FIS Horizons 2023 Brochure - Riding the wave - Flipbook - Page 8
Dangers of
a green sheen
The legal and regulatory risks of
ESG “greenwashing” in Hong Kong
Chris Dobby
Partner, Hong Kong
Mark Lin
Partner, Hong Kong
Antonia Croke
Partner, Hong Kong, London
Byron Phillips
Partner, Hong Kong
Stephanie Tsu
Senior Associate, Hong Kong
The word on everyone’s lips when it comes to risk in the context of
environmental, social and governance (ESG) is “greenwashing” and in
Hong Kong it is no different.
Hong Kong regulators have identified that
investors need consistent, available and
reliable climate-related information to make
their investment decisions, and therefore
they are implementing globally consistent
sustainability reporting standards for listed
companies and across the financial industry.
But the financial and securities regulators
have existing tools in their arsenals which
can be used by the regulators, investors,
consumers and environmental activists
to find redress for greenwashing claims.
Though there may currently be a lack of
specific climate-related law, policies and codes
to protect investors, greenwashing is, at its
heart, misrepresentation, and Hong Kong has
a number of existing provisions to protect
investors and consumers, including as part of
Securities and Futures Ordinance (SFO) and
advertising protections. Several provisions of
the SFO impose a statutory duty on those
responsible for issuing public communications
to take reasonable care in respect of the
accuracy of information involved.
For financial institutions and listed companies
in Hong Kong, the risk of greenwashing
is greatest. There is investor and regulator
focus on companies’ ESG information being
supplied and in the future, organizations may
expect investigations under the SFO
for misrepresentation.
For financial institutions and listed companies
in Hong Kong, the risk of greenwashing
is greatest. There is investor and regulator
focus on companies’ ESG information being
supplied and in the future, organizations may
expect investigations under the SFO
for misrepresentation.
There have been no ESG enforcements as
at the date of publication of this article, but
given that Hong Kong is positioning itself
to be the leading ESG finance hub in Asia,
greenwashing is unlikely to be tolerated
by the financial and securities regulators
in Hong Kong.
Read the full article for more details on
Engage here.
Article correct as of 29 November 2022.
