclosure landscape, seeking clarity and guidance about how to communicate this story effectively.

Investors were calling for decision-useful, consistent and comparable sustainability information that enables them to understand sustainability-related risks and opportunities.

As a result, capital markets were not working as efficiently as they could, adding cost and complexity.

2. What approach has the ISSB taken to standard-setting?

The IFRS Foundation has a rigorous and respected due process that secures global market input and jurisdictional buy-in. Furthermore, ISSB members represent diverse experiences and global perspectives that have enhanced the ISSB’s standard-setting process.

By consolidating and building upon the resources of other investor focused initiatives – SASB, IIRC, CDSB and TCFD – the ISSB has been able to address fragmentation and secure international support for a global baseline of sustainability disclosures.

The ISSB consults closely with the market, developing IFRS S1 and IFRS S2 so that they deliver a comprehensive global-baseline of sustainability-related disclosures. The ISSB has focused on interoperability with jurisdictional requirements, and with voluntary standards – such as the GRI Standards – that are focused on broader objectives.

The ISSB has also delivered connections to financial statements, and with its sister body’s standards – IFRS Accounting Standards.
As a result of the ISSB’s approach to standard-setting, IFRS S1 and IFRS S2 are proportionate, and elicit assurable disclosures. They require industry-specific disclosures to highlight information most relevant to investors.

3. What is IFRS S1?

IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information sets out the general requirements for a company to disclose information about its sustainability-related risks and opportunities that is useful to investors in making decisions relating to providing resources to the company. It sets out the core content for a complete set of sustainability-related financial disclosures, establishing a comprehensive baseline of sustainability-related financial information to meet the needs of global capital markets.

4. What is IFRS S2?

IFRS S2 Climate-related Disclosures sets out the requirements for a company to disclose information about its climate-related risks and opportunities, while building on the requirements described in IFRS S1.

IFRS S2 integrates the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and requires the disclosure of information about both cross-industry and industry-specific climate-related risks and opportunities.

5. How have the Standards changed since the Exposure Drafts?

The ISSB has discussed 36 papers over 10 meetings to consider the 1,400 comment letters received on IFRS S1 and IFRS S2.

We have published a feedback statement summarising the central matters that have been the subject of feedback and discussion.

Key topics include interoperability, with the ISSB carefully weighing and incorporating interoperability considerations throughout its decision making to achieve greater interoperability between the Standards and jurisdictional requirements, and proportionality, with the ISSB introducing proportionality mechanisms – such as the consideration of a company’s skills, capabilities and resources, and the use of reasonable and supportable information available without undue cost and effort.

Feedback about industry-based materials was also considered, with the ISSB confirming the requirement for a company to provide industry-based disclosures, and providing examples of industry-based disclosure topics and metrics in illustrative guidance that entities must refer to and consider.

6. How do the Standards approach materiality?

A company is asked to disclose material information about the sustainability- related risks and opportunities that could reasonably be expected to affect its prospects.

The definition of material information is aligned with that used in IFRS Accounting Standards.

Information is material if omitting, misstating, or obscuring that information could reasonably be expected to influence investor decisions.

7. Why should companies apply the Standards?

The ISSB expects that companies that apply IFRS S1 and IFRS S2 will benefit from using a global disclosure baseline that:

• removes the alphabet soup of current ESG reporting
• helps companies streamline their sustainability reporting processes; and
• enables greater transparency of information, resulting in improved access to capital, governance and strategy for companies
• Likely benefits for companies are related to improved data quality, including higher-quality of information from companies that are in the value chain of a reporting company.
• Improved data quality is expected to have a positive effect on areas such as governance, strategy, access to capital, cost of capital, reputation, and employee and stakeholder engagement.

Applying IFRS S1 and IFRS S2 will also help companies streamline their sustainability reporting processes for meeting the needs of investors.

These benefits are largely confirmed by academic and market research and by the voluntary standard-setters whose materials form the foundation of the Standards. Importantly, this information is expected to help investors make better investment decisions.

