Environmental, social and governance principles gain traction in Asia-Pacific
ESG metrics prioritised in the region vary from those in the US and Europe. In the Asia-Pacific, the key metrics are ESG policy, people diversity and health and safety events.
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GLOBAL support for sustainable investing is growing rapidly and the number of regulations encouraging environmental, social and governance (ESG) principles are multiplying. While Europe now has the strictest ESG regulations in place, Asia is home to a growing movement to formalise ESG policies and practices.
However, instead of having legal requirements like in Europe, the HK Securities and Futures Commission (SFC) recently introduced voluntary guidelines. Last September, the SFC announced its strategic framework to contribute to the development of green finance in Hong Kong; in April, it issued a circular to provide guidance to management companies of SFC-authorised unit trusts and mutual funds on enhanced disclosures for SFC-authorised green or ESG funds.
It is notable that general partners (GPs) in the region are signing with Principles for Responsible Investing (PRI) more quickly than limited partners (LPs), in a reflection of the growing appetite for the incorporation of ESG elements in Asia-Pacific markets.
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