The Bloom of Green Finance in Hong Kong

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According to the Asian Development Bank (ADB), Hong Kong is the third largest bond market in Asia (excluding Japan) behind Mainland China and South Korea. Green finance is growing rapidly in Hong Kong with16 green bonds issued in Hong Kong with a total issuance of USD$6.8 billion.  Issuers of these green bonds include Hong Kong and Mainland Chinese businesses and multilateral development banks.

In June 2018, the Hong Kong Monetary Authority (HKMA) hosted the International Capital Market Association (ICMA) 2018 Green and Social Bond Principles Annual General Meeting & Conference’ in Hong Kong. This conference brought together public and private sector executives from all over the world to discuss developing trends and potential regulatory developments in the green finance market, enhancing collaboration between Hong Kong and international green finance industries. This is the first time the high-profile international conference has been held in Asia, highlighting the advantages of Hong Kong as a major international financial centre and green finance centre.

Eddie Yue, Deputy Chief Executive of HKMA, said that long-term perspectives should be considered when managing investments, and he also expressed that exchange fund investments should incorporate environmental, societal and governance elements and focus on sustainable development.

Vincent Lee, Executive Director of HKMA, said in the briefing on green finance development held on the 11th June  that during the first 5 months of 2018, at least 13 green bonds were issued in Hong Kong with a total issuance of more than USD$5 billion, presenting a positive trend in the issuances.

In recent years, the HKSAR government also has made great efforts to develop green finance, including topics such as environmental protection and climate change into financing decisions. The government offers a grant up to HKD$800,000 to bond issuers certified by the Hong Kong Quality Assurance Agency (HKQAA) to support further development of green finance. Various strategies implemented by the HKSAR show that Hong Kong’s green finance is developing positively.

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