8. How should my company start applying the ISSB Standards?

Companies have told us that useful first steps include:

• Evaluating internal systems and processes for collecting, aggregating and validating sustainability-related information across the company and its value chain
• Consider the sustainability-related risks and opportunities that affect the business
• Getting familiar with the fundamental concepts within IFRS S1.
• Importantly reporting processes and controls used for financial reporting are a relevant basis for establishing necessary practices to apply the ISSB Standards.

9. What does this mean for the frameworks and standards I’m already using voluntarily?

While the ISSB has achieved consolidation in the landscape, a number of the standards and frameworks you might already voluntarily use will still be important. This is because, so far, the ISSB has issued standards on general requirements and climate, it has not yet covered other areas in- depth.

Therefore, use of the SASB Standards will continue.

Furthermore, the CDSB Framework can still be used to help guide disclosures.

The ISSB is currently consulting through its agenda consultation on future projects, including around integration in reporting. In the meantime, the Integrated Reporting Framework is a useful tool for integrating and presenting reporting that includes disclosures prepared applying ISSB Standards

10. What services does the IFRS Foundation provide that can help?

The IFRS Foundation offers a broad range of relevant products and services, including supporting the widespread adoption and implementation of ISSB Standards and integrated reporting.

For example, the IFRS Sustainability Alliance is diverse global network of members who explore and develop best practices related to sustainability standards and integrated reporting.

The IFRS Foundation also offers an educational course – the FSA Credential. Further information can be found on the IFRS Foundation website.

11. How does the IFRS Foundation work with GRI?

The IFRS Foundation has a Memorandum of Understanding with GRI through which we seek to align our work programmes and standard-setting activities.
The agreement reflects the importance of ensuring compatibility and interconnectedness of investor- focused baseline sustainability information that meets the needs of the capital markets, with information intended to serve the needs of a broader range of stakeholders.

The IFRS Foundation and GRI recognise the considerable public interest in aligning where possible their respective work programmes, terminology and guidance, helping to reduce the reporting burden for companies and to further harmonise the sustainability reporting landscape at an international level.

12. What languages are the ISSB Standards being translated into?

We recognise the importance of translations for application of the Standards. IFRS S1 and IFRS S2 and the accompanying materials will be translated into Spanish. Translations in other languages are dependent on collaboration with national standard-setters. It is likely that IFRS S1 and IFRS S2 will be translated in Arabic, French, Korean, Japanese and Portuguese, Traditional Chinese and Turkish.

Other translations are likely to be considered in the coming months. The timing of publication of translations is dependent on the availability of technical resources to the review the translation, not necessarily the time needed for the translation. The educational material of the capacity building programme might also be translated, on a case-by- case basis depending on the demand.

Source: International Sustainability Standards Board Communications Toolkit June 2023

Resources

The IFRS Foundation is publishing a number of documents related to IFRS S1 and IFRS S2 including:

• Basis for Conclusions on IFRS S1—summarises the ISSB’s considerations in developing the requirements in IFRS S1.
• Basis for Conclusions on IFRS S2—summarises the ISSB’s considerations in developing the requirements in IFRS S2.
• Effects Analysis on IFRS S1 and IFRS S2—describes the likely benefits and costs of IFRS S1 and IFRS S2.
• Project Summary of IFRS S1 and IFRS S2—provides an overview of the project to develop IFRS S1 and IFRS S2.
• Feedback Statement for IFRS S1 and IFRS S2—summarises feedback on the proposals that preceded IFRS S1 and IFRS S2 and the ISSB’s response.

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What the proposed regulations mean for business

The Hong Kong Stock Exchange’s forthcoming regulations will require all listed companies to disclose their carbon emissions in their ESG reports in line with the International Sustainability Standards Board (ISSB) Climate Standard. These regulations encompass the disclosure of emissions from companies’ value chains, known as “Scope 3” emissions, which can contribute up to 80-90 percent of a company’s total emissions. The proposed changes to climate-related disclosures were released in April this year and will be effective from January 2024. Given the limited timeline for companies to comply with the new regulations, companies will want to get ahead by getting organised now.

