Final Call for IOSCO Consultation Submission – Deadline is Today!!

Green Finance Advisor of Friends of the Earth (HK)

The International Organization of Securities Commissions (IOSCO) is hosting a consultation on regulations of Environmental, Social & Governance (“ESG”) rating and data providers. It is proposing a set of recommendations to mitigate risks around ESG ratings and data products providers, including encouraging financial market practitioners to take international ESG ratings into account in their investment decisions.

As a pioneer in promoting green finance development in the Asia-Pacific region, Friends of the Earth (HK) organized a two-session webinar last week in English and Chinese, attended by representatives from listed companies, financial institutions and rating agencies, providing an overview of the report and putting forward suggestions to further advance and improve the quality and transparency of ESG ratings and data in order to meet the tightening regulatory requirements.

The key speaker of the webinar, Mr. Anthony Cheung, Board Governor and Green Finance Convenor of Friends of the Earth (HK), said, “This report is one of the most important consultation on ESG issues in recent years, with the objective to establish global sustainability disclosure standards that will be crucial for national jurisdictions to build upon as part of their mandatory reporting requirements. Enhancing the reliability, comparability and interpretability of ESG ratings and data products will help improve the quality and transparency of ESG disclosures.”

The Hong Kong Exchanges and Clearing Limited (HKEX) proposed the “ESG Reporting Guide”, requesting listed companies in Hong Kong to disclose ESG-related data on an annual basis, and subsequently tightened the disclosure requirements last year. These actions demonstrated the growing importance of ESG factors in the capital market. Even though listed companies have gradually started to disclose environmental data under regulatory requirements, the compliance level and quality for most of them are still far from satisfactory. We believe that with the increased adoption of international ESG ratings, the completeness and comparability of ESG data will be improved, and companies with better performance will have an advantage in their borrowing capacity.

Current ESG Data Could Lead to Potential Investment Risks

Over the past few years, as investors become increasingly focused on the potential financial risks posed by climate change and ESG considerations, ESG rating and data have become more significant in investment decision-making. The market for ESG ratings and data has grown exponentially and encouraged the development of new ESG ratings and data products.

Mr. Anthony Cheung said, “As these ratings and products are not within the consideration of many regulators currently, they may create potential risks to investor protection, market transparency and efficiency, risk pricing, as well as capital allocation. The IOSCO report revealed that there is a lack of clarity about the methodologies behind the ratings or data products and an uneven coverage of products across industries and countries. The lack of data and standards presents a risk on ’greenwashing’ or misallocation of assets and could lead to a lack of trust in ESG ratings or in the robustness of relevant data products.”

Enhancing the Reliability of ESG Data and ESG Rating is Imperative

In view of this, IOSCO proposed a series of recommendations in its report; highlights as follows:

Recommendation for IOSCO members

• Regulating ESG ratings and data products providers to build confidence, improve take-up, and protect investors

• Considering the level of overlap in processes for determining ESG ratings and data products with the processes for determining credit ratings and mitigate potential conflicts of interest

Recommendations for ESG ratings and data products providers

• Issuing high quality products using publicly disclosed data sources with transparent and defined methodologies

• Ensuring decisions are made independently and free of conflicts of interest

• Making high levels of public disclosure and transparency an objective

• Maintaining all private information pertaining to ESG ratings and data products in confidence

Recommendation for ESG Ratings and Data Products Users

• Conducting due diligence on ESG ratings and data products to gain an understanding of the assessment methodologies and their limitations

Friends of the Earth (HK) encourages practitioners in the Asia-pacific region to submit their opinion by today to help regulators set policy directions for moving forward with a sustainable society and economy.


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今日諮詢截止─國際證監會監管ESG評級機構諮詢報告

香港地球之友綠色金融顧問

國際證監會組織(IOSCO)近日就環境、社會和治理 (簡稱「ESG」) 數據及評級機構的監管發表報告並進行諮詢,針對各國監管機構、數據及評級機構、企業及投資者等數據使用者,提出一系列建議,包括鼓勵金融從業員應參考國際性的ESG評級,衡量企業是否具備可持續發展的條件再作投資決定。作為亞太地區推動綠色金融發展的先行者,香港地球之友於上星期舉辦一連兩場,分別中文及英文網上研討會,向不同上市公司、金融及評級機構代表,深入剖析諮詢報告內容,並提出香港企業可如何提升ESG評級及數據的完整性和透明度,以滿足日益完備的監管要求。

擔任研討會主講的香港地球之友董事及綠色金融事務召集人張振宇,在研討會上表示:「此報告是近年業界最重要的ESG諮詢文件,目的是建立全球可持續投資的披露標準,是各國政府及監管機構加入其強制性企業披露要求的重要借鑒,相信提升ESG評級或數據產品的可靠性、可比性及可解釋性,將有助提高ESG披露品質及透明度。」

香港交易所提出《環境、社會及管治報告指引》,要求在港的上市公司必須每年披露ESG相關數據,其後於去年提升披露要求,可見資本市場對ESG的重視程度不斷提高。雖然上市公司在監管要求下,已逐漸培養披露ESG數據的習慣,但大部分的合規水平及質素仍然未如理想,相信隨著國際性的ESG評級普及化,將有助提升ESG數據的完整性和可比性,而ESG評級表現較好的企業,在股票及債券融資方面亦明顯會更具優勢。

現行ESG數據易構成投資潛在風險

過去幾年,隨著投資者越來越關注氣候變化和ESG因素帶來的潛在金融風險,ESG評級及數據在投資決策中變得越來越重要。市場對ESG評級及數據使用需求大增,亦鼓勵了不少新的ESG評級和數據產品開發。

張振宇認為,現時大部份ESG評級並不在監管機構的監管範圍之內,因而對投資者的保障、市場透明度和效率、風險定價和資本配置等方面構成潛在風險。IOSCO報告指出,現時的ESG評級或相關數據產品,背後的計算方法缺乏透明度,跨行業和政府提供的產品覆蓋面也往往參差不齊。因此,缺乏數據及產品標準可能會帶來「漂綠」或資產配置不當的風險,並可能令市場對相關產品的穩健性缺乏信心。

提升ESG數據及ESG評級可靠性勢在必行

有見及此,國際證監會組織在報告中提出一系列建議,概要如下:

針對各國的監管機構

• 通過對ESG評級和數據公司進行監管,將有助提高市場對使用相關產品的信心,同時有助加強對投資者的保護

• 考慮在ESG評級與信用評級的評估過程中,兩者之間如何相互影響,以及是否存在潛在的利益衝突

針對評級機構及數據公司

• 盡量使用透明和清晰的方法及利用公開披露的信息去發行高品質的ESG數據產品

• 盡量確保評估的獨立性,不應受政治或經濟壓力,或受公司的業務或財務活動等影響,而產生利益衝突

• 考慮在衡量評級的方法和過程中,提供一定程度的透明度

• 在處理任何有關ESG評級和數據的非公開信息時, 恪守保密協議

針對評級機構及數據使用者

• 在使用ESG評級和數據產品時,可考慮進行盡職調查,包括了解正被評級的產品或其評估的內容、評級或評估準則,以及產品的局限性和目的等等

香港地球之友鼓勵亞太地區的業界人士於今天最後提交限期前提交意見,協助監管機構制定政策方向,為可持續社會及經濟向前邁進。


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