2020年推動香港成為亞洲全球環境、社會及管治（ESG）投資樞紐 - 香港金融發展局（英文版）（25頁）.pdf

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1、Hong Kong Developing into the Global ESG Investment Hub of Asia July 2020 FSDC Paper No.44 Content Foreword A Cluster of Key Stakeholders is Building Up in Hong Kong ESG is Integral to Hong Kong as an International Financial Centre How Did Hong Kong Get Here? Connecting the Dots by Letting Stakehold

2、ers Hear Each Other The “Hong Kong Solution” Conclusion 1 2 3 4 7 9 22 FSDCs report “Hong Kong as a Regional Green Finance Hub” 2016 FSDCs report “ESG Strategy for Hong Kong” 2018 FSDCs report “ESG Integration the Continuous Journey for Hong Kong” 2020 Foreword Green fi nance has become one of the k

3、ey agenda items of the Financial Services Development Council (“FSDC”) since four years ago. In May 2016, the FSDC published a research report, with an aim of helping Hong Kong position itself as a preferred centre for green fi nance in the region. At that time, green fi nance was at its nascent sta

4、ge for Hong Kong as well as many other fi nancial centres in Asia. The centre of gravity has shifted rapidly since then. Discussions within the fi nancial services industry about green fi nance have further been extended to cover the wider spectrum of Environmental, Social and Governance (“ESG”) mat

5、ters. Amid the fast-evolving landscape, in November 2018, the FSDC published a relevant report (the “2018 report”) to present the value proposition of ESG integration from the perspectives of both fi nancial investors and investee companies. The report also sets out key recommendations for fostering

6、 the development of an ESG ecosystem in Hong Kong, focusing on the part of the public sector. In about a years time, most of the recommendations have been implemented and a handful of others are in progress. On the back of such momentum, Hong Kong as an ESG investment hub has entered the growth stag

7、e. In this paper, the FSDC looks into how better the efforts of the public and private sectors can be coordinated for the further development of the ESG investment ecosystem of Hong Kong. The overarching theme is to map out what have been done and what else could be done to nurture this ecosystem. P

8、HASE 1 LAUNCHPHASE 2 GROWTH 1 A Cluster of Key Stakeholders is Building Up in Hong Kong A critical factor behind the development of ESG investment ecosystems is the concerted effort of key stakeholders, a cluster of which has emerged in Hong Kong. Asset owners Asset owners in public and privates sec

9、tors, including pension funds and sovereign wealth funds, are increasingly integrating ESG strategies in their investment portfolios. Asset and wealth managers and product owners (e.g. banks) uncover opportunities, identify risks and generate appealing returns for asset owners and other clients thro

10、ugh incorporating ESG factors into their investment strategies and ongoing engagement with investee companies. Investee companies Enhanced ESG disclosure/ reporting is becoming a commonplace among companies of different sizes, partly due to new regulatory requirements but also enhanced risk-adjusted

11、 returns, lower funding costs, and new sources of capital. Academia, civil society organisations and other stakeholders Universities, non-governmental organisations and professional bodies collaborate to enhance ESG capacity-building. A cluster of stakeholders, including services providers such as i

12、ndex compilers and research providers, is critical in ensuring ESG standards and needed support are in place. Asset and wealth managers and product owners Government and financial regulators A combination of carrots and sticks (i.e., incentives and regulations) has been a common approach adopted by

13、governments and regulators in different markets, and Hong Kong is no exception. 2 3 ESG is Integral to Hong Kong as an International Financial Centre Hong Kongs success as an international fi nancial centre allows the city to enjoy a combination of fi rst-mover advantages in ESG investment initiativ

14、es. Owing to its world-leading capability in capital raising, ample risk management experience and solid expertise in serving international fi nancial actors and investors, Hong Kong attracts a wealth of asset owners and asset managers to explore their ESG investment journey. With green fi nance bei

15、ng key in the development of of the Guangdong - Hong Kong - Macao Greater Bay Area, Hong Kongs role in providing fi nancial services support will likely become more prominent. At the same time, companies in Hong Kong are increasingly incentivised to embrace ESG practices and disclose the relevant in

16、formation for the benefi ts that lie within, including Following the outbreak of the pandemic, market participants believe that investors will further prioritise investments with conscience, placing sustainability at the front and centre of their investment approaches. Fast facts: Enhance risk-adjus

