As the financial materiality of environmental and social issues becomes increasingly evident, it should be ensured that our banking system is resilient to environmental and social risks, and harness the power of banks to address sustainability challenges such as climate change. The recent webinar held by Our Hong Kong Foundation (OHKF), co-organized by Hong Kong Green Finance Association (HKGFA) demonstrated the importance of the banking industry in mobilizing green finance and ways of scaling it up.
The webinar was widely supported with over 25,000 audiences joining from around the world, which started with opening remarks from Mr. Joseph H. L. Chan, JP, Under Secretary for Financial Services and the Treasury, The Government of Hong Kong SAR, following a presentation by Mr. Johnson Kong, Researcher, OHKF on the trend and challenges of sustainable banking. The webinar came to its peak of a panel discussion with a lineup of the moderator: Mr. Stephen Wong, Deputy Executive Director and Head of Public Policy Institute, Our Hong Kong Foundation, and expert speakers from various realms: Ms. Pratima Divgi, Regional Director, CDP Worldwide, Mr. Jonathan Drew, Managing Director, Sustainable Finance, Real Assets & Structured Finance, HSBC, Dr. Ma Jun, Chairman and President, Hong Kong Green Finance Association, Professor Christine Loh, Chief Development Strategist, Institute for the Environment, HKUST; Visiting Professor, Anderson School of Management, UCLA, Professor Colin Mayer, Peter Moores Professor of Management Studies, Saïd Business School, University of Oxford; Academic Lead, Future of the Corporation Programme, The British Academy.
Sustainable Banking: Now and the Way Forward
26 June 2020
Guest of Honour:
- Joseph H.L. Chan, Under Secretary for Financial Services and the Treasury, The Government of Hong Kong SAR
Moderator:
- Stephen Wong, Deputy Executive Director and Head of Public Policy Institute, Our Hong Kong Foundation
Panelists:
- Pratima Divgi, Regional Director, CDP Worldwide
- Jonathan Drew, Managing Director, Sustainable Finance, Real Assets & Structured Finance, HSBC
- Ma Jun, Chairman and President, Hong Kong Green Finance Association
- Professor Christine Loh, Chief Development Strategist,Institute for the Environment, HKUST; Visiting Professor, Anderson School of Management, UCLA
- Professor Colin Mayer, Peter Moores Professor of Management Studies, Saïd Business School, University of Oxford; Academic Lead, Future of the Corporation Programme, The British Academy
Key takeaways from the webinar:
- The banking industry plays an important role in channeling capital to the right green investments or projects to drive borrowers or companies to become more sustainable, even more so for SMEs.
- Policymakers should make a bigger move in determining taxonomy, assisting the banking industry in directing money to green investments, setting procedures for managing environmental and social risks, consider setting up incentive structure, etc.
- Hong Kong is with great potential in green banking and sustainable finance but the progress needs to be further accelerated through closer collaborations across various industries.
Mr. Joseph H.L. Chan, Under Secretary for Financial Services and the Treasury, The Government of Hong Kong SAR, stated that the government has been and would continue to be supportive of the development in green and sustainable finance in Hong Kong. He added examples of the establishment of the Cross-Agency Steering Group by the HKMA and SFC.
Ms. Pratima Divgi, Regional Director, CDP Worldwide, focused on the regulatory perspective in that government should support by bringing more SMEs into the green finance realms by scenario analysis as planning, tracking and benchmarking, to allow greater understanding for the firms. Decarbonization pathway from the eyes of the industry is essential in considering the long-term strategies.
Mr. Jonathan Drew, Managing Director, Sustainable Finance, Real Assets & Structured Finance, HSBC, is positive towards the future of green finance. He provided examples from the green bond and green working capital to support that Hong Kong is with the smarts and a good foundation in further mobilizing ourselves to do better.
Dr. Ma Jun, Chairman and President, Hong Kong Green Finance Association, shared the key components of a sustainable banking system. He stated that banks should not wait for the regulatory body to issue a taxonomy, but should determine one from that of other countries. The government should consider setting up an incentive structure to motivate and assist various industries to take part in sustainable finance.
Professor Christine Loh, Chief Development Strategist, Institute for the Environment, HKUST; Visiting Professor, Anderson School of Management, UCLA, suggested the policymakers to have reminders when reviewing policies regarding sustainable finance. She stated that the essence should be an internalization of externalities, adjustments of risk perception to boost green investments, and directing money into green investments.
Professor Colin Mayer, Peter Moores Professor of Management Studies, Saïd Business School, University of Oxford; Academic Lead, Future of the Corporation Programme, The British Academy, reminded that the banking industry has a key role in the allocation of resources for funding investments in the economy, so deeper thoughts should go to how they can make a positive change in the companies they lend to or invest in.
Dr. Ma Jun and Mr. Stephen Wong during the webinar.