Hong Kong's Financial Services Development Council (FSDC) on Wednesday set out key recommendations for fostering the development of an Environmental, Social and Governance (ESG) ecosystem in China's Hong Kong Special Administrative Region.
"ESG investment has become a mainstream investment area which many developed economies strive to seize through a combination of incentives and regulations," FSDC chairman Laurence Li said when releasing the ESG Strategy for Hong Kong report.
"An optimal balance between the two is not easy to achieve but there is a need for Hong Kong to take this into serious consideration in order not to be left behind."
The report recommends the government take the leadership role in encouraging public funds' support for ESG integration.
It suggests the Securities and Futures Commission strengthen the emphasis on ESG through upgrading the Principles of Responsible Ownership to at least "comply or explain."
It also advises the Stock Exchange of Hong Kong to strengthen the emphasis on ESG for both listing applicants and listed companies.
The FSDC was established in 2013 in response to the financial services industry's call for a high-level government advisory body to support the sustained development of the industry.