What is carbon accounting?

Carbon accounting entails the measurement, quantification, and monitoring of an organisation’s or entity’s greenhouse gas emissions. It encompasses the collection of data relating to different activities and operations that contribute to emissions, such as energy usage, transportation, waste management, and production processes. In essence, carbon accounting involves the translation of business activities into quantifiable carbon emissions through mathematical calculations.

Benefits of carbon accounting

Driven by upcoming regulations such as the HKEX rules and various governmental rulings worldwide (including TCFD, ISSB, and upcoming SEC rulings), carbon accounting is becoming a global requirement. These frameworks and rulings will establish standardised and comprehensive carbon accounting practices, enhancing transparency, comparability, and accountability in emissions reporting. This will enable better decision-making, risk assessment, and goal-setting for businesses. Additionally, they create urgency and responsibility for companies to measure, manage, and reduce their carbon footprint to meet regulatory and stakeholder expectations. By conducting carbon accounting, businesses ensure compliance, avoid penalties, and mitigate legal risks. It also positions them favourably for future regulatory developments by proactively addressing emissions and maintaining accurate data.

Beyond meeting compliance and regulatory requirements, carbon accounting also offers several other benefits to your organisations, including:

• Cost savings: Through comprehensive carbon accounting, businesses can identify inefficiencies and areas for improvement within their operations. This insight enables them to implement energy-efficient measures, reduce waste, and optimise resource utilisation. By adopting sustainable practices and actively reducing emissions, businesses can achieve significant cost savings over time.
• Enhanced reputation and branding: Consumers increasingly prioritise environmentally responsible and sustainable companies. By engaging in carbon accounting and actively reducing their carbon footprint, businesses can enhance their reputation and stand out in the market. Demonstrating a commitment to sustainability attracts environmentally conscious consumers and fosters brand loyalty, providing a competitive advantage.
• Investor confidence: Investors now consider environmental, social, and governance (ESG) factors when making investment decisions. Carbon accounting empowers businesses to provide transparent and credible information about their environmental performance. By aligning with the expectations of socially responsible investors, companies with strong ESG performance and robust carbon accounting practices can attract investment and boost investor confidence.
• Risk management: Climate change poses significant risks to businesses, including physical, regulatory, and reputational risks. Carbon accounting helps identify and assess these risks, allowing businesses to develop appropriate strategies for mitigation and adaptation. Proactively managing carbon emissions reduces exposure to climate-related risks, safeguarding the company’s long-term viability.
• Competitive advantage: Companies that prioritise sustainability and actively manage their carbon footprint gain a competitive edge in the marketplace. Consumers, clients, and partners increasingly seek environmentally responsible business partners. Carbon accounting showcases a commitment to sustainability and sets businesses apart from the competition, providing a clear advantage.

Implementing carbon accounting practices offers numerous benefits to businesses. By identifying cost-saving opportunities, enhancing reputation, attracting investors, managing risks, and gaining a competitive advantage, companies can thrive in an evolving business landscape. Embracing sustainability through carbon accounting is not only a responsible choice but also a strategic one that paves the way for long-term success.

What carbon accounting involves

In simple terms, carbon accounting involves assessing your business’s carbon footprint and converting the results into CO₂e (carbon dioxide equivalent). CO₂e is a standardised unit that accounts for the warming effect of different greenhouse gases based on their global warming potential (GWP). For instance, one metric ton (MT) of methane has a warming effect 29.8 times greater than that of CO₂ over the same period, making it equivalent to 29.8 metric tons of CO₂e.

