ESG Global Vision

Non-financial reporting, government-led standards

In force

Hong Kong companies, unless exempted under section 388(3) of the CO

Under section 388 of the CO, unless a Hong Kong company is exempted under the CO, the company is required to prepare a directors' report for each financial year.  Schedule 5 of the CO provides the contents of the directors' report: the contents relevant to ESG include a discussion on the company's environmental policies and performance and on the company's compliance with the relevant laws and regulations that have a significant impact on the company.

A director of a company who fails to take all reasonable steps to secure compliance with the above requirements commits an offence and is liable to a fine of HK$150,000. A director who wilfully fails to do so commits an offence and is liable to a fine of HK$150,000 and to 6 months’ imprisonment.

Corporate governance policies, environmental policies.

In force

Authorised institutions defined under the Banking Ordinance (Cap. 155 of the laws of Hong Kong) (the “Banking Ordinance”) to mean (a) a bank, (b) a restricted licence bank; or (c) a deposit-taking company

The Hong Kong Monetary Authority ("HKMA") issued a new module in its Supervisory Policy Manual ("SPM") entitled: GS-1 “Climate Risk Management”.

The SPM sets out the HKMA's latest supervisory policies and practices and minimum standards authorised institutions ("AIs") are expected to attain in order to satisfy the requirements of the Banking Ordinance and recommendations on best practices that AIs should aim to achieve. 

SPM GS-1 provides high-level guidance to AIs on building climate resilience by incorporating climate considerations into the following:

1. governance: AIs should establish a governance structure and identify the relevant roles and responsibilities of the board and the management, and set a risk appetite statement, climate goals and relevant actions for the AI;
2. strategy: AIs should formulate a strategic assessment for climate goals covering all aspects of the AI’s operations and carry out effective strategy implementation by aligning resources and defining roles within the organisational structures;
3. risk management: AIs should identify and measure (where applicable) climate-related risks at the portfolio, counterparty, and transactional levels, conduct scenario analysis and stress testing, monitor the process, and report exposures to climate-related risks; and
4. disclosure: AIs should take actions to prepare climate-related disclosures that align with recommendations introduced by the Task Force on Climate-Related Financial Disclosures, and make their first climate-related disclosures by mid-2023. AIs are then required to make disclosure at least on an annual basis, and are encouraged to adopt the comply-or-explain approach.

The SPM GS-1 was issued on 30 December 2021.

Environmental policies, corporate governance policies

Voluntary standards

Authorised institutions

The HKMA strongly encourages AIs to enhance their own overall green and sustainability programmes to encompass both management of climate risks and supporting measures to contribute to carbon neutrality.

The HKMA has shared the following sound practices adopted by some banks that are of reference value to AIs in formulating their own climate strategies, including:

1. reducing greenhouse gas emissions of their own operations;
2. reducing financed emissions through portfolio alignment;
3. assisting clients to transition; and
4. promoting collective efforts to assist the economy to transition to net zero.

Environmental policies, corporate governance policies

Voluntary standards

Authorised institutions

The HKMA encourages AIs to take into consideration the guidance in the Principles for the Effective Management and Supervision of Climate-related Financial Risks issued by the Basel Committee on Banking Supervision when strengthening their management of climate-related financial risks and implementing the SPM module GS-1 on climate risk management.

The principles cover areas including corporate governance, internal controls, capacity and liquidity adequacy, risk assessment, management and reporting and so forth.

Non-financial reporting, government-led standards.

In force

Listed companies

Hong Kong Exchanges and Clearing Limited ("HKEx") requires listed companies to publish ESG reports on an annual basis and with respect to the same period covered in the company’s annual report. The requirements are set out in the Environmental, Social and Governance Reporting Guide ("ESG Reporting Guide") in Appendix 27 to the Main Board Listing Rules and Appendix 20 to the GEM Listing Rules.

