Chapter 22

Due Diligence Guidelines –


Code of Conduct Paragraphs







Key Stock Exchange Guidance Letters

Exchange Guidance Letter GL86-16, Appendix I, Section E

Other Key References

Rule 13.91 of the Listing Rules

Appendix 27 to the Listing Rules

Stock Exchange FAQ Series 18

1. Introduction

1.1 The purpose of environmental due diligence (“EDD”) is to identify any actual or potential environmental factors that may affect a listing applicant, and to help assess their impact on its business, financial condition and prospects. EDD can also help build a positive impression of a listing applicant where good environmental practices and processes can be highlighted. For most listing applicants whose activities do not involve environmental degradation or pollution, it is unlikely that a robust EDD will be necessary.

1.2 Appendix 27 to the Listing Rules contains an environmental, social and governance reporting guide (“ESG Reporting Guide”) that comprises two levels of disclosure obligations for listed issuers: (a) “comply or explain” provisions; and (b) recommended disclosures. Listed issuers are required to report on whether they have complied with the “comply or explain” provisions for the relevant financial year in their annual reports or in separate Environmental, Social and Governance reports, and are also encouraged to comply with the recommended disclosures in such reports.1 This on-going disclosure obligation should be taken into account when considering the scope of internal control review. A listing applicant may consider making equivalent disclosure in its listing document. If so, the EDD exercise will need to be undertaken with the disclosure standards contemplated in Appendix 27 to the Listing Rules in mind.


1. See Listing Rule 13.91.


HKCFEF Limited and the contributing law firms, accountants and sponsors are not offering these due diligence guidelines as legal, financial or professional advice or services and they should not be relied upon as such. These due diligence guidelines should not be used as a sole basis for any decision, action or inaction and are not meant to serve as a substitute for the advice of qualified professionals. See here for the full terms and conditions.

Environmental Due Diligence (EDD) Exercise

Actual or Potential Environmental Factors Affecting Listing Applicant

Environmental Degradation or Pollution

Appendix 27 to the Listing Rules

Actual or Potential Environmental Factors Affecting Listing Applicant

Environmental, Social and Governance Reporting Guide

EDD Disclosure Standards

Due Diligence Process

Due Diligence Compliance

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