Here’s how to get started with carbon accounting:

1) Identify the sources of your company’s carbon emissions

These are broken-up into three types of emissions, or Scope 1-3 emissions:

Scope 1 emissions — the direct greenhouse (GHG) emissions that occur from sources that are controlled or owned by your company (for example, emissions associated with fuel combustion in boilers, furnaces, and vehicles).‍

Scope 2 emissions — the indirect GHG emissions associated with the purchase of electricity, steam, heat, or cooling.‍

Scope 3 emissions — all indirect emissions that come from activities that occur in your company’s supply chain, but are not directly controlled by your company. These sources include the use of purchased goods and services, fuel- and energy-related activities, employee business travel, waste generated from operations, transport-related activities, and the use of leased assets. On average, Scope 3 emissions account for over 80-90 percent of an organisation’s emissions so this will be the biggest source of emissions and will require the most time to identify.

2) Measure your company’s carbon emissions‍

Once the sources of emissions within your organisation have been identified, you can proceed with calculating your carbon footprint. Traditionally, this involved manual calculations using a carbon accounting spreadsheet. However, with the advent of purpose-built carbon management software, the process can now be significantly automated. A robust solution enables you to effortlessly upload data on your expenditure (such as procurement spend, utility bills, and fuel receipts) or integrate with your existing finance applications. The software then takes the financial value of the goods or services you have purchased and multiplies it by an emission factor, which represents the amount of emissions generated per unit of financial value. This calculation provides an estimate of the emissions produced. By automating this process, the software automatically determines your company’s total emissions and presents a visual representation of your carbon footprint.

How Alaya Consulting can help you

Carbon accounting may seem complex and overwhelming, but with the right ally, it becomes much simpler and more accessible. Alaya Consulting offers a wealth of expertise in ESG reporting, pre-assurance, ratings upgrades, and sustainability training for your business. As a trusted advisor in the ESG field, we have a proven track record of assisting organisations in adopting sustainable practices. In addition, our partnership with Avarni, an advanced carbon management platform utilising artificial intelligence and data analytics, enables us to accurately measure, monitor, and forecast your business’s Scope 1-3 carbon emissions. Get in touch with us today to learn how we can aid your business in meeting its ESG reporting requirements, implementing effective emission reduction strategies, and driving sustainability initiatives within your organisation.

About Avarni

Avarni is a carbon emissions management platform that enables organisations to move from net zero commitment to action as quickly as possible. Driven by AI and the power of a global supplier network, Avarni improves measurement, hotspot identification, and planning, to help companies quickly understand and address their emissions exposure. Countless industry leaders leverage Avarni, including 5B, City of London, Jacobs, KPMG, Point B, Schneider Electric Sustainability Business, and WNS. Avarni has analysed over $300 billion in corporate spending data and examined the equivalent of 150 million tonnes of CO2e emissions within supply chains.

The post How to get started with carbon accounting appeared first on ESG Reporting and Carbon Advisory in Hong Kong.

[Hong Kong, June 14, 2023] –  Alaya Consulting, a leading specialist consultancy focusing on ESG disclosure, science-based target setting and GRI certified training, has announced a new collaboration with Avarni, a carbon emissions management platform helping companies quickly understand their carbon emissions exposure, to assist Hong Kong based companies in their decarbonisation journeys.

This partnership aims to empower companies in Hong Kong and beyond to prepare for proposed regulations set by the Hong Kong Stock Exchange (HKEX), requiring all listed companies to make new climate-related disclosures in their ESG reports in line with the International Sustainability Standards Board (ISSB) Climate Standard. The proposed changes to climate-related disclosures were released in April this year and will be effective from January 2024. Given the limited timeline for companies to comply with the new regulations, Avarni and Alaya Consulting will play an integral role in offering comprehensive guidance and support to companies for a frictionless transition.

The HKEX’s forthcoming regulations, which require companies to disclose their carbon emissions, have significantly elevated the importance of sustainability practices in the business community. These regulations encompass the disclosure of emissions from companies’ value chains, known as “Scope 3” emissions, which can contribute up to 80-90 per cent of a company’s total emissions. Traditionally, identifying and measuring these emissions has been a demanding and resource-intensive task. Alaya’s expertise and guidance, combined with Avarni’s AI-powered emissions management automation, will equip companies to effectively navigate the new regulatory landscape.

