Upcoming Events on Green Finance (Jan – Feb 2022)/ 2022年1-2月綠色金融活動一覽

Check out the above calendar for the fantastic green finance events for January 2022! Interested to join and learn more about green finance? Browse the links below to check out the upcoming events on Green Finance.


[1] Asia Pacific ESG Talent Incubation Roundtable 2022 & CESGA® Programme Insights Sharing

[2] APAC Climate Change Progress & Obstacles in 2022

[3] How ESG Is Impacting Portfolio Construction and Investment Outcomes

[4] Human rights in sovereign debt analysis

[5] ISS ESG: Responsible Investment Forecast for 2022

[6] CFA Institute Alpha Summit APAC

[7] Sustainability Week Asia

[8] IGCC Climate Investment and Finance Summit

Visit www.foe.org.hk for more news about Friends of the Earth (HK)!
Green Finance Facebook page: https://www.facebook.com/greenfinancefoehk/
FoE (HK) LinkedIn page: https://www.linkedin.com/company/friends-of-the-earth-hk/

瀏覽香港地球之友網頁 www.foe.org.hk 了解更多
綠色金融 Facebook 專頁: https://www.facebook.com/greenfinancefoehk/
香港地球之友 LinkedIn 專頁: https://www.linkedin.com/company/friends-of-the-earth-hk/

Outlook 2022: What is next for ESG?

Friends of the Earth (HK) Green Finance Team

As the unprecedented year of 2021 draws to a close, the impact of COVID-19 continues to wreak havoc across the globe, during which climate change and social inequality are viewed by many as some of the biggest worries according to the latest survey conducted by Ipsos across 28 countries.1

Global warming has been identified as a key contributor to extreme weather events, which have caused an estimated USD170 billion of economic damages this year.2

In the wake of all the devastating weather events this year, many countries are determined to reduce their carbon footprint, and pledges are made to achieve net zero target by mid-century. Whilst climate change continues to be one of the focal points, social and governance matters have also been the subject of discussions by business and investor communities.

Looking ahead in 2022, it is likely COVID-19 will continue to be the top priority for the global communities, where coordinated efforts will be made in attempts to irradiate the diseases, but increased focus will also be placed to address some of the other concerns including social inequality and carbon neutrality.

Governments will likely establish rules and regulations in order to track carbon emissions and to develop green economies. ESG education and engagement will be considered as the critical components to drive the development of green finance with the intention to address the relevant concerns.

In order to keep up with the latest compliance requirements globally, demands for ESG talent has risen substantially and a noticeable shortage of ESG trained professionals can be observed on the market place.3  In order to bridge the gap, The European Federation of Financial Analysts Societies (EFFAS) has partnered with Friends of the Earth (HK) to promote the industry recognized ESG professional credential, the Certified Environmental, Social and Governance Analyst (CESGA®) programme aimed at addressing such shortcoming. The number of CESGA® graduates from Hong Kong currently ranked amongst top 5 in 53 regions worldwide and ranked first in the Asia Pacific region.

Friends of the Earth (HK) will continue to promote ESG professional education in 2022 with the objective to incubate more professional talents and help mobilize the industry to take action in creating a greener and sustainable future.

To learn more, please register and join our Asia Pacific ESG Talent Incubation Roundtable 2022!

1 https://www.weforum.org/agenda/2021/11/what-worries-the-world-ipsos-survey/
2 https://www.christianaid.org.uk/sites/default/files/2021-12/Counting%20the%20cost%202021%20-%20A%20year%20of%20climate%20breakdown.pdf
3 https://home.kpmg/cn/en/home/insights/2020/08/nurturing-esg-talent-in-hong-kong.html

上市公司提升 ESG 表現的 25 個方法

【意見交流園地】馮健鏗 Ryan Fung

ESG 遊戲一直由買方(Buyside)主導,上市公司要吸引到這批來勢洶洶的 ESG 資金,除了搞路演登門造訪,不免要靠第三方加持,當中不少上市公司也會找評級機構去認證,務求在 ESG 浪潮分一杯羹。

雖然評級機構絕非萬能,但卻是方便投資者去理解一間公司 ESG 表現的懶人包。評級公司採取諸如碳排放、勞動力性別比率或董事會構成等措施,把一系列參數總匯成一個單一評級。不過,換個角度思考,背後參數如此多,就算公司在某些議題表現特別差,似乎也未能把情況如實反映出來。