17、ted returns: Researches show that share price of companies with high ESG scores outperformed sector peers through identifi cation, mitigation or management of key risks1; Lower funding costs: High ESG-rated companies generally experience lower levels of beta and thus lower costs of capital (both in

18、terms of cost of debt and cost of equity capital)2; and Attractiveness to new sources of capital and AuM: Globally, fi nancial investors have increasingly expressed commitment to adopt ESG integration, which opens high-quality sources of capital and assets to companies with a strong ESG profi le3. G

19、reen bonds arranged and issued in Hong Kong (2019): US$10bn. Bond issuers with a wide range of diversity, including real estate companies, energy fi rms and fi nancial institutions, and notably multilateral development banks4 Green loans acquired by Hong Kong banks (April 2019): US$2.56bn+5 Green as

20、sets owned by Hong Kong banks (April 2019): US$7.82bn+6 Hong Kong companies recorded the best overall performance in Asia for environmental sustainability (2019)7 1 According to the University of Oxfords meta study (“From the Stockholder to the Stakeholder”, March 2015) of 200 studies, 90% of the st

21、udies found a relationship between strong sustainability performance and lower cost of capital. In 88% of the studies, companies with strong sustainability practices had better operational performance which translated into better cash-fl ow, and that 80% of the studies showed that fi rms with strong

22、 sustainability practices outperformed. These results were also supported (not identical) by a meta study of 2,000 studies on ESG by Deutsche (“ESG and fi nancial performance: aggregated evidence from more than 2,000 empirical studies”, January 2016). 2 ibid. 3 Global Sustainable Investment Alliance

23、s “2018 Global Sustainable Investment Review”, April 2019, found the sustainable investing recorded at almost US$ 31 trillion at the beginning of 2018, a 34% increase since 2016. 4 Climate Bonds Initiative, Hong Kong Green Bond Market Briefi ng, May 2020. 5 According to a survey conducted by HKMA in

24、 2019 which covered approximately 50 banks in Hong Kong as stated in the Belt and Road Global Forums News and Updates, August 2019. 6 ibid. 7 Refi nitiv, Financing a Sustainable Future in Asia”, October 2019. 4 How Did Hong Kong Get Here? Similar to other emerging subject matters, the truly concerte

25、d effort among key stakeholders did not start right at the beginning. It usually takes both incentives and regulations to set out the vision, mission and expectation, and thereafter to map out a strategy and execution plan to achieve the goal. To this end, the FSDC made a number of recommendations i

26、n the 2018 report, with an aim of achieving this fi rst step, i.e. setting the scene for expectations. Encouragingly, most of the recommendations have been adopted in a years time. In the 2018 report, the FSDC recommended Continuous concerted efforts the Government to take leadership role in encoura

27、ging public funds support for ESG integration The Hong Kong Monetary Authority (HKMA), as the manager of the Exchange Fund, announced its responsible investment measures in May 2019, including that it: (a) has incorporated ESG factors in its credit risk analysis of bond investment, (b) has invested

28、two tranches of US$1 billion each in the Managed Co-lending Portfolio Programme run by the International Finance Corporation, (c) will further grow the Exchange Funds green bond portfolio, (d) will participate in ESG-themed public equities investments through external managers in passive and active

29、mandates targeting ESG benchmark index, (e) will accord green accreditation as a key factor in investment in its real estate portfolio, and (f) will consider an appropriate framework for disclosing information on the Exchange Funds Green and ESG investing efforts without arousing market sensitivity

30、in the process. The HKMA has also become a signatory to the Principles for Responsible Investment and a supporter of the Task Force on Climate-related Financial Disclosures (“TCFD”). the HKMA to scale up ESG requirements on external investment managers In August 2019, the HKMA required external mana

31、gers of Hong Kong equities and China active equities portfolios to comply with the Principles of Responsible Ownership issued by the Securities and Futures Commission (SFC) in 2016 on a “comply-or-explain” basis. The external managers of developed market equities portfolios need to adhere to general

32、ly accepted international ESG standards. The HKMA has included ESG factors in the selection, appointment and monitoring of external managers. Asset owners 5 the FSDC also recommended the SFC to strengthen the emphasis on ESG through upgrading the Principles of Responsible Ownership In accordance wit

33、h its Strategic Framework for Green Finance of September 2018 to conduct a survey of asset managers and asset owners participating in the Hong Kong market on their sustainable investment practices, the SFC issued the fi ndings of its survey on licensed asset management fi rms integration of ESG fact