The ESG Reporting Guide focuses on the environmental and social aspects of ESG. The ESG Reporting Guide sets out a list of general disclosures and key performance indicators for companies to report on, which includes both mandatory disclosure requirements, as well as “comply or explain” provisions.

The environmental aspects cover emissions, use of resources, environment and natural resources, and climate change.

The social aspects cover employment, health and safety of employees, development and training of employees, labour standards, supply chain management, product responsibility, anti-corruption and community investment.

Non-financial reporting, government-led standards

In force

Listing applicants

The HKEx requires listing applicants to disclose the following matters in their prospectus:

1. board diversity policy;
2. details of the applicant's risk management policies and procedures, including but not limited to corporate governance measures and on-going measures to monitor the effectiveness of these policies and procedures; and
3. details of the applicant's risk management and internal control systems, including processes used to identify, evaluate and manage significant ESG risks, including climate-related risks.

In particular, the guidance letter states that it is important for applicants to put in place mechanisms that enable them to meet the HKEx’s requirements on corporate governance and ESG well in advance, so that they are  compliant upon listing.

Non-financial reporting, government-led standards

In force

Hong Kong companies, unless exempted under section 388(3) of the CO

Under section 388 of the CO, unless a Hong Kong company is exempted under the CO, the company is required to prepare a directors' report for each financial year.  Schedule 5 of the CO provides the contents of the directors' report: the contents relevant to ESG include a discussion on the company's environmental policies and performance and on the company's compliance with the relevant laws and regulations that have a significant impact on the company.

A director of a company who fails to take all reasonable steps to secure compliance with the above requirements commits an offence and is liable to a fine of HK$150,000. A director who wilfully fails to do so commits an offence and is liable to a fine of HK$150,000 and to 6 months’ imprisonment.

Corporate governance policies, environmental policies.

In force

Authorised institutions defined under the Banking Ordinance (Cap. 155 of the laws of Hong Kong) (the “Banking Ordinance”) to mean (a) a bank, (b) a restricted licence bank; or (c) a deposit-taking company

The Hong Kong Monetary Authority ("HKMA") issued a new module in its Supervisory Policy Manual ("SPM") entitled: GS-1 “Climate Risk Management”.

The SPM sets out the HKMA's latest supervisory policies and practices and minimum standards authorised institutions ("AIs") are expected to attain in order to satisfy the requirements of the Banking Ordinance and recommendations on best practices that AIs should aim to achieve. 

SPM GS-1 provides high-level guidance to AIs on building climate resilience by incorporating climate considerations into the following:

1. governance: AIs should establish a governance structure and identify the relevant roles and responsibilities of the board and the management, and set a risk appetite statement, climate goals and relevant actions for the AI;
2. strategy: AIs should formulate a strategic assessment for climate goals covering all aspects of the AI’s operations and carry out effective strategy implementation by aligning resources and defining roles within the organisational structures;
3. risk management: AIs should identify and measure (where applicable) climate-related risks at the portfolio, counterparty, and transactional levels, conduct scenario analysis and stress testing, monitor the process, and report exposures to climate-related risks; and
4. disclosure: AIs should take actions to prepare climate-related disclosures that align with recommendations introduced by the Task Force on Climate-Related Financial Disclosures, and make their first climate-related disclosures by mid-2023. AIs are then required to make disclosure at least on an annual basis, and are encouraged to adopt the comply-or-explain approach.

The SPM GS-1 was issued on 30 December 2021.

Environmental policies, social policies, corporate governance policies

Voluntary standards

Investors

The SFC has issued a set of non-binding principles to assist investors in determining how best to meet their ownership responsibilities. SFC encourages investors to adopt the principles and disclose how they have done so, or explain why aspects of the principles do not, or cannot apply to them. In summary, investors should:

1. establish and report to stakeholders their policies for discharging their ownership responsibilities;
2. monitor investee companies on matters such as corporate governance and ESG related practices, and engage with investee companies on significant ESG issues that have potential impact on the companies' goodwill, reputation and performance;
3. establish clear policies on when to escalate their engagement activities, including scenarios when investors may have concerns about the company's performance or governance on ESG matters;
4. have clear policies on voting guidance;
5. be willing to act collectively with other investors when appropriate;
6. report to their stakeholders on how they have discharged their ownership responsibilities at least annually; and
7. when investing on behalf of clients, have policies on managing conflicts of interests.

