The Hong Kong Monetary Authority (HKMA) has taken further concrete steps to strengthen banks’ climate resilience and assist them in maintaining safety and soundness in transition planning. The HKMA circular issued on 29 August 2023 sets out high-level principles for authorised institutions (AIs) in planning for a net-zero transition.

Some key highlights:
– Setting clear objectives and targets that are aligned with net-zero transition, the goals of the 2015 Paris Agreement and based on science-based pathways.
– Setting up a robust governance framework and embedding transition considerations into internal processes to facilitate implementation.
– Devising appropriate initiatives and actions to achieve the objectives.
– Engaging with clients actively and provide support.
– Performing reviews and updates as climate scenarios and sectoral pathways evolve over time.
– Maintaining transparency for the transition planning process and/or transition plans.

More details of the circular:
https://www.hkma.gov.hk/media/eng/doc/key-information/guidelines-and-circular/2023/20230829e1.pdf

HKGFA will continue to work closely with the regulators and other industry members in transition planning knowledge exchange and capacity building.