AFRC Consults on Sustainability Assurance in Hong Kong (Dec 2025) - Key Takeaways
- EcoVision
- Jan 18
- 2 min read
AFRC Consults on Sustainability Assurance in Hong Kong (Dec 2025):
Hong Kong’s Accounting and Financial Reporting Council (AFRC) released a December 2025 consultation paper proposing a regulatory framework for sustainability assurance.
The consultation aligns with Hong Kong’s direction under the Government’s Roadmap on Sustainability Disclosure in Hong Kong (Dec 2024), which sets a pathway for large publicly accountable entities (PAEs) to adopt ISSB-aligned disclosure standards by no later than 2028.
Source of the consultation paper: https://www.afrc.org.hk/media/bvadgtpj/afrc-consultation-paper-on-sustainability-assurance-en.pdf
Why this consultation matters
The AFRC argues that sustainability reporting is now central to long-term value and risk assessment, and that investors increasingly expect disclosures that are reliable and independently assured.
The paper cites:
The International Energy Agency estimate that clean-energy investment must rise to about US$4.5 trillion annually by 2030 to stay on track for climate goals.
A Centre for Audit Quality survey where 94% of 100 U.S. institutional investors said public companies’ climate-related disclosures should be independently assured.
IFAC findings that 73% of 1,400 global entities obtained sustainability assurance in 2023 (mostly limited assurance, commonly over GHG emissions).
AFRC’s three objectives
The proposed framework aims to:
Promote high-quality assurance aligned with internationally recognised standards
Increase the credibility of sustainability disclosures via independent assurance
Create a level playing field for assurance providers
The five proposals (P1–P5) in brief
P1 — Who must obtain assurance
Subject to further consultations by HKEX and relevant financial regulators on Mandatory HKSDS Reporting, entities subject to that reporting would be required to obtain independent assurance.
P2 — Scope and timing (phased limited assurance)
A staged introduction of limited assurance is proposed:
Phase 1: Scope 1 and 2 GHG emissions — from the third financial year of Mandatory HKSDS Reporting
Phase 2: All remaining mandatory HKSDS disclosures — from the fifth financial year
No timetable is proposed for reasonable assurance at this stage.
P3 — Registered Sustainability Assurance Providers (SAPs)
Mandatory assurance would be provided by registered SAPs, either:
Registered local PIE auditors (meeting additional criteria), or
Accredited local non-CPA firms (meeting similar criteria)
The AFRC proposes excluding non-Hong Kong providers at the initial stage for mandatory assurance, so oversight remains consistent.
P4 — Prescribed standards
Mandatory engagements would follow HKSSA 5000 (aligned with ISSA 5000) with concurrent application of:
HKSQM 1 (quality management) and
HKESSA (ethics and independence requirements)
P5 — One regulator model
A single regulator model is proposed to register and regulate SAPs (and individuals), and oversee relevant standard-setting by the HKICPA.
Consultation deadline
Comments are due 30 March 2026 (submission via the AFRC’s prescribed form / online questionnaire).
In line with EcoVision’s core values, vision, and commitment to ESG and sustainability—particularly the importance of data reliability and decision-useful disclosures—we will submit our comments and feedback on this consultation paper by 30 March 2026 (via the AFRC’s prescribed form / online questionnaire)
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