Environmental policies, corporate governance policies

Voluntary standards

Authorised institutions

The HKMA strongly encourages AIs to enhance their own overall green and sustainability programmes to encompass both management of climate risks and supporting measures to contribute to carbon neutrality.

The HKMA has shared the following sound practices adopted by some banks that are of reference value to AIs in formulating their own climate strategies, including:

1. reducing greenhouse gas emissions of their own operations;
2. reducing financed emissions through portfolio alignment;
3. assisting clients to transition; and
4. promoting collective efforts to assist the economy to transition to net zero.

Environmental policies, corporate governance policies

Voluntary standards

Authorised institutions

The HKMA encourages AIs to take into consideration the guidance in the Principles for the Effective Management and Supervision of Climate-related Financial Risks issued by the Basel Committee on Banking Supervision when strengthening their management of climate-related financial risks and implementing the SPM module GS-1 on climate risk management.

The principles cover areas including corporate governance, internal controls, capacity and liquidity adequacy, risk assessment, management and reporting and so forth.

Non-financial reporting, government-led standards.

In force

Listed companies

Hong Kong Exchanges and Clearing Limited ("HKEx") requires listed companies to publish ESG reports on an annual basis and with respect to the same period covered in the company’s annual report. The requirements are set out in the Environmental, Social and Governance Reporting Guide ("ESG Reporting Guide") in Appendix 27 to the Main Board Listing Rules and Appendix 20 to the GEM Listing Rules.

The ESG Reporting Guide focuses on the environmental and social aspects of ESG. The ESG Reporting Guide sets out a list of general disclosures and key performance indicators for companies to report on, which includes both mandatory disclosure requirements, as well as “comply or explain” provisions.

The environmental aspects cover emissions, use of resources, environment and natural resources, and climate change.

The social aspects cover employment, health and safety of employees, development and training of employees, labour standards, supply chain management, product responsibility, anti-corruption and community investment.

Non-financial reporting, government-led standards

In force

Listing applicants

The HKEx requires listing applicants to disclose the following matters in their prospectus:

1. board diversity policy;
2. details of the applicant's risk management policies and procedures, including but not limited to corporate governance measures and on-going measures to monitor the effectiveness of these policies and procedures; and
3. details of the applicant's risk management and internal control systems, including processes used to identify, evaluate and manage significant ESG risks, including climate-related risks.

In particular, the guidance letter states that it is important for applicants to put in place mechanisms that enable them to meet the HKEx’s requirements on corporate governance and ESG well in advance, so that they are  compliant upon listing.

Environmental policies, social policies, corporate governance policies

Voluntary standards

Investors

The SFC has issued a set of non-binding principles to assist investors in determining how best to meet their ownership responsibilities. SFC encourages investors to adopt the principles and disclose how they have done so, or explain why aspects of the principles do not, or cannot apply to them. In summary, investors should:

1. establish and report to stakeholders their policies for discharging their ownership responsibilities;
2. monitor investee companies on matters such as corporate governance and ESG related practices, and engage with investee companies on significant ESG issues that have potential impact on the companies' goodwill, reputation and performance;
3. establish clear policies on when to escalate their engagement activities, including scenarios when investors may have concerns about the company's performance or governance on ESG matters;
4. have clear policies on voting guidance;
5. be willing to act collectively with other investors when appropriate;
6. report to their stakeholders on how they have discharged their ownership responsibilities at least annually; and
7. when investing on behalf of clients, have policies on managing conflicts of interests.

Non-financial reporting, government-led standards.

