【ESG News】Global Trends Biweekly Newsletter Issue 28 (2025.2.24-2025.3.9)

Hong Kong China ESG trends

MPF Symposium on sustainable development in MPF

24 February, the MPFA held the MPF Symposium to discuss with the MPF industry the development of and strategies for sustainable investment, and issued a circular letter providing guidance to MPF trustees on how to enhance the transparency of "Environmental, Social, and Governance" (ESG) funds in MPF schemes, with a view to enhancing scheme members' understanding of ESG funds for making investment decisions.

In the circular letter issued by the MPFA today, MPF trustees are required to improve disclosure by setting out in the MPF scheme brochures the ESG foci, investment strategies, and mechanisms to monitor and measure attainment of the ESG foci of ESG funds. Additionally, trustees should regularly assess the extent to which the funds’ established ESG foci is attained and disclose this in the annual governance reports of their MPF schemes. This approach enables scheme members to evaluate whether the funds’ ESG performance aligns with their expectations, thereby enhancing overall transparency.

Source: https://www.mpfa.org.hk/en/info-centre/press-releases/20250224

Lianhe Green Insight:

Following the 2021 issuance of new guidance on ESG fund disclosures by the Securities and Futures Commission (SFC), which required enhanced transparency for listed and unlisted ESG fund products, the MPFA has now taken a further step. It has issued a circular to MPF trustees, requiring them to improve the disclosure of ESG funds under MPF schemes. This allows employees to gain clearer insights into how their MPF investments utilize ESG data to select stocks and the ESG benefits of their investments.

For example, among the five MPF ESG Constituent Funds currently available, two track the HSI ESG Enhanced Index. As of December 31, 2024, these funds have achieved a 22% reduction in ESG risk rating compared to the Hang Seng Index. This initiative aims to enhance contributors' confidence in ESG funds and further promote sustainable investment.

International ESG trends

EU proposes greater flexibility for automakers in CO2 compliance

The European Commission proposed allowing European automakers to meet their carbon dioxide (CO2) emissions targets over a three-year period instead of annually, offering greater flexibility in compliance.

Commission President Ursula von der Leyen announced at a press conference that she would introduce an amendment to the CO2 standards regulation in March, aimed at giving car manufacturers more leeway in meeting their targets.

Source: https://www.chinadailyhk.com/hk/article/606019

Lianhe Green Insight:

The European Commission has proposed extending the deadline for car manufacturers to meet carbon dioxide (CO2) emission standards from one year to three years. This move reflects the EU's effort to balance environmental goals with industrial development. In the short term, it provides greater flexibility for car manufacturers, alleviating pressure on their technological transformation and supply chain adjustments, especially against the backdrop of global supply chain tensions and energy transition. However, in the long run, the EU must ensure that this flexibility does not undermine its emission reduction commitments or delay the transition to green transportation.

UN Nature Meetings Finalize $200B Plan to Protect Biodiversity by 2030

Governments reached a crucial agreement on February 27, 2025, in Rome to mobilize the resources needed to implement the Kunming-Montreal Global Biodiversity Framework (KMGBF).

The agreement sets a target of mobilizing at least $200 billion annually by 2030, with $20 billion per year in international funding by 2025, increasing to $30 billion by 2030. The deal establishes permanent financial mechanisms in line with Articles 21 and 39 of the Convention on Biological Diversity and seeks to improve existing financial instruments.

Parties also finalized a monitoring framework to track global and national progress toward the KMGBF’s 23 targets and four goals. The new framework ensures that data can be interpreted by policymakers and aggregated globally to measure implementation.

Source: https://esgnews.com/un-nature-meetings-finalize-200b-plan-to-protect-biodiversity-by-2030/

Mainland China ESG trends

National Energy Administration Releases Compilation of Advanced Technologies and Typical Cases for Energy Saving and Carbon Reduction in the Oil Refining Industry

In order to implement the ‘Opinions of the Central Committee of the Communist Party of China and the State Council on the Complete and Accurate Implementation of the New Development Idea and Doing a Good Job in Carbon Peak and Carbon Neutral Work’, ‘Notice of the State Council on the Issuance of the “Action Programme for Energy Conservation and Carbon Reduction for the Years of 2024-2025” and “Guidance of the National Development and Reform Commission and Other Departments on the Promotion of Green, Innovative and High-quality Development of the Oil-Refining Industry” and other documents, we summarize In recent years, advanced technologies and effective experience and practices of energy saving and carbon reduction in the oil refining industry have been summarised, to guide and encourage the industry enterprises to save energy and reduce carbon and promote high-quality development. The Bureau organised the competent departments of the oil refining industry in each province (autonomous regions and municipalities directly under the central government), relevant central enterprises and other units to carry out the collection of advanced technologies and typical cases of energy saving and carbon reduction in the oil refining industry.

After expert evaluation and public announcement, the Compendium of Advanced Technologies for Energy Saving and Carbon Reduction in Oil Refining Industry and the Compendium of Typical Cases of Energy Saving and Carbon Reduction in Oil Refining Industry were formed.

Source: https://www.nea.gov.cn/20250305/9fb4f96d15374b0385b1701747f1bdef/c.html

China's state council issues guidelines on advancing key areas in financial sector

The General Office of the State Council has issued guidelines to accelerate efforts to build China into a country with a strong financial sector and promote development in five major areas, namely, technology finance, green finance, inclusive finance, pension finance and digital finance.

The guidelines underscored strengthening financial support for major national scientific and technological initiatives and tech-focused small and medium-sized enterprises while coordinating financial support for green development and the low-carbon transition.

Source: China's state council issues guidelines on advancing key areas in financial sector

Sustainable Finance Certification Public and Completed by Lianhe Green