34、ors and climate risks. The survey found that there is signifi cant interest among these fi rms to step up their ESG efforts and management of environmental and climate risks. the SFC (and other relevant regulators) to provide more guidance on ESG thematic investment products In accordance with its S

35、trategic Framework for Green Finance issued in September 2018 to facilitate the development of a wide range of green-related investments by providing disclosure guidance, the SFC published guidance on enhanced disclosures for SFC-authorised green or ESG funds in April 2019. To increase their visibil

36、ity, a central database of these funds has become available on the SFCs website since Q4 of 2019. To help fi rms move forward and more closely align the SFCs regulatory regime with global standards, the SFC intends to, in the near term, set expectations of asset management fi rms in areas such as go

37、vernance and oversight, investment management, risk management and disclosure, focusing on environmental risks with an emphasis on climate change; provide guidance, best practices and training in collaboration with the industry and relevant stakeholders to enhance the capacity of asset management fi

38、 rms to meet the SFCs expectations; and establish an industry group to exchange views amongst the SFC and experts in environmental and climate risks, as well as sustainable fi nance. Asset managers and other product owners The MPFA issued a circular in November 2018 to encourage Mandatory Provident

39、Fund Scheme (MPF) trustees to apply ESG standards in areas such as investment decision-making and disclosure. MPF trustees are also encouraged to discuss with their investment managers the possible inclusion of green bonds in their MPF portfolio holdings. the Mandatory Provident Fund Schemes Authori

40、ty (“MPFA”) to incorporate ESG factors into the trustee approval and monitoring process and to encourage trustees to take into account international ESG standards 6 the Stock Exchange of Hong Kong (“SEHK”) to strengthen the emphasis on ESG for both listing applicants and listed issuers by - (a) requ

41、iring listed issuers ESG reports to demonstrate the issuers governance structure on ESG, with emphasis on the role of the board; (b) clearly elaborating the link between the Corporate Governance (“CG”) Code and the ESG Reporting Guide; and (c) recommending specific ESG disclosure for listing applica

42、nts To further raise the quality of ESG reporting, the SEHK launched a consultation in 2019 to review and revise its ESG Reporting Guide for listed companies. Following strongly supportive responses to this consultation, the SEHK concluded to amend the ESG Reporting Guide and related Listing Rules i

43、n December 2019. The changes include introducing mandatory disclosure requirements regarding ESG governance and boards oversight of ESG issues to emphasise the boards leading role and improve its accountability, requiring climate change disclosure to echo the international focus on the area, and sho

44、rtening the publication deadline for ESG reports to improve timeliness of information. The SEHK also added new Frequently Asked Questions8 in May 2019 to clarify how different aspects of ESG relate to the CG Code. A more elaborated link between CG Code and ESG Reporting Guide will be considered in d

45、ue course, as part of the SEHKs ongoing effort to review the two documents. For listing applicants, the SEHK sets out the expected disclosure of ESG matters, including material information on an applicants environmental policies, and details of the process used to identify, evaluate and manage signi

46、fi cant ESG risks, in the form of Guidance Letter.9 These efforts refl ect the SEHKs commitment to enhancing Hong Kongs ESG regulatory framework and to meeting investor and stakeholder expectations in accordance with international best practices. Investee companies 8 Hong Kong Exchanges and Clearing

47、 Limited (HKEX), FAQs No. 24K and 24L in Series 17 and FAQ No. 2A in Series 18, May 2019. 9 HKEX, HKEX Guidance Letter (HKEX-GL86-16), May 2019. In 2019, the MPFA continued its communication with MPF trustees and their appointed investment managers for further understanding the trend and market deve

48、lopment in ESG investing and adoption of ESG standards by MPF funds. During the year, MPFA also worked with the SFC and invited MPF trustees, in their role as asset owners, to participate in a survey conducted by the SFC on integrating ESG factors and climate risks in asset management. The Internati

49、onal Organisation of Pension Supervisors (“IOPS”) issued supervisory guidelines in October 2019 on the integration of ESG factors in the investment and risk management of pension funds. MPFA, as a member of IOPS, is studying the guidelines and will consider how to adopt accordingly. 7 Connecting the Dots by Letting Stakeholders Hear Each Other ESG integration is a continuous journey. As different groups of stakeholders are respectively adopting and facilitating ESG integration, or increasingly expressing their demand for ESG integ