Hong Kong’s pension regulator has mandated that fund managers bolster their disclosure standards for ESG funds to assist contributors in understanding the risk management and investment strategies at play.
The Mandatory Provident Fund Schemes Authority (MPFA) announced on Monday that the 12 participating trustees – which include major players such as HSBC and Manulife – must enhance transparency in their ESG-related reporting within pension schemes. According to MPFA Managing Director Cheng Yan-chee, trustees are now required to clearly articulate their ESG strategies in fund brochures, with a particular focus on risk management and the methodologies used to monitor and measure ESG factors. He also stressed that annual governance reports should detail their performance in these areas.
“This approach enables scheme members to evaluate whether the funds’ ESG performance aligns with their expectations,” Cheng commented. “It is also intended to help deepen their understanding of ESG funds and make better investment decisions.”
The new measures will affect 47 ESG-related funds, which currently hold HK$36.6 billion (US$4.71 billion) in assets. Moreover, any newly launched ESG-themed funds will be subject to the same disclosure requirements. While the directive is effective immediately, fund managers have been granted until 30 September to fully align their reporting with the updated guidelines.
Established in 2000, the compulsory MPF scheme serves approximately 4.75 million salaried workers in the city and boasted total assets of HK$1.326 trillion as of 30 September, inclusive of investment gains. MPF members are permitted to access their funds upon reaching the age of 65.
The MPFA underscored the importance of using robust investment and risk assessment tools to account for climate change and other sustainability challenges alongside financial returns. This strategy, it argued, would enable MPF members not only to achieve better-informed investment decisions but also to contribute towards a more sustainable future.
The move aligns with broader initiatives aimed at greening local capital markets, including efforts to reduce pollution and mitigate the impacts of climate change. In a related development, Hong Kong’s largest listed companies – representing nearly two-thirds of the city’s market capitalisation – have been required to disclose their operational greenhouse gas emissions under new rules introduced by the Hong Kong Exchanges and Clearing, with supply chain emissions coming under scrutiny from 2026.
In addition, the MPFA is set to launch the second phase of its eMPF Platform on 5 March. Chairwoman Ayesha Macpherson Lau explained that the initiative is part of a wider drive to reduce costs and paper consumption, ultimately aiming for a fully paperless and 100 per cent digital operation. The new platform will consolidate the various systems currently in use by fund managers since the inception of the MPF in 2000.