In force

Listed companies

Chapter 13 to the Main Board Listing Rules and Chapter 17 to the GEM Rules provides for continuing obligations a listed company has to comply with once its securities have been admitted to listing.

In terms of social aspects, listed company boards must have a policy concerning diversity of board members, and shall disclose the policy on diversity or a summary of the policy in the corporate governance policy. As noted in the listing rules, while diversity of board members can be achieved through consideration of a number of factors (including but not limited to gender, age, cultural and educational background, or professional experience), the HKEx do not consider diversity to be achieved for a single gender board.

As a transitional arrangement, listed companies with a single gender board will have to appoint at least a director of a different gender on the board no later than 31 December 2024.

Government-led standards, social policies

In force

All companies and occupiers of premises

A company is liable for its employee's occupational safety and health under common law, the Occupational Safety and Health Ordinance (Cap. 509 of the laws of Hong Kong), the Factories and Industrial Undertakings Ordinance (Cap. 59 of the laws of Hong Kong) and the Employees' Compensation Ordinance (Cap. 282 of the laws of Hong Kong). In general, every employer must (so far as reasonably practicable) ensure the safety and health at work of all his employees. Duties include:

1. providing and maintaining a safe and risk free plant, and system of work;
2. making arrangements for ensuring safety and absence of risks to health in connection with the use, handling, storage or transport of plant or substances;
3. providing information, instruction, training and supervision as necessary to ensure the safety and health of employees at work; and
4. providing and maintaining access to a risk free workplace and work environment.

The Hong Kong Labour Department also issues a range of Codes of Practice on health and safety issues for various occupations, including industrial diving, manual electric arc welding and bamboo scaffolding.  

Government-led standards, social policies

In force

All companies

Individuals, including employees, are protected from discrimination on the grounds of sex, marital status, disability, family status, race and breastfeeding under the Sex Discrimination Ordinance (Cap. 480 of the laws of Hong Kong), the Disability Discrimination Ordinance (Cap. 487 of the laws of Hong Kong), the Family Status Discrimination Ordinance (Cap. 527 of the laws of Hong Kong) and the Race Discrimination Ordinance (Cap. 602 of the laws of Hong Kong). 

These anti-discrimination statutes prohibit direct and indirect discrimination on the ground of a protected characteristic (as listed above) both in the context of employment but also in other prescribed areas of activities, including education, provision of goods, services and/or facilities, participation in clubs and activities of the Government.

These statutes also contain prohibitions against sexual, disability, racial and breastfeeding harassment. It is also prohibited to victimize an individual (i) on the ground of disability or race, or (ii) which occurs when an individual is treated less favourably on the ground that the individual has made allegations of unlawful discrimination or harassment, or has commenced proceedings under or taken steps to enforce any anti-discrimination statutes. 

Non-financial reporting, government-led standards

In force

Hong Kong companies, unless exempted under section 388(3) of the CO

Under section 388 of the CO, unless a Hong Kong company is exempted under the CO, the company is required to prepare a directors' report for each financial year.  Schedule 5 of the CO provides the contents of the directors' report: the contents relevant to ESG include a discussion on the company's environmental policies and performance and on the company's compliance with the relevant laws and regulations that have a significant impact on the company.

A director of a company who fails to take all reasonable steps to secure compliance with the above requirements commits an offence and is liable to a fine of HK$150,000. A director who wilfully fails to do so commits an offence and is liable to a fine of HK$150,000 and to 6 months’ imprisonment.

Non-financial reporting, government-led standards.

In force

Listed companies

Hong Kong Exchanges and Clearing Limited ("HKEx") requires listed companies to publish ESG reports on an annual basis and with respect to the same period covered in the company’s annual report. The requirements are set out in the Environmental, Social and Governance Reporting Guide ("ESG Reporting Guide") in Appendix 27 to the Main Board Listing Rules and Appendix 20 to the GEM Listing Rules.

