Climate change: Hong Kong orders managers of at least US$1 billion in assets to disclose their investees’ emissions data

Up to a tenth of Hong Kong’s licensed asset managers will be required to disclose greenhouse gas emissions data of their investees

The requirement takes effect from November 2022, according to the Securities and Futures Commission (SFC)

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Smoke and steam from a coal processing plant in Hejin city in central China's Shanxi province on November 28, 2019. Photo: AP

Published: 8:30am, 29 Sep 2021Updated: 11:03am, 29 Sep 2021

Up to a tenth of almost 2,000 Hong Kong licensed asset management firms will be required to disclose greenhouse gas emissions data of their investment portfolios and investees from November 2022, according to the city’s securities watchdog agency.

Some 100 to 200 companies are expected to meet the threshold for mandatory disclosure of greenhouse gas emission data when the requirement takes effect, out of 1,800 to 2,000 asset management firms licensed in Hong Kong, said Julia Leung, the deputy chief executive of the Securities and Futures Commission (SFC).

Fund managers with at least HK$8 billion (US$1.03 billion) of clients’ assets in Hong Kong must make a “reasonable” effort, where data is available or can be reasonably estimated, to report their investees’ and their funds’ greenhouse gas emissions footprint – from fuel combustion and bought energy, under a new regulation announced last month. They must define their methodology and provide underlying assumptions.

They, as well as those below the threshold, will also be required to set up in 12-15 months governance structures and policies to assess, disclose and manage climate risks and opportunities.

Julia Leung Fung-yee, deputy chief executive of the Securities and Futures Commission (SFC) at the SFC’s offices in Quarry Bay on 21 September 2021. Photo: Jonathan Wong

“This requirement is made in light of rising investor interest in funds that integrate environment, social and governance (ESG) issues into investment decision-making, a need to prevent greenwashing and to enhance Hong Kong’s role as an international financial centre in channelling investment into low-carbon projects to fight climate change,” she said in an interview.

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Climate change: Hong Kong orders managers of at least US$1 billion in assets to disclose their investees’ emissions data

Up to a tenth of Hong Kong’s licensed asset managers will be required to disclose greenhouse gas emissions data of their investees The requirement takes effect from November 2022, according to the Securities and Futures Commission (SFC)

Up to a tenth of Hong Kong’s licensed asset managers will be required to disclose greenhouse gas emissions data of their investees

The requirement takes effect from November 2022, according to the Securities and Futures Commission (SFC)