Hong Kong’s pension ruler said that money managers should increase their disclosure standards on the environment, social and governance (ESG) funds to help contributors to understand their risk management and investment strategies
The 12 participating fund managers, or managers, including HSBC and Manulife, must improve the transparency levels at ESG-related reports in their pension schemes, said the compulsory provider fund Schemes Authority (MPFA) on Monday.
The managers 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, said director Cheng Yan-Chee. They must also assess their performance and make them public in annual board reports to investors, he added.
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“This approach enables schedule members to evaluate whether the ESG performance of the funds match their expectations,” said Cheng. “It is also intended to deepen their understanding of ESG funds and to make better investment decisions.”
Managing Director Cheng Yan-Chee (left) and executive director (members and supervision) Kenneth Chan, speak on 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 on 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) in assets will be influenced by the new measure, according to Kenneth Chan, an executive director responsible for MPF members and supervision. New funds with ESG theme should also satisfy when it was launched, he added.
Although the directive was immediately in force, the fund managers would be given until 30 September to ensure that their ESG opposite making levels match the new guidelines, Cheng added.
The MPF schedule is a mandatory pension plan for the government drawn up in 2000, involving the 4.75 million employees of the city. The scheme had a HK $ 1,326 trillion in total assets on 30 September, including investment profits. The members can choose to cash in after reaching 65.
The MPFA said it was important that fund managers apply serious investment and risk tools to weigh climate change and other sustainability elements and at the same time chase returns. The inclusion of sustainability factors would also enable MPF members to contribute to a more sustainable future, said Cheng.
