Green Finance Certification Scheme - ESG Fund

Further Promoting ESG Initiative

According to the Global Sustainable Investment Alliance (GSIA), the global scale of ESG investment has reached USD 30 trillion in 2018 and is expected to grow continuously. The global rising demand for ESG investment also focuses more investors’ attention on ESG initiative in the local fund market. In response to SFC’s Strategic Framework for Green Finance and the rising demand from investors to promote clarity among ESG funds, HKQAA has developed another new extension, Green Finance Certification Scheme – ESG Fund, subsequent to its certification service for green fund launched in September 2019.

ESG fund generally refers to a fund that aims to bring positive impact to ESG aspects by integrating ESG factors into its investment process, through which many investors reckon that such ESG investment could outperform in mitigating or managing key risks, identifying investment opportunities and generating competitive risk-adjusted returns.

Develop the Scheme with Reference to International Standards

The certification framework for ESG Fund was built on that of the Green Finance Certification Scheme. It was developed with reference to a number of international principles and guidances, including the United Nations Principles for Responsible Investment (UNPRI). The certification requirement for ESG Fund resembles that for Green Fund. To accommodate the broader coverage of ESG, certain adjustments have been made on the terminology and fund’s objective requirements under the Scheme, such as addressing the objective in ESG aspects and expanding the related taxonomy.

With the launch of ESG Fund certification, HKQAA hopes to promote more capital flows towards green and sustainable uses for better consistency, transparency and sufficiency of disclosure for investors.

Terms and Conditions of the Green and Sustainable Finance Certification Scheme.