Disclosure Statement of Relevant Climate-related Risks
The information contained herein applies to Type-9 licensed Collective Investment Schemes (CIS) funds managed by First Shanghai Investment Management (HK) Limited (the “Company”) pursuant to the Fund Manager Code of Conduct (FMCC) and the Circular to Licensed Corporations – Management and Disclosure of Climate-related Risks by Fund Managers published by the Securities and Futures Commission (the “SFC”).
The Company, a SFC-licensed corporation with Type 9 (asset management) regulated activity, is required to provide a disclosure statement of relevant climate-related risks.
1. CORPORATE GOVERNANCE
Board
The Board of Directors of the Company (the “Board”) is the highest-level decision-making body, which is held accountable for supervising the climate-related risk management process and relevant company development strategies.
The members from both the Investment Management Committee and Risk Management Committee report to the Board on a regular basis to keep the Board updated of climate-related issues and the Company’s progress in addressing such issues.
The Board strives to provide adequate resources for managing climate-related risks and maintaining climate-related awareness in the Company. The Board keeps abreast of the latest trends of climate-related issues by attending climate-related trainings.
Investment Management Committee
The Investment Management Committee, comprises of all Responsible Officers of the Company, is responsible for monitoring the management and implementation of the climate-related policies in the investment management process.
The Investment Management Committee will meet at least annually to:
i. discuss climate-related issues and progress against the climate goals while informing the Board of the key updates.
ii. review the Company’s approach to ensure effective consideration of climate-related risks and opportunities in the investment processes.
Risk Management Committee
The Risk Management Committee, comprises of chief financial officer of First Shanghai Investments Limited (the Company’s ultimate holding company), compliance officer, senior officer of the accounts department, and responsible officers of the Company. The Risk Management Committee is mainly responsible for formulating climate-related risk management policy.
The Risk Management Committee will oversee the status and progress of the efforts to incorporate climate-related risks across portfolios and inform the Board of any material climate-related issues. In addition, the Risk Management Committee will regularly review the climate-related risks of portfolios.
2. INVESTMENT MANAGEMENT
During the investment process, the investment team identifies relevant and material physical and transition climate-related risks in connection with funds’ investment strategies. Climate-related data are incorporated into investment research and analysis to assess the impact of climate-related risks on funds’ portfolios. The investment team may adopt both qualitative and quantitative approaches as pre-investment tools to assess the climate-related risks. The investment team may also use third-party ESG scoring systems which facilitate portfolio construction and control the overall climate-related risk exposure of the portfolios.
3. RISK MANAGEMENT
After investing, the portfolio’s climate-related risk exposure will be constantly monitored. If there are any physical or transition risk in the assessment materially exceeds the Company’s pre-determined level, the investment team will adjust the portfolio’s climate-related risks accordingly.
The climate-related risk data or information of the portfolios will be regularly reported in the quarterly meetings of the Risk Management Committee for the monitoring purpose.
The Risk Management Committee reports to the Board the Company’s status and progress in terms of climate-related issues. Any significant issues identified during risk monitoring will be escalated to the Board and dealt with promptly.
This Disclosure Statement is available in both English and Chinese languages. The English version of this Disclosure Statement prevails to the extent of any inconsistency between the English version and the Chinese version. The Chinese version of this Disclosure Statement is for reference only.