Hong Kong institutional investors are mostly aligned with their whole of Asia peers on key climate metrics and are gradually recognizing the financial materiality of climate change, according to a recent report.

While some leading Hong Kong-headquartered investors have demonstrated notable progress in advancing their climate strategies, many institutional investors in the region are still gradually working to improve and broaden their climate considerations and strategies, including integrating physical risk management while also setting and meeting interim emissions reduction targets across their portfolios, finds the Asia Investor Group on Climate Change ( AIGCC )’s report, The State of Investor Climate Transition in Asia 2025, which reviewed 230 of the most significant and influential investors across the region.

The report assessed investors’ performance against metrics for managing climate risks and opportunities and includes data extracted from 18 institutional investors headquartered in Hong Kong with US$968 billion in collective assets under management.

With Asian investors highly exposed to climate impacts, the report highlights the need for more Hong Kong asset owners to take on the mantle and lead asset managers in the climate transition.

In summary, the Hong Kong investor cohort is aligned with the average Asian investor across a few climate aspects:

• Recognition of climate risks and opportunities: This is gradually becoming mainstream investment practice among Hong Kong investors as 73% of investors are now recognizing the financial materiality of climate change ( versus the overall Asia investor average of 75% ).
• Policy on climate integration in investments: Most of Hong Kong investors ( 72% ) have integrated climate considerations into their investment policies ( versus Asia’s 66% ).
• Publication of ISSB/TCFD-related disclosures: 50% of Hong Kong’s investors have published climate-related disclosures that are aligned with the international benchmark ( versus Asia’s 54% ).
• Publication of advanced scenario analysis: 50% of Hong Kong investors have published climate scenario analysis ( versus Asia’s 44% ).
• Policy on approaches to fossil fuels or high-emitting sectors : 44% of Hong Kong investors have disclosed results of portfolio physical risk assessments, although actions to build resilience and adaptation to climate risks remain nascent ( versus Asia’s 43% ).

Asset owners can take the lead and require more progressive climate-considerations in asset management mandates with fund managers. The following key areas for Hong Kong investors to improve are identified in the report:

• Climate solutions and transition finance: 17% of Hong Kong’s investors have a target, or disclose investment in, climate solutions investments, including transition investments and scaling up low-carbon solutions ( versus the overall Asia investor average of 35% ).
• Reporting on voting decisions: Very few ( 6% ) of Hong Kong’s investors have disclosed their stance on shareholder climate resolutions in their investee companies, which remains a key lever for Hong Kong investors to achieve Paris-aligned outcomes for their portfolios ( versus Asia’s 39% ).
• Interim portfolio emissions reduction target: 23% of Hong Kong investors have set near-term climate goals – for example, 2030 or 2035 emissions reduction targets – ( versus Asia’s 36% ). Setting robust interim targets form the basis for investor transition plans and near-term strategies.
• Disclosure of physical risks and adaptation actions: 39% of Hong Kong investors have disclosed results of portfolio physical risk assessments, including actions to build resilience and adaptation to climate-related risks ( versus Asia’s 3% ).
• Advocacy of climate-aligned policy/regulation: Currently 17% Hong Kong investors ( versus Asia average of 25% ) have referenced climate policy advocacy in their annual reporting. However, they do not yet appear to publicly disclose support or actions relating to climate policy advocacy and related engagements ( versus Asia’s 7% ).

“We’re pleased to see an increasing number of Hong Kong investors publishing disclosures in line with international standards, which reflects the Hong Kong government’s move to mandate investor climate-related disclosures,” says Rebecca Mikula-Wright, AIGCC’s CEO. “We encourage Hong Kong asset owners to step up their climate leadership and continue to demonstrate their commitment to the climate transition.

“By setting climate-aligned mandates, asset owners can strongly influence asset managers’ asset allocation and stewardship efforts to be more climate-aligned. Investors across Asia should complement corporate engagement targets with robust asset alignment targets. These remain nascent across the Hong Kong institutional investor landscape. The Net Zero Investment Framework 2.0 outlines how investors can do this.”