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Monitor implementation of sustainable finance measures

Asset management

In 2019, the SFC conducted an industry-wide survey to gain a better understanding of how and to what extent licensed asset management firms and leading institutional asset owners consider environmental, social and governance (ESG) risks, into their investment and risk management processes, post-investment ownership practices and disclosures. The survey results were published in December 2019.

In August 2021, the SFC published its Consultation Conclusions on the Management and Disclosure of Climate-related Risks by Fund Managers and announced amendments to its Fund Manager Code of Conduct to require fund managers to take climate-related risks into consideration in their investment and risk management processes as well as to make appropriate disclosures. A circular was also issued to set out baseline requirements for all fund managers covering four key elements, namely governance, investment management, risk management, and disclosure, as well as the enhanced standards for larger fund managers.

In October 2021, a Seminar on Management and Disclosure of Climate-related Risks by Fund Managers was held.

ESG funds

In April 2019, the SFC issued a Circular to management companies of SFC-authorised unit trusts and mutual funds – Green or ESG funds (2019 Circular) as an initial step to enhance the disclosure standard of ESG funds and improve their comparability, transparency and visibility.

In June 2021, the SFC issued a new Circular to management companies of SFC-authorized unit trusts and mutual funds - ESG funds, which superseded the 2019 Circular. This circular set out the SFC’s expectations with respect to how requirements under the SFC Handbook for Unit Trusts and Mutual Funds, Investment-Linked Assurance Schemes and Unlisted Structured Investment Products apply to SFC-authorised funds which consider climate change or green or ESG or sustainability factors in their investment process.

In March 2022 and January 2023, industry workshops on ESG funds were held.

database of SFC-authorised ESG funds is available on the SFC website. FAQs on publicly offered investment products are also available on the SFC website.

Education and training

In June 2021, the SFC released its consultation conclusions on proposals to enhance its ongoing competency framework for corporations and individual practitioners, including that ESG would be included as a relevant topic for training under the Guidelines on Continuous Professional Training. The amended guidelines became effective in January 2022.

Sustainable finance is a core area of work of the Investor and Financial Education Council (IFEC), which enhances capacity building and raises public awareness through its investor education, outreach activities and research initiatives. In March 2019, the IFEC published a dedicated green finance webpage to provide retail investors with product, market and regulatory information, presenting both risks and opportunities to raise their awareness and support better informed decision-making. ESG and sustainable finance educational messages are disseminated through the IFEC’s online and social media channels, publicity campaigns, talks and press events.

In January 2023, the SFC hosted a training module, Hong Kong’s Global Approach to Sustainable Finance, for more than 100 university students to familiarise young people with regulatory and market developments in sustainable finance. The training introduced participants to local and global regulatory initiatives for asset management, corporate disclosures, investment products, stress testing and taxonomies. 

Responsible ownership

The Principles of Responsible Ownership are a set of principles and guidance to assist investors with determining how best to meet their ownership responsibilities. These principles specify that investors should encourage their investee companies to have policies on ESG issues and to engage with them on significant ESG issues which may affect the companies' goodwill, reputation and performance.

ESG ratings and data product providers

In October 2023, the SFC announced its support and sponsorship for developing a code of conduct for voluntary adoption by ESG ratings and data products providers providing products and services in Hong Kong. 

The Voluntary Code of Conduct (VCoC) will be developed via an industry-led working group, namely the Hong Kong ESG Ratings and Data Products Providers VCoC Working Group (VCWG), with the International Capital Market Association (ICMA) as the Secretariat of the VCWG. Further details are available in the terms of reference and participation list of the VCWG published by the ICMA.

Last update: 30 Nov 2023

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