“We are excited to partner with Avarni to offer a comprehensive solution for companies navigating the complex world of ESG reporting and carbon emissions management,” said Tony Wong, Founder of Alaya Consulting. “By combining our expertise in ESG disclosure with Avarni’s advanced carbon management platform, we aim to empower organisations to embrace sustainability, exceed regulatory requirements, and drive positive environmental impacts.”

Alaya Consulting brings its extensive expertise in ESG reporting, pre-assurance, ratings upgrade and sustainability training to the partnership. With a strong track record in helping organisations adopt sustainable practices, Alaya Consulting has become a trusted advisor in the ESG space. Their deep knowledge of reporting frameworks, including the ISSB, Task Force on Climate-related Financial Disclosures (TCFD), Global Reporting Initiative (GRI), and Sustainability Accounting Standards Board (SASB), will support Avarni’s sophisticated carbon management platform that automates Scope 1-3 carbon emissions management for companies. By leveraging artificial intelligence and data analytics, Avarni empowers organisations to accurately measure, monitor, and forecast their carbon emissions. The platform provides valuable insights and tools for organisations to develop and implement effective emission reduction strategies.

“Decarbonisation efforts have largely been centred on Scope 1 and Scope 2 reductions, but the HKEX’s new regulatory framework around emissions reporting, specifically Scope 3, reinforces the importance of gaining clear insight of the entire value chain,” said Misha Cajic, Co-Founder and Co-CEO of Avarni. “Our AI-driven carbon management platform, combined with Alaya Consulting’s deep sustainability reporting knowledge, will equip businesses with a tangible solution to address and comply with Scope 3 emissions mandates whilst enhancing their environmental sustainability practices.”

Together, Alaya Consulting and Avarni will provide comprehensive support to companies seeking to meet their carbon emissions disclosure obligations. By integrating Alaya Consulting’s ESG reporting expertise with Avarni’s cutting-edge carbon management platform, businesses will have the necessary tools to enhance their sustainability performance, streamline their ESG reporting processes, improve their environmental impact and drive meaningful change.

ENDS

About Alaya Consulting

Alaya Consulting is a specialist advisory firm focused on ESG disclosure, pre-assurance, and training. As the first ESG consultancy in Asia to have a Science Based Target approved, Alaya Consulting leverages its sustainability expertise and cross-industry experience to empower clients and create long-lasting value while fostering continuous growth. The Alaya team comprises of professionals with diverse experiences, blending compliance, process improvement, environmental engineering, stakeholder engagement and training, aiming to combine insights with passion to solve reporting and communication challenges and to earn the trust of all its stakeholders.

alayaconsulting.com.hk

About Avarni

Avarni is a carbon emissions management platform that enables organisations to move from net zero commitment to action as quickly as possible. Driven by AI and the power of a global supplier network, Avarni improves measurement, hotspot identification, and planning, to help companies quickly understand and address their emissions exposure. Countless industry leaders leverage Avarni, including 5B, City of London, Jacobs, KPMG, Point B, Schneider Electric Sustainability Business, and WNS. Avarni has analysed over $300 billion in corporate spending data and examined the equivalent of 150 million tonnes of CO2e emissions within supply chains.

avarni.co

Alaya Consulting Media Relations – Adella Budianto, Phone: +852 3702 0054; adella@alayaconsulting.com.hk

Avarni Media Relations – Angela Thompson, Phone: +61 0447075133; angela.thompson@avarni.co

PR agency for Avarni – Courtney Phelps; Phone: +61 452663095; courtneyphelps@slingstone.com

The post Alaya Consulting and Avarni partner to facilitate ESG reporting and carbon emissions management appeared first on ESG Reporting and Carbon Advisory in Hong Kong.