SFC Releases a Circular Enhancing Disclosure for Green Funds in Hong Kong

The Securities and Futures Commission (“SFC”) issued a circular titled “Circular to management companies of SFC-authorized unit trusts and mutual funds - Green or ESG funds” on 11 April 2019. The SFC has evaluated the disclosure quality of the existing SFC-authorised Green and Environmental, Social and Governance (“ESG”) funds, and found that most of the funds do not disclose the investment selection criteria with ESG elements or standards. The circular therefore provides a guidance on green funds disclosure to enhance the comparability between similar types of SFC-authorised green or ESG funds and thereby improving their transparency and visibility.

Green or ESG funds’ investment focuses are usually on green, environmental or sustainable development and related technology. There are currently over 20 green or ESG funds authorised by the SFC.  The circular sets out a few disclosure requirements for the fund offering documents in order to better inform investors. The requirements include descriptions of the key investment focus of the green or ESG fund, investment strategies with relevant green or ESG criteria and risks associated with green or ESG funds’ investment theme. To prove that they have met particular assessment criteria, the fund may provide reference to any ESG ratings or third-party certificates or labels.

In fact, not all the green or ESG funds necessarily generate net positive outcome for the environment and sustainability. Some investments of the green or ESG funds may even have potential negative impacts. For example, the solar power plants investments have positive environmental impacts but may have negative social impacts due to the operation process and use of space. Therefore, the detailed disclosure and the third-party certification can help to increase the transparency of the funds, and thus investors not only can understand the environmental aspect, but also the aspects on social and governance.

Many investors may still underestimate the impacts of environmental factors on the business operation and profitability. ESG development is a key for long-term business success. The market has already noticed the importance of ESG and initiated changes. This green fund disclosure guidance is a good example to show the market’s trend with increasing focus on ESG aspect. Not only the green or ESG funds, but all companies should reflect on their sustainable business strategy to ensure business success.


證監會發布通函以加強香港綠色基金或環境、社會及管治基金的披露


證券及期貨事務監察委員會(「證監會」)於二零一九年四月十一日發出一份名為「Circular to management companies of SFC-authorized unit trusts and mutual funds Green or ESG funds」的通函。證監會已評估現有證監會認可綠色基金或環境、社會及管治(「ESG」)基金的披露質素,發現大多數基金沒有披露投資揀選準則如何與ESG因素或標準結合。因此,該通函提供了綠色基金披露指引,以提高證監會認可及類似的綠色或ESG基金之間的可比性,從而提高其透明度和可見度。

綠色或ESG基金的投資重點通常是有關綠色、環境或可持續發展及相關技術。目前,證監會已認可超過20項綠色或ESG基金。該通函規定了基金發行文件的一些披露要求,為投資者提供更好的資訊。披露的要求包括綠色或ESG基金的關鍵投資重點描述、具有相關綠色或ESG標準的投資策略以及與綠色或ESG基金投資主題相關的風險。為了證明他們符合特定的評估標準,基金可提供任何ESG評級或第三方證書或標籤。

事實上,並非所有綠色或ESG基金都必然會為環境和可持續性帶來淨正面的結果。綠色或ESG基金的一些投資甚至可能產生潛在的負面影響。例如,太陽能發電廠的投資具有正面的環境影響,但也有可能因運營過程及空間使用而產生負面的社會影響。因此,詳細披露以及具有第三方認證有助於提高資金的透明度,投資者不僅可以了解有關環境的影響,還可以了解到社會和管治方面的相關潛在影響。

然而,許多投資者可能仍然低估環境因素對業務運營和盈利能力的影響。 ESG發展是實現長期業務成功的關鍵。市場已經注意到ESG的重要性, 更開始了一定程度上的改變及革新。這綠色基金披露指引正正是一個很好的例子,充份顯示了現時市場越來越關注ESG方面的發展。因此不僅是綠色或ESG基金,所有公司都應該反思他們的可持續業務戰略,以確保業務成功。


证监会发布通函以加强香港绿色基金或环境、社会及管治基金的披露


证券及期货事务监察委员会(「证监会」)于二零一九年四月十一日发出一份名为「Circular to management companies of SFC-authorized unit trusts and mutual funds Green or ESG funds」的通函。证监会已评估现有证监会认可绿色基金或环境、社会及管治(「ESG」)基金的披露质素,发现大多数基金没有披露投资拣选准则如何与ESG因素或标准结合。因此,该通函提供了绿色基金披露指引,以提高证监会认可及类似的绿色或ESG基金之间的可比性,从而提高其透明度和可见度。

绿色或ESG基金的投资重点通常是有关绿色、环境或可持续发展及相关技术。目前,证监会已认可超过20项绿色或ESG基金。该通函规定了基金发行文件的一些披露要求,为投资者提供更好的资讯。披露的要求包括绿色或ESG基金的关键投资重点描述、具有相关绿色或ESG标准的投资策略以及与绿色或ESG基金投资主题相关的风险。为了证明他们符合特定的评估标准,基金可提供任何ESG评级或第三方证书或标签。

事实上,并非所有绿色或ESG基金都必然会为环境和可持续性带来净正面的结果。绿色或ESG基金的一些投资甚至可能产生潜在的负面影响。例如,太阳能发电厂的投资具有正面的环境影响,但也有可能因运营过程及空间使用而产生负面的社会影响。因此,详细披露以及具有第三方认证有助于提高资金的透明度,投资者不仅可以了解有关环境的影响,还可以了解到社会和管治方面的相关潜在影响。

然而,许多投资者可能仍然低估环境因素对业务运营和盈利能力的影响。 ESG发展是实现长期业务成功的关键。市场已经注意到ESG的重要性, 更开始了一定程度上的改变及革新。这绿色基金披露指引正正是一个很好的例子,充份显示了现时市场越来越关注ESG方面的发展。因此不仅是绿色或ESG基金,所有公司都应该反思他们的可持续业务战略,以确保业务成功。

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