Hong Kong Moves to Strengthen Its Sustainable Finance Ecosystem

Hong Kong’s Green and Sustainable Finance Cross-Agency Steering Group (Steering Group) has announced its key priorities to further promote and consolidate Hong Kong’s role as a leading sustainable finance hub.

According to Eddie Yue, Co-Chair of the Steering Group and Chief Executive of the Hong Kong Monetary Authority, transitioning to a net-zero future will require concerted efforts by all sectors in the Asian financial centre, as well as substantial investment.

“Building on the strong cross-agency collaboration under the Steering Group, we are actively integrating transition considerations into our ongoing developmental and regulatory work, by incorporating the latest international developments on transition planning, providing clear guidance on disclosure, increasing data availability, as well as promoting innovation and technology to grow financial solutions. We hope to contribute to the region’s progressive transformation to a greener and more sustainable future,” said Yue.

The key priorities the Steering Group identified are:

Establish world-class regulation through alignment with global standards:

To develop a comprehensive Hong Kong roadmap on adopting the International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards as appropriate, taking into account Hong Kong’s position on the global green finance map, local regulatory expectations, and circumstances. A working group will be set up with the participation of relevant authorities and stakeholders to look into the elements to be covered by this roadmap and make recommendations to the Steering Group.

Boost Hong Kong’s vibrancy and competitiveness through capacity building, data enhancement, and technology innovation of the finance ecosystem to support net-zero transition across the economy:

Workshops will be arranged to support non-listed companies and small and medium-sized enterprises (SMEs) in their sustainability planning and reporting, as well as their broader usage of available data sources and tools. A data portal will also be developed to increase the availability and accessibility of climate-related data collected through the Climate and Environmental Risk Questionnaire for Non-listed companies/small and medium-sized enterprises. In addition, opportunities for public-private partnerships to promote the development of technology-driven solutions will be explored, together with engaging with relevant stakeholders to develop a Hong Kong green fintech map to raise the profile of firms in this sector.

Grow dynamic, trusted markets with diverse products to mobilise capital at larger scale to support the net-zero transition:

Relevant agencies in the Steering Group have been integrating transition considerations into their broader policy work to support sustainable finance development. A dedicated workstream will explore ways to further support financial institutions and corporates in their transition planning and reporting. Meanwhile, efforts are being extended to build Hong Kong into an international carbon market to connect opportunities across Mainland China, Asia, and the rest of the world.

Julia Leung, Co-Chair of the Steering Group and Chief Executive Officer of the Securities and Futures Commission added: “The climate transition brings tremendous business and investment opportunities. To capture these opportunities across the region, the Steering Group will continue its efforts in developing key enablers for Hong Kong, including the implementation of a clear and robust regulatory framework on sustainability disclosures, diversity in financial products, and capacity-building support for the industry.”

“Technology is essential to increasing market efficiency and transparency. As a priority, the Steering Group will work with relevant stakeholders to build Hong Kong into a green fintech hub,” she added.

Established in May 2020, the Steering Group is co-chaired by the Hong Kong Monetary Authority and the Securities and Futures Commission. The Steering Group aims to coordinate the management of climate and environmental risks to the financial sector, accelerate the growth of green and sustainable finance in Hong Kong and support the Government’s climate strategies.