Hong Kong's pension regulator said money managers would need to raise their disclosure standards on environment, social and governance (ESG) funds to help contributors understand their risk management and investment strategies
The 12 participating fund managers, or trustees, including HSBC and Manulife, should improve the transparency levels on ESG-related reporting in their pension schemes, the Mandatory Provident Fund Schemes Authority (MPFA) said on Monday.
The trustees must clearly state ESG strategies and focus on risk management in their brochures, as well as how they monitor and measure the ESG factors in their funds, managing director Cheng Yan-chee said. They should also assess their achievements and disclose them in annual governance reports to investors, he added.
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"This approach enables scheme members to evaluate whether the funds' ESG performance aligns with their expectations," Cheng said. "It is also intended to help deepen their understanding of ESG funds and make better investment decisions."
Managing director Cheng Yan-chee (left) and executive director (members and supervision) Kenneth Chan, speak at a media briefing in Wan Chai on February 24, 2025. Photo: Enoch Yiu alt=Managing director Cheng Yan-chee (left) and executive director (members and supervision) Kenneth Chan, speak at a media briefing in Wan Chai on February 24, 2025. Photo: Enoch Yiu>
A total of 47 ESG-related funds with HK$36.6 billion (US$4.71 billion) of assets will be affected by the new measure, according to Kenneth Chan, an executive director in charge of MPF members and supervision. New ESG-themed funds would also need to comply when launched, he added.
While the directive was effective immediately, the fund managers would be given until September 30 to ensure their ESG disclosure levels match the new guidelines, Cheng added.
The MPF scheme is a compulsory government-run retirement plan established in 2000, involving the city's 4.75 million salaried workers. The scheme had HK$1.326 trillion in total assets on September 30, including investment gains. Its members may choose to cash in after reaching 65.
The MPFA said it was important that fund managers applied serious investment and risk tools to weigh climate change and other sustainability elements while chasing returns. Incorporating sustainability factors would allow MPF members to also contribute to a more sustainable future, Cheng said.