Consultation on the Management and Disclosure of Climate-Related Risks by Fund Managers

The Council has also reviewed the “Consultation on the Management and Disclosure of Climate-related Risks by Fund Managers” issued by the Securities and Futures Commission (“SFC”) on 29 October 2020 (“Consultation Paper”). In this Consultation Paper, the SFC proposes to amend the Fund Manager Code of Conduct to require fund managers to take climate-related risks into consideration in their investment and risk management processes as well as to make appropriate disclosures to meet investors’ growing demand for climate risk information and to combat greenwashing. The proposed requirements cover four key elements: governance, investment management, risk management and disclosure.

The Law Society supports the SFC’s proposal to focus initially on climate change, and encourages the SFC to prioritise the development of a broader environmental, social and governance (“ESC”) regulatory framework to address other aspects of environmental risk. This would enable Hong Kong to keep pace with global regulatory developments in this area. The Law Society made a submission in response to the Consultation Paper on the above and provided further comments. Members may refer to the link below on the Law Society’s website for the submission.

http://www.hklawsoc.org.hk/pub_e/news/submissions/20201222.pdf