The ESG Reporting Guide focuses on the environmental and social aspects of ESG. The ESG Reporting Guide sets out a list of general disclosures and key performance indicators for companies to report on, which includes both mandatory disclosure requirements, as well as “comply or explain” provisions.

The environmental aspects cover emissions, use of resources, environment and natural resources, and climate change.

The social aspects cover employment, health and safety of employees, development and training of employees, labour standards, supply chain management, product responsibility, anti-corruption and community investment.

Non-financial reporting, government-led standards

In force

Listing applicants

The HKEx requires listing applicants to disclose the following matters in their prospectus:

1. board diversity policy;
2. details of the applicant's risk management policies and procedures, including but not limited to corporate governance measures and on-going measures to monitor the effectiveness of these policies and procedures; and
3. details of the applicant's risk management and internal control systems, including processes used to identify, evaluate and manage significant ESG risks, including climate-related risks.

In particular, the guidance letter states that it is important for applicants to put in place mechanisms that enable them to meet the HKEx’s requirements on corporate governance and ESG well in advance, so that they are  compliant upon listing.

Non-financial reporting, government-led standards

In force

Hong Kong companies, unless exempted under section 388(3) of the CO

Under section 388 of the CO, unless a Hong Kong company is exempted under the CO, the company is required to prepare a directors' report for each financial year.  Schedule 5 of the CO provides the contents of the directors' report: the contents relevant to ESG include a discussion on the company's environmental policies and performance and on the company's compliance with the relevant laws and regulations that have a significant impact on the company.

A director of a company who fails to take all reasonable steps to secure compliance with the above requirements commits an offence and is liable to a fine of HK$150,000. A director who wilfully fails to do so commits an offence and is liable to a fine of HK$150,000 and to 6 months’ imprisonment.

Government-led standards, social policies

In force

All companies and occupiers of premises

A company is liable for its employee's occupational safety and health under common law, the Occupational Safety and Health Ordinance (Cap. 509 of the laws of Hong Kong), the Factories and Industrial Undertakings Ordinance (Cap. 59 of the laws of Hong Kong) and the Employees' Compensation Ordinance (Cap. 282 of the laws of Hong Kong). In general, every employer must (so far as reasonably practicable) ensure the safety and health at work of all his employees. Duties include:

1. providing and maintaining a safe and risk free plant, and system of work;
2. making arrangements for ensuring safety and absence of risks to health in connection with the use, handling, storage or transport of plant or substances;
3. providing information, instruction, training and supervision as necessary to ensure the safety and health of employees at work; and
4. providing and maintaining access to a risk free workplace and work environment.

The Hong Kong Labour Department also issues a range of Codes of Practice on health and safety issues for various occupations, including industrial diving, manual electric arc welding and bamboo scaffolding.  

Environmental policies, social policies, corporate governance policies

Voluntary standards

Investors

The SFC has issued a set of non-binding principles to assist investors in determining how best to meet their ownership responsibilities. SFC encourages investors to adopt the principles and disclose how they have done so, or explain why aspects of the principles do not, or cannot apply to them. In summary, investors should:

1. establish and report to stakeholders their policies for discharging their ownership responsibilities;
2. monitor investee companies on matters such as corporate governance and ESG related practices, and engage with investee companies on significant ESG issues that have potential impact on the companies' goodwill, reputation and performance;
3. establish clear policies on when to escalate their engagement activities, including scenarios when investors may have concerns about the company's performance or governance on ESG matters;
4. have clear policies on voting guidance;
5. be willing to act collectively with other investors when appropriate;
6. report to their stakeholders on how they have discharged their ownership responsibilities at least annually; and
7. when investing on behalf of clients, have policies on managing conflicts of interests.

Government-led standards, environmental policies, social policies

In force

All

A number of international conventions and treaties are applicable to Hong Kong, including but not limited to the following categories:

1. hazardous waste: Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal, 1989;
2. hazardous chemicals: Rotterdam Convention;
3. ozone layer protection: Vienna Convention for the Protection of the Ozone Layer, 1985, as supplemented by a Protocol in 1987 (Eleventh edition (2018));
4. conservation: Convention on the Conservation of Migratory Species of Wild Animals, 1979 and Convention of biological diversity and Cartagena Protocol on Biosafety; and
5. mercury: The Minamata Convention on Mercury.