在 160 多家評級或數據提供商中,MSCI 的市佔率和影響力遙遙領先於所有競爭對手,在全球散戶投資者買入可持續基金或 ESG 基金的資金當中,有 60% 資金流入會參考 MSCI 評級的基金;而瑞銀更指出,MSCI 食水之深冠絕同行,金融機構幾乎花費每 1 美元在 ESG 數據,MSCI 就能賺取 40 仙。

MSCI 因而遭受評擊,有報道就提到 ESG 評級不是衡量大公司對世界構成的風險,例如溫室氣體排放、污水排放或工人待遇不佳;相反,評級衡量世界對該公司所構成的風險,甚至有一些公司表現備受爭議,仍能提升評級,如摩根大通、DR Horton Inc. 等。

前者自 2015 年底宣佈「巴黎協定」以來,為化石燃料公司承銷的債券數量和從中賺取的費用,超過世界上任何其他銀行,卻獲 MSCI 於 2020 年 12 月將其升級為 BBB;後者則為美國房屋建造大戶,卻在 MSCI 獲得 BBB 評級,更獲納入 iShares ESG Aware MSCI USA ETF,一度吸引不少 ESG 資金。

至於講到如何提升 ESG 評級,「彭博」也有詳盡分析,並列舉出 25 個方法予上市公司參考:

  1. 進行年度員工滿意度調查
  2. 採用商業道德政策
  3. 採取反腐敗政策
  4. 制定防止洗黑錢政策
  5. 制定舉報人保護計劃
  6. 允許員工報告不滿
  7. 提供多元化培訓或計劃
  8. 保護客戶數據
  9. 排除在產品中使用有毒化學品
  10. 創建研究生或學徒計劃
  11. 為員工提供股權
  12. 添加「獨立」董事會成員
  13. 提供綠色債券(適用於銀行)
  14. 提高產品質量
  15. 採用回收政策
  16. 出售電動汽車(適用於汽車製造商)
  17. 在董事會層面創建 ESG 委員會
  18. 減少員工流失
  19. 與當地社區保持溝通(如果擁有天然氣管道)
  20. 制定「負責任的」廣告標準
  21. 為全職和合同員工提供培訓
  22. 設定排放目標;無需包括範圍 3 排放
  23. 任命首席多元化官
  24. 聘請首席信息安全官
  25. 贏得獎項

由此可見,要做好 ESG,或許應該套用網絡流行的一句話:「其實唔難。」但隨著市場對 ESG 的認知愈來愈深,掌握著話語權的 ESG 評級機構參考價值變得具爭議性,如之前也提過 ESG 評級亂象成監管機構眼中釘,令國際證監會(IOSCO)出手進行整頓。但不論如何,像 MSCI、穆迪(Moody’s)、S&P Global Inc. 和晨星(Morningstar)等金融機構,或許諷刺地才是 ESG 浪潮的最大得益者。

瀏覽香港地球之友網頁 www.foe.org.hk 了解更多
綠色金融 Facebook 專頁: https://www.facebook.com/greenfinancefoehk/
香港地球之友 LinkedIn 專頁: https://www.linkedin.com/company/friends-of-the-earth-hk/

Turning the Spotlight on Nature and Biodiversity in 2022

Green Finance Advisor of Friends of the Earth (HK)

While climate change stays in the focus of the society and investors, we are glad to see more discussion around the topic of nature and biodiversity. In fact climate and nature are impacting each other. Climate change has driven the increase in wildfire, drought and other hazards happening in nature. On the other hand, the weaker ecosystems of our sky, land and ocean have impacted the ability of the nature to regulating climate. Having a stronger nature can certainly help us mitigate climate change. We need big and quick actions from both the corporations and the governments to help recover our ecosystems.

Noticeably, climate action failure, biodiversity loss and natural resource crises are among the long-term existential threats for the world according to The Top Global Risks Reports 2021[1] from the World Economic Forum. (And we believe that these three risks are very likely to stay as the world’s major threats in The Global Risks Report 2022, which is scheduled to be published in this month.) According to the report from The World Bank, the collapse of the ecosystem would cost US$2.7 trillion annually (or 2.3% of global GDP) and some countries would be hard hit. In 2021, a group of 34 executives from global financial institutions, corporates and market service providers were appointed to the Taskforce on Nature-related Financial Disclosure (TNFD). The Taskforce members will help develop a framework for corporations to assess their nature-related risks and opportunities.

TNFD will adopt the same structural approach of TCFD’s four pillars (governance, strategy, risk management and metrics & targets) to guide companies operate and report nature-related issues. That being said, companies face more challenges when assessing their financial impact related to nature than those related to climate. This is underpinned by the complexity and the scope of nature-related issues. We have developed a widely accepted set of metrics for measuring climate risks (such as greenhouse gas emissions from Scope 1 to 3 and carbon prices). But there is no single set of one-size-fit-all metrics for assessing nature-related topics. Each nature-related topic (e.g. land degradation, biodiversity and water pollution) will need to be assessed by its own set of metrics.

