Globally, green finance has gathered momentum since the 2015 Paris Agreement on climate change. Hong Kong is uniquely situated to contribute to global developments in green finance and the creation of a green financial ecosystem.
On 21 September 2018, the SFC announced its Strategic Framework for Green Finance. It sets out a five-pronged strategy which goes beyond Hong Kong’s current focus on green bonds and is aligned with global market and regulatory developments:
- As a priority, to enhance listed companies’ reporting of environmental information emphasising climate-related disclosure, taking into account the Mainland’s policy direction to target mandatory environmental disclosure by 2020, and aiming to align with the TCFD recommendations.
- To conduct a survey of asset managers and asset owners participating in the Hong Kong market on their sustainable investment practices, to engage with the industry to formulate appropriate policies, codes and guidance, and to work towards obliging asset managers to disclose how and to what extent they consider ESG, especially environmental factors, in the investment and risk analysis process.
- To facilitate the development of a wide range of green-related investments, including listed green products, as well as unlisted, exchange-traded and OTC green products. This would include providing disclosure guidance and harmonised criteria and frameworks to facilitate product disclosure and reporting, and working with Hong Kong Exchanges and Clearing Ltd (HKEX) on how it can develop and promote the listing and trading of green financial products such as bonds, indices and derivatives.
- To support investor awareness of and capacity building in green finance and investment related matters by working with the Investor and Financial Education Council, other financial regulators, industry associations and stakeholders.
- To promote Hong Kong as an international green finance centre by participating in international initiatives, as well as exploring cooperation opportunities with environmental authorities.
HKGFA, which aims to position Hong Kong as a global green finance hub, will continue to assist SFC to clarify its green finance framework, promote green and sustainable banking, develop green capital markets, and integrate ESG in investments.