Furthermore, environmental law in Hong Kong is overseen by a number of regulatory authorities, including the Agriculture, Fisheries and Conservation Department, the Environmental Protection Department, the Food and Environment Hygiene Department and the Town Planning Board. The Environmental Protection Department is the main enforcement body that prosecutes offenders who have breached any of the relevant environmental laws.

Government-led standard, social policy

In force

All

In Hong Kong, there is no consolidated single piece of legislation concerning cyber security. Rather, the Hong Kong legal framework is formed by a patchwork of legislation, including:

1. the Personal Data (Privacy) Ordinance (Cap. 486 of the laws of Hong Kong) which contains six data protection principles and outlines how data users (including companies) should collect, handle and use personal data, complemented by other provisions imposing further compliance requirements; and
2. the Unsolicited Electronic Messages Ordinance (Cap. 593 of the laws of Hong Kong) which regulates the sending of unsolicited commercial electronic messages, such as SMS, pre-recorded messages and spam emails.

Companies are required to adopt relevant data protection and management policies to ensure regulatory compliance and minimize data privacy and cyber security risks. 

Government-led standard, social policy

In force

All

In Hong Kong, the overarching protection against human trafficking is set out in Article 4 of the Hong Kong Bill of Rights:

1. no one shall be held in slavery; slavery and the slave-trade in all their forms shall be prohibited;
2. no one shall be held in servitude; and
3. no one shall be required to perform forced or compulsory labour.

Government-led standard, social policy

In force

All

In Hong Kong, the Prevention of Bribery Ordinance (Cap. 201 of the laws of Hong Kong) (the "POBO") governs both public and private sector corruption.

In the private sector, the POBO provides that no agent (usually an employee) shall solicit or accept any advantage without the permission of his principal (usually the company) when conducting his principal's affairs or business. There is no financial limit or threshold for the monetary value of an advantage. For the avoidance of doubt, "advantage" includes money, gifts, loans, commissions, offices, contracts, services, favours and discharge of a liability in whole or in part, but does not include entertainment. The offeror is also guilty of an offence.

As a key aspect of governance, companies in Hong Kong are strongly encouraged to implement proper risk management and anti-corruption measures, such as preventative measures, whistle-blowing processes, and provide anti-corruption training to their staff.

Corporate governance policies

Voluntary standards

Licensed corporations

The SFC has issued multiple circulars and guidance on cyber security, including: 

1. SFC circular on the use of external electronic data storage dated 31 October 2019 which reminds licensed corporations of the requirements on the use of external data storage providers and the requirement to seek SFC's approval prior to using any premises for storing these records;
2. SFC Guidelines for Reducing and Mitigating Hacking Risks Associated with Internet Trading which reminds licensed corporations of the importance of cyber security management and supervision, infrastructure security management and protection of clients' internet trading accounts; and
3. SFC Good Industry Practices for IT Risk Management and Cyber security dated 27 October 2017 which sets out a range of good practices ranging from general cyber security governance, system access control and data protection, to cyber-attack simulation and incident responses.

Corporate governance policies

Voluntary standards

Licensed corporations

The SFC circular sets out the SFC's view that senior management of a licensed corporation includes, among others, directors of the corporation, responsible officers of the licensed corporation and individuals whom are Managers-In-Charge of Core Functions.

The SFC has issued various codes and guidelines that provide guidance on the responsibilities of senior management of licensed corporations. In particular:

1. General Principle 9 of the Code of Conduct;
2. Paragraph 14.1 of the Code of Conduct; and
3. the Guideline on Anti-Money Laundering and Counter-Terrorist Financing.