It is important for corporations and nations to understand and access their nature risks and the associated financial impacts. While TNFD will take some time to be launched for wider adoption (by 2023), corporations and nations do not need to wait. There are plenty of tools available to help them assess nature related impact. The web-based ENCORE, developed by Natural Capital Finance Alliance in partnership with UNEP-WCMC, is a useful tool to facilitate financial institutions assess dependencies and impacts on natural resources for major industries. The Global Forest Watch is another online platform that provides tools and near real-time data for monitoring forests. We see no lack of tools for measuring nature-related impact but there a lack of effort among companies and governments to drive substantial positive impact on our nature.

Same as climate change, nature depletion and biodiversity loss are systemic risks that affect everyone of us. In 2022, the second part of the United Nations Biodiversity Conference (COP15) is expected to be held and to conclude the Post-2020 Global Biodiversity Framework. The Framework aims to work on 21 targets and 10 milestones for 2030.[2] The goal is to put the earth on the path to recover its nature and biodiversity. We urge businesses and governments to take bold moves to manage and reduce their nature risks and to drive positive changes to our ecosystems.

[1] The Global Risks Report 2021, the World Economic Forum, January 2021

[2] First detailed draft of the Post-2020 Global Biodiversity Framework, Convention of Biological Diversity, June 2021

How Green are the Electric Vehicles?

Michele Leung, Green Finance Advisor of Friends of the Earth (HK) 

According to the statistics, automobile manufacturers contributed approximately 13%* of total global carbon emissions. Vehicle tailpipe emissions represented nearly 80% of this carbon footprint, which presents the industry’s biggest challenge in decarbonization.

Due to its large carbon footprint, more regulators who focus on climate change are shifting their attention to auto industry. In the recent COP 26, declarations were made by government to work towards all sales of new cars and vans being zero emission by 2040 or earlier. Similarly, in China, the ’14th Five-Year’ New Energy Automobile Industry Development Plan is a critical period for the transformation and upgrading of China’s auto industry. It is targeted to reach 20% share of passenger new electric vehicles sales by 2025. The ambition is to reach 100% of passenger vehicles electrified in 2035.   

The growth of electric vehicles market is exponential. According to International Energy Agency (IEA), based on current trends and policies, it projects the number of electric cars, vans, heavy trucks and buses on the road worldwide to reach 145 million by 2030, which represents nearly 14 times the number observed in 2020. China, in particular, is leading the market with its new electric vehicle penetration rate rose to 13% in 2021.

However, one should note that while electric vehicles do not generate tailpipe emissions, the batteries used to power them are charged via electricity grids which may not be emission free. National grid emissions depend on a range of energy source mix, including coal and renewables. The fact is, this reallocation of emission from tailpipe to grid is still considered and categorized as Scope 3 Category 11 under the Greenhouse Gas Protocol, migrating from indirect use-phase to direct use-phrase emission. According to an industry research paper^, it is found that if all vehicles were replaced with electric equivalents, that industry average Scope 3 Category 11 emissions would have been reduced by 31%, though it is a significant reduction, it is still far from the ideal “zero-emission”.

Nevertheless, accelerating the proliferation and adoption of zero emission vehicles is an important step for automobile manufacturers to decarbonize their carbon footprint and the world to achieve Net Zero.  In parallel, investors are getting more interested in corporates’ electric vehicles strategies. When evaluating the auto industry, in addition to carbon footprint, investors should also be aware of the ESG risks stemming from social aspects. Investors should pay attention to the product recalls and impacts of Over The Air (OTA) updates under product safety.  Investors should also consider how the companies manage their supply chain impacts (especially along the Original Equipment Manufacturer (OEM) model and upstream), as well as the restructuring and talent requirement practices under labour management.

*In 2019 alone, automobile manufacturers constituents of the MSCI ACWI Index as of May 2021 were responsible for nearly 4.7 gtCO2e, approximately 13%2 of total global CO2 emissions.

^ MSCI ESG Research “Electric Vehicles and the Elusive Road to “Zero Emissions”’ by Yu Ishihara, June 2021

Visit www.foe.org.hk for more news about Friends of the Earth (HK)!
Green Finance Facebook page: https://www.facebook.com/greenfinancefoehk/
FoE (HK) LinkedIn page: https://www.linkedin.com/company/friends-of-the-earth-hk/