The Securities and Futures Commission (SFC) today issued amendments to the Fund Manager Code of Conduct and a circular setting out expected standards for fund managers managing collective investment schemes to take climate-related risks into consideration in their investment and risk management processes and make appropriate disclosures.
This accompanies the release today of consultation conclusions on proposed climate-related risk management and disclosure requirements for fund managers (Note 1). In reaching its conclusions, the SFC received wide support from the industry for financial regulators to play a role in setting baseline requirements for managing climate-related risks and combating greenwashing.
The SFC made reference to the Task Force on Climate-related Financial Disclosures Recommendations (Note 2) in developing the requirements and also considered the global regulatory trend towards harmonisation and comparability of standards across jurisdictions.
“Asset managers play a key role in providing investors with quality and comparable information about climate-related risks,” said Ms Julia Leung, the SFC’s Deputy Chief Executive Officer and Executive Director of Intermediaries. “The requirements will help channel investment capital to companies with sustainable goals and facilitate the transition to a low carbon economy.”
The new requirements will be implemented in phases with the first phase to begin on 20 August 2022 (Note 3).
Notes:
- On 29 October 2020, the SFC launched a Consultation on the Management and Disclosure of Climate-related Risks by Fund Managers. A total of 52 written submissions were received from industry associations, asset management firms, professional bodies and individuals.
- Established by the Financial Stability Board in December 2015, the Task Force on Climate-related Financial Disclosures is an industry-led working group tasked with establishing comparable and consistent disclosure standards which companies can use to demonstrate climate change resilience to providers of capital.
- Please refer to the SFC circular issued today for details of the implementation timeline.
