MPF exam Introduction to ESG question: MPFA's principles on sustainable investing

MPF examIntroduction to ESG

Under the MPFA's principles on sustainable investing, which of the following are expectations of MPF trustees? (i) have a governance framework to monitor investment managers' management of ESG risks (ii) formulate an ESG integration strategy at the MPF scheme level (iii) disclose ESG integration strategies and report implementation progress regularly (iv) invest at least half of every constituent fund in ESG constituent funds

A (i) and (ii) only
B (i), (ii) and (iii) only
C (ii), (iii) and (iv) only
D (i), (ii), (iii) and (iv)

Show the answer and explanation

Answer: B. (i), (ii) and (iii) only

Answer: (i), (ii) and (iii) only. Statements (i), (ii) and (iii) reflect the governance, strategy and disclosure elements; the principles impose no ESG allocation.(i) True. The governance element.(ii) True. The strategy element.(iii) True. The disclosure element, including metrics and targets adopted.(iv) False. The principles set no minimum allocation to ESG funds.Why not the others:• (i) and (ii) only: omits the true (iii).• (ii), (iii) and (iv) only: includes the false (iv) and omits the true (i).• (i), (ii), (iii) and (iv): includes the false (iv).Watch out: Reading the principles as an allocation mandate.Rule: Principles: governance framework; scheme-level strategy; ESG in investment and risk processes; disclosure and progress reports.Source: MPF Study Notes, Tenth Edition (June 2026; examinable from 1 Oct 2026), section 9.3 (checked 31 Oct 2026)