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ESG Updates - December 2020 Issue

22 December 2020

To achieve corporate sustainability and generate long-term benefits, the integration of environmental, social and governance (ESG) factors into one company's business strategies, management and operation is the key to success. In every monthly issue of our 'ESG Updates', it will include the latest updates from various aspects in ESG.

SFC proposes climate risk requirements for asset managers

On 29 October 2020, Hong Kong's Securities and Futures Commission (SFC) issued a consultation paper on proposed amendments to the Fund Manager Code of Conduct (FMCC) that would require fund managers to consider climate-related risks in their investment and risk management processes. The amendments would also require fund managers to make appropriate disclosures to meet investors' growing demands for climate risk information and to combat greenwashing.

The consultation paper proposes amendments to the FMCC addressing climate-related risks in four key areas: governance, investment management, risk management and disclosure. In developing these requirements, the SFC has referred to the recommendations of the Financial Stability Board's Task Force on climate-related financial disclosures (TCFD) to foster a more consistent disclosure framework and minimise the industry's compliance burden.