Green Finance

SFC: Consultation Conclusion on the Management and Disclosure of Climate-related Risks by Fund Managers

Introduction

On 20 August 2021, Hong Kong Securities and Futures Commission (“SFC”) issued the Consultation Conclusions on the Management and Disclosure of Climate-related Risks by Fund Managers. According to the consultation conclusion, fund managers managing collective investment schemes (“CISs”) are proposed to take climate-related risks into consideration in their investment, properly manage the risks, and promote clear, comparable and high-quality disclosures to help investors make more informed decisions. The Fund Manager Code of Conduct is proposed to be amended to reflect the new requirement.

Two-tier approach

A two-tier approach is to be implemented by SFC: (i) set of baseline requirements for all fund managers and (ii) a set of enhanced standards only for large fund managers (fund managers with assets under management that equal or exceed HKD 8 billion).

Large Fund Managers are required to identify the portfolio carbon footprints of the Scope 1 and Scope 2 GHG emissions of funds’ underlying investments and to disclose them in terms of enterprise value.

Implementation timeline

The regulatory requirements for climate-related risks will become effective after the transition periods:

Large Fund Managers

Baseline requirements:
Enhanced standards:

20 August 2022 (12-month transition period)

20 November 2022 (15- month transition period)

All Other Managers

Baseline requirements:

20 November 2022 (15- month transition period)

Please click here for more details.

Link : https://apps.sfc.hk/edistributionWeb/api/consultation/conclusion?lang=EN&refNo=20CP5