KPMG Welcomes The Financial Services Development Council’s Recommended Strategy On Environmental, Social And Governance For Hong Kong
28 November 2018, Hong Kong – KPMG welcomes the report released today by the Financial Services Development Council, which recommends a strategy for environmental, social and governance (ESG) to strengthen Hong Kong’s position as an international financial centre.
Bonn Liu, ASPAC Head of Asset Management and Hong Kong Head of Financial Services, says: “ESG or sustainable investment has experienced exponential growth globally in the last few years as institutional investors are placing a greater focus on sustainable investment. It is crucial for Hong Kong to review its current initiatives to foster an environment that facilitates ESG investment to align with international trends.”
Various studies and research reports show that integrating ESG factors into decision making allows companies to identify, mitigate and manage risks, which in turn enhances the medium to a long-term risk-adjusted return of a company. Meanwhile, a strong ESG profile reflects the strength of corporate governance which could help attract investors, both for investment managers and investee companies in Hong Kong. A robust ESG strategy also allows Hong Kong’s financial market to remain competitive.
“Multiple measures can be introduced to encourage the development of an ESG ecosystem in Hong Kong. Public funds – including the Exchange Fund managed by the Hong Kong Monetary Authority – play a particularly important role considering the multi-trillion dollars worth of assets under management,” says Liu. “There would be a significant knock-on effect if the government can take a leading role by encouraging public funds to support ESG integration in investment decisions.”