Link REIT CONNECTION 2021

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CONNECTION is Link’s annual conference to update participants on our business strategy and more importantly, seek opportunities to grow together. CONNECTION 2021 was held on 29 March 2021 (Wed). The theme of this year’s conference is “Simplifying Decarbonisation“, where we will focus on three key areas to navigate the uncharted waters: Why Businesses Should Focus on Decarbonisation; What the Current State of Decarbonisation in Hong Kong is and the Technologies Available; as well as How to Finance Decarbonisation Actions. With an interactive format, we hope to better understand the challenges our stakeholders have and create encompassing solutions together. The event was composed of three workshops.

In the third workshop, HKGFA’s Vice Presidents – Mr. Jonathan Drew and Mr. Stephen Wong; alongside Deputy Secretary General, Ms. Tracy Wong Harris, shared their insights and opportunities in the green and sustainable finance realm.

 

Link REIT CONNECTION 2021 – Highlight 

Workshop 1: Why we should focus on decarbonisation and what it might mean to business  operations 

  • Net-zero is a global trend, there are around 30 countries announcing national net-zero policy in the past year, including China. Hong Kong is also one of the 800 cities that announced a net-zero target. 
  • Decarbonisation goes hand in hand with both green financing and reducing the  carbon intensity of energy fuel mixes 
  • Hong Kong is well positioned to be the green finance hub for China and the Asia region. The government has expanded the scale of its green bonds programme by doubling the borrowing ceiling to HKD 200 billion, so as to allow for further issuance of green bonds, totalling HKD 175.5 billion within the next five years.  
  • Green finance is good for issuers because green bonds help reduce the cost of borrowing. It also benefits the equity market, there is an upward shift of share price of firms when their green bond receives independent verification or certification.  
  • Besides relying on fuel mixes changes, there are three approaches for Hong Kong companies to do. Firstly, they should come up with their own net-zero pathways.  Secondly, they should optimise energy efficiency, this typically involves doing energy audit and changing behaviour. Thirdly, they should embrace smart technology because it provides more information to identify the gaps on energy saving. 

Workshop 2: Current developments and state of decarbonisation technology solutions 

  • Link has rolled out a 2035 Net Zero strategy 
  • To achieve a healthier and more resilient future, Link has adopted a new business philosophy called “Business as Mutual”. This approach focuses on coordinating and aligning the efforts of multiple stakeholders around common material issues. As such, risks and opportunities can be better managed, and this helps realise a more resilient society.  
  • The BEC Low Carbon Charter is the first step for companies to start their decarbonization journey.  
  • Under the BEC Low Carbon Charter, companies can choose their own pathways  which align the goals of the Paris Agreement.  
  • Under the BEC Low Carbon Charter, most companies are focusing on reducing scope  1 & 2 emissions. Some companies are setting scope 3 targets and a few are advancing to Paris-based targets or net-zero targets.  
  • Digital Technology enables better measurement, management and monitoring of energy data, thus contribute to sustainability.  
  • There are digital building advisor systems that help companies save energy costs of up to 20%. This also covers energy intensive facilities such as chillers.  
  • There are also resource advisor systems that help companies track and report enterprise sustainability data (Water, Energy, Waste, Supply Chain and more),  including Scope 3. 
  • IoT and cloud-based solutions are the focuses of sustainability technology. There is also an intensifying need for cybersecurity to enhance cyber resilience. 

Workshop 3: Sustainable financing options available to support your decarbonisation efforts 

  • There is exponential growth in the sustainability bond and loan market in the globe over the past 5 years. 
  • There are diversified and promising developments in Green Finance in the Greater  Bay Area.  
  • HKGFA is currently working on five research projects which include maximising the green finance opportunities in green building area; a blockchain and solar energy research that aims to develop new funding structure by combining green energy policy and fintech solutions; a GBA carbon trade platform that allows international investors to enter the China carbon trade market; a green supply chain programme for the automobile industry in Guangdong, and an electronic solid waste management project in Shenzhen.  
  • There are opportunities for SME to embrace green finance. SME with better sustainability ratings can enjoy a lower cost of financing, they might get return of payments when they purchase energy efficient devices.  
  • According to the government’s latest Green and Sustainable Finance Grant Scheme,  there will also be reimbursement to cover bond issuers and loan borrowers’  expenses of bond issuance and external review services. This policy is favourable to both large corporations and SMEs that participate in green finance. 

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