As the investment manager of the Exchange Fund, we believe that the concept of responsible investment (RI) is highly relevant to our investment work.
The HKMA sees RI as an investment approach that takes into account the impact of various environmental, social and governance (ESG) factors on the long-term investment returns and their sustainability.
We believe that, by putting an appropriate emphasis on RI and sustainable long-term performance, we can better achieve the investment objectives of the Exchange Fund, and reduce risks associated with ESG-related matters of our underlying investments.
1 Focusing Capital on the Long Term (FCLTGlobal)
2 Principles for Responsible Investment (PRI)
3 Central Banks and Supervisors Network for Greening the Financial System (NGFS)
4 Task Force on Climate-related Financial Disclosures (TCFD)
The Exchange Fund Advisory Committee endorses the guiding principle and overall framework for RI of the Exchange Fund.
Our guiding principle is that priority will generally be given to ESG investments if the long-term risk-adjusted return is comparable to other investments.
We adopt as appropriate the following three-pronged approach in our investment processes that underpins our beliefs as a responsible long-term investor:
We incorporate ESG factors into our investment analysis to identify risks and opportunities, as we believe that these factors can materially affect the long-term value of our investments. We select and appoint external managers that share our RI beliefs. We also communicate our RI beliefs to all our external managers and expect them to align in such a way that the overall sustainable long-term economic performance is attainable.
Public market investments:
Private market investments:
We exercise shareholder rights in our public equity holdings in a manner that helps safeguard the long-term value of our investments. We believe that responsible corporate behaviour guided by ESG factors will help create shareholder value in the long term. We expect our asset managers to help us discharge our ownership responsibilities in the underlying investments by adopting active ownership through exercising voting rights and engaging with the corporates concerned.
We seek to join hands with like-minded investors, regulators and international organisations to promote good practices for managing investments for the long term.
The NGFS Glasgow Declaration
Net-Zero Emissions Target
Speech(es)