Environmental, social and governance (ESG) factors can affect a company's operations, risks and returns. Assessing its performance in these three areas helps investors analyse its prospects and long-term investment returns.
MPF funds invest over several decades, so ESG risks that may affect members belong in investment decisions and risk management. Trustees and investment managers both have a duty to assess the financial significance of these risks and respond responsibly.
The MPFA promotes ESG integration in MPF investment from a financial risk management perspective through governance, strategy, risk management and disclosure. Trustees must prepare annual governance reports for each scheme, explain their sustainable investing strategies and progress, and communicate clearly with members.
An ESG constituent fund makes ESG factors a key investment focus and reflects this in its investment objectives and/or strategies. Members should use the scheme brochure and ongoing disclosures to understand the fund’s approach, how it achieves its ESG focus and the associated risks.
Features · ESG Investment Strategies of ESG CFs · Enhanced Disclosure Requirements for ESG CFs
The Green and Sustainable Finance Cross-Agency Steering Group was established in May 2020, with the HKMA and the SFC as co-chairs and the MPFA as a member. It coordinates climate and environmental risk management in the financial sector, accelerates green and sustainable finance in Hong Kong and supports the Government's climate strategies.