• New ESG Guidelines: 12 major fund managers, including HSBC and Manulife, must enhance transparency on ESG investment strategies and risk management.
• Deadline Set: Fund managers have until September 30 to align disclosures with the updated standards.
• Broader Market Shift: The move supports Hong Kong’s drive towards greener capital markets and improved sustainability practices.

Hong Kong’s Mandatory Provident Fund Schemes Authority (MPFA) is enforcing stricter ESG disclosure requirements on 12 pension fund managers to boost transparency in risk management and investment strategies.

The details:

The new regulations require fund managers to:

• Clearly outline ESG strategies and risk management processes in brochures.
• Measure and monitor ESG factors in their funds.
• Report on ESG achievements in annual governance reports.

Related Article: Hong Kong Stock Exchange To Make Climate Disclosures Mandatory For Issuers

Why it matters:

The update impacts 47 ESG-related funds, managing assets worth HK$36.6 billion (US$4.71 billion). New ESG-themed funds must also comply with the rules.

“This approach enables scheme members to evaluate whether the funds’ ESG performance aligns with their expectations,” said Cheng Yan-chee, MPFA Managing Director. “It is also intended to help deepen their understanding of ESG funds and make better investment decisions.”

Bigger picture:

The MPFA’s move aligns with broader initiatives to green Hong Kong’s capital markets. By 2026, major listed firms will also need to disclose emissions from their supply chains, under Hong Kong Exchanges and Clearing rules.

Next steps:

The MPFA will launch the second phase of its eMPF Platform on March 5, aiming for a fully digital, paperless system to cut costs and reduce environmental impact.

“Our aim in the long run is to continue to move towards a greener operating environment, with the ultimate goal of being fully paperless and 100 percent digital,” said Ayesha Macpherson Lau, MPFA Chairwoman.

The bottom line:

The enhanced ESG disclosures and digital transformation of the MPF scheme mark significant steps in aligning financial practices with global sustainability standards.

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