With the launch of the IFRS Sustainability Disclosure Standards, the connectivity between financial and sustainability reporting has been strengthened and the role of accountants in the sustainability agenda has become even more prominent. The Institute is committed to enabling the profession to contribute to global climate actions, as well as capturing opportunities for the development of our members.

This chapter highlights our sustainability efforts and progress, within our Institute and across various domains, with reference to the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD).

Governance

The Council is responsible for developing strategy and dedicating resources to address climate change and support the sustainable development of the profession and the Institute. Strategies in relation to sustainability had been established and incorporated into the Institute’s strategic plan, and the related progress and achievements are reported to the Council on a regular basis.

At operational level, we have appointed a Sustainability Lead and established an internal Sustainability Task Force comprising cross-function representatives to oversee our sustainability performance and drive improvements in greening our operations. Our Sustainability Committee comprising of senior representatives from professional services firms, major corporations, academic institutions as well as the Stock Exchange of Hong Kong Limited, also supported the Institute in identifying the key sustainability issues that are relevant to the profession and in developing initiatives for building members’ capacity and advocating best practices.

In February 2023, the standing Sustainability Advisory Panel was established under the Financial Reporting Standards Committee to support its works on sustainability reporting projects on the global stage and in Hong Kong. Leveraging the knowledge and experience of both sustainability and financial reporting experts in the panel, the Institute is well placed to conduct the related standard setting work as sustainability becomes an essential element in corporate disclosures.

Risk management

Sustainability considerations have been embedded into the Institute’s Enterprise Risks Management mechanism (refer to Corporate Governance chapter) which is overseen by the Council and Audit Committee. The management team conducts risk identification and assessment annually, and climate-related risks including both physical and transition risk factors were identified and discussed during the process. While climate risk is considered less significant to the Institute in view of our nature as compared with other business organizations, we have developed appropriate risk mitigation plans to minimize its impact to our operations, which include safeguarding our staff and visitors during the extreme weather conditions, regular review on policies in relation to low-carbon transition, improving energy efficiency and business continuity planning, as well as reducing our carbon emissions, among others.

Strategy

In 2023, as the Institute has pressed forward with its plans to be the Hong Kong sustainability standard setter (refer to Standard Setting and Professional Representation chapter), we have enhanced the breadth and depth of our coverage in relation to sustainability throughout our various capacity building and advocacy initiatives, in order to support the development of the profession and contribute to the low-carbon transition of our economy.

Pre-qualification education

We recognize the need to raise the awareness of prospective accountants on sustainability matters and the importance of equipping them with fundamental knowledge thereon. As such, topics such as the essence of sustainability and climate change have consequently been included into our professional accountant qualification examination to ensure students learn about various sustainability considerations in business, as well as the related standards and frameworks.

Continuing professional development and trainings

To provide our members with the latest knowledge and developments, we established a Sustainability Education Working Group under our Sustainability Committee to continuously advise on various continuing professional development programmes catered to the plethora of roles our members play, with the latest topics covered include net-zero transition, green finance, and the prevention of greenwashing. Meanwhile, in view of the launch of the IFRS Sustainability Disclosure Standards and subsequent enhanced disclosure requirements for Hong Kong listed companies in relation to climate, the Institute has developed a series of deep dive workshops with professional services firms that aim to provide members with the technical background and practical know-how on climate risk and reporting. Core elements in relation to the IFRS Sustainability Disclosure Standards and TCFD recommendations will be covered including climate risk assessment, scenario analysis, carbon accounting, decarbonization strategies, as well as data governance and reporting. These workshops are designed to be interactive, with sharings of real-life experiences to facilitate members’ application in the workplace and contribution to their organization’s net-zero transition.

Thought leadership pieces

Various sustainability-related articles as well as corporate case studies are published regularly in our A Plus magazine for members. To facilitate members’ self-learning and keep them up-to-date, we launched the ESG Information Centre on the Institute’s website which contains the latest news on sustainability that is relevant to the accounting profession in Hong Kong, as well as a selection of other relevant resources.

Advocacy through awards

We also have the intention of raising awareness of the IFRS Sustainability Disclosure Standards through the Best Corporate Governance and ESG Awards, which were first launched in 2000. These awards form part of the Institute’s advocacy for high standards of corporate governance and sustainability in the Hong Kong market. For the 2023 Awards, earlier in the year, we revised the assessment criteria having regard to some of the requirements expected to be included in the new IFRS standard on general requirements for disclosure of sustainability information. We also looked at the extent to which companies are setting and adhering to interim and long-term quantitative environmental, social and governance (ESG) targets.

Metrics and targets

In 2022, the Institute commenced its first carbon footprint exercise covering four major sources of emissions, including:

• Use of electricity: The use of purchased electricity at our Hong Kong office and training facilities at Wu Chung House to support our operations and member services.
• Paper consumption: Paper used for the printing of our publications, training and exam materials, as well as internal printing at our offices.
• Business air travel: Air-flights taken by the Institute’s representatives and staff for necessary business purpose to Mainland China and overseas.
• Employee commuting: Daily travels of employees to and from our office using various means of transportation.

Carbon footprints across four financial years from 2019/20 to 2022/23 were calculated and the results are summarized as below:

GREENHOUSE GAS EMISSIONS FROM FY2019/20 TO FY2022/23

in metric tonnes of carbon dioxide equivalent (tCO2e)

Remarks: due to the nature of the Institute’s operations, no material scope 1 emissions were generated. Please refer to the Sustainability within the Institute section of our website for the methodology of our carbon emissions calculations.

Our carbon emissions have decreased by 38.4% in FY2022/23 as compared with FY2019/20, with significant reductions noted across all our emission sources. These were mainly due to our continued decarbonization efforts and also partially owing to reduced headcount under the further regulatory reform. Highlights of our recent environmental initiatives are as follows:

Office space optimization – To enhance our operational and resource efficiency, we reviewed the usage of the office space and completed the remodeling projects to increase the utilization and reduce the energy use of each office floor. During the project, contractors were asked to implement environmental design and measures where possible, and relevant environmental, health and safety requirements were also clearly set out. About 20 percent of annual energy consumption could be saved upon the completion of the project.

Digitalization – We are in the progress of further digitalizing our operations and publications, which include our Qualification Programme and the A Plus magazine. This will allow us to save about 35 tonnes of papers and keep our paper use at a minimum.

Reduction of business air travels – We aim to further reduce our business air travel even after the travel restrictions are lifted as compared with the pre-COVID-19 levels in FY2019/20, by utilizing technology as much as possible and practicable. We believe this will bring a positive impact to our efficiency as well as environmental performance.

Other environmental initiatives – The Institute actively promotes recycling and reuse of resources, and has established a Green Corner and recycling stations to collect used paper, stationeries, glass and plastic bottles, aluminum cans as well as used batteries. To support the Energy Saving Charter on Indoor Temperature, the Institute has set and maintained an average indoor temperature at 24°C or higher in our office during the summers. All copy machines and computers of the Institute have been defaulted to energy saving mode when they are not in use. Our efforts have been recognized by the Environmental Campaign Committee who have issued the Wastewi$e Energywi$e Certificates.