Information Centre

At the UN Climate Change Conference last month, there were extensive discussions on actions to be taken to address climate change. In view of the increasingly threatening impact of extreme weather on daily life and wealth management, global investors have become more aware of “Environmental, Social and Governance (ESG)” factors, and many financial institutions have integrated ESG factors into their investment decisions to avoid related risks.   

While sustainable investing is becoming the “new normal” in the financial industry, the MPFA recognises the need to drive the development of sustainable investing practices for MPF investment to mitigate ESG risks and protect scheme members’ interests.

As early as November 2018, the MPFA issued a circular to encourage MPF trustees to consider integrating ESG factors into their decision-making process and disclosing their approach to MPF scheme members. During the policy-formulating process, the MPFA made reference to relevant international standards, such as the guidelines issued by the International Organisation of Pension Supervisors (IOPS), and co-operated with other financial regulators in Hong Kong to ensure the concerned policies are compatible with local and international development.

Recently, the MPFA issued the “Principles for Adopting Sustainable Investing in the Investment and Risk Management Processes of MPF Funds”, which covers four elements: governance, strategy, risk management and disclosure. The Principles laid down a high-level framework to help MPF trustees integrate ESG factors into the investment and risk management processes of MPF funds from a financial risk management perspective and to make relevant disclosures to MPF scheme members.

Looking forward, as part of its commitment to protect employees’ MPF benefits, the MPFA will continue to join hands with MPF trustees to make timely reforms to improve the MPF System and strengthen the basic retirement protection of Hong Kong’s working population.