Non-financial reporting, government-led standards

Voluntary standards

SFC-authorised unit trusts and mutual funds which incorporate ESG factors as their key investment focus and reflect such in their investment objectives and/or strategy – all such ESG funds are available on SFC’s central database

While the Securities and Futures Commission (“SFC”) circulars are not subsidiary legislation and hence failure to comply with such guidance will not by itself render a person liable to any judicial or other proceedings, it was stated on the SFC website that breach of codes and guidelines may lead to disciplinary action.  That said, we have not yet seen any public enforcement actions by the SFC with respect to its ESG regulations.

This circular sets out updated disclosure standards for ESG funds, which includes periodic assessments and reporting for ESG funds and additional guidance for funds with a climate-related focus. The circular also sets out naming requirements for ESG funds and information that needs to be disclosed in the ESG funds’ offering documents, including but not limited to the ESG focus of the fund and criteria used to measure fulfilment, the ESG investment strategy and the proportion of securities or other investments that are commensurate with the fund's ESG focus.

These standards and requirements took effect on 1 January 2022.

Non-financial reporting, government-led standards

Voluntary standards

Fund managers managing collective investment schemes (note that certain requirements are not applicable to discretionary account managers)

This SFC circular sets out the expected standards for complying with amendments to the Fund Manager Code of Conduct in four areas: (i) governance, (ii) investment management, (iii) risk management, and (iv) disclosure. These will require fund managers managing collective investment schemes to take climate-related risks into consideration in their investment and risk management processes and make appropriate disclosures.

The new requirements set out in the circular took effect in August or November 2022, depending on the type of fund manager and the size of the collective investment schemes managed.

Environmental policies, social policies

Voluntary standards

Bond and loan issuers

The Hong Kong Quality Assurance Agency ("HKQAA") has developed the Green and Sustainable Finance Certification Scheme with reference to a number of international and national standards on green finance.

The scope of certification services cover green and sustainable subjects, including sustainability-linked or green and climate transition requirements.

The certification scheme covers both pre-issuance and post-issuance stage certification, with the aim of enhancing credibility and stakeholder confidence in green and sustainable finance.

Environmental policies, corporate governance policies

Voluntary standards

Financial services sector

In May 2020, the HKMA and the SFC initiated the establishment of the Green and Sustainable Finance Cross-Agency Steering Group ("Steering Group"), a multi-regulator steering group which aims at coordinating the management of climate and environmental risks to the financial sector and accelerating the growth of green and sustainable finance ("GSF") in Hong Kong, while supporting the Hong Kong government’s climate strategies.

The Steering Group launched the Centre for Green and Sustainable Finance ("GSF Centre"), a cross-sector platform which coordinates the efforts of financial regulators, government agencies, industry stakeholders and  academia in formulating recommendations regarding capacity building and green and sustainable finance data availability for the financial industry.  

Two working groups established under the GSF Centre recommend the following measures in respect of capacity building and GSF data constraints faced by the financial services sector:

1. developing a common GSF qualification framework;
2. supporting practitioners and young people in taking up GSF training;
3. providing young people with practical industry experience;
4. enhancing access to and availability of GSF dating and data analytics tools; and
5. filling in the key data gaps identified by market participants.

Environmental policies, corporate governance policies

Voluntary standards

MPF approved trustees

The Mandatory Provident Fund Schemes Authority ("MPFA") formed a working group with Mandatory Provident Fund ("MPF") trustees in 2021 to deliberate and formulate how MPF trustees should integrate ESG factors into the investment and risk management processes of MPF funds and make disclosures to MPF scheme members.

The principles cover four key elements:

1. governance: MPF trustees should have a governance framework to monitor management of ESG risks by investment managers;
2. strategy: MPF trustees should formulate an ESG integration strategy at the MPF scheme level;
3. risk management: MPF trustees should ensure consideration of ESG factors in the investment and risk management processes of MPF funds; and
4. disclosure: MPF trustees should disclose ESG integration strategies and report implementation progress regularly, including the metrics and targets adopted.