Hong Kong’s market regulator backs development of voluntary code of conduct for ESG services providers
- The voluntary code of conduct will be developed by a 14-member working group comprising members from the ESG industry and users from the city’s finance industry
- The working group is expected to hold its first meeting in November, and will aim to issue a draft of the guidelines for public consultation in the first quarter of 2024
Hong Kong’s securities regulator is backing the development of a code of conduct for environmental, social and governance (ESG) ratings and data products providers, which is likely to lift the city’s credentials as a green finance hub.
The non-mandatory guidelines will be developed by a 14-member working group comprising representatives from Hong Kong, mainland China and international ESG services providers, as well as key users from the city’s finance industry, according to a statement from the Securities and Futures Commission (SFC) on Tuesday.
“The voluntary code of conduct will help strengthen the transparency, quality and reliability of ESG information used by licensed corporations in their investment decisions,” said SFC CEO Julia Leung Fung-yee. “This is an important initiative to mitigate the risk of greenwashing in investment products.”
The Hong Kong government has been promoting the city to develop into a hub for green and sustainable finance serving mainland Chinese and international companies. Green and sustainable debt issued in Hong Kong, including both bonds and loans, increased by more than 40 per cent year on year in 2022 to US$80.5 billion. The city accounted for a third of such debt issued across Asia in that period.
The proposed standards will align with best practices as recommended by the International Organization of Securities Commissions (IOSCO) and relevant expectations introduced in other major jurisdictions, the statement said.