HKMA, SFC Issue Green and Sustainable Finance Strategy

The Green and Sustainable Finance Cross-Agency Steering Group, jointly founded by Hong Kong Securities and Futures Commission (SFC) and Hong Kong Monetary Authority (HKMA), released its green and sustainable finance strategy on December 17, according to HKMA’s website on the same day. The Steering Group listed six areas in the strategy to improve Hong Kong’s financial ecosystem, focusing on climate related information disclosures and risk management, while facilitating green and sustainable investments. Moreover, it also stated a goal to build Hong Kong into a green finance center within the Greater Bay Area (GBA) by taking advantage of central policies, as well as enhancing regional and international collaboration.

Along with the six key areas, the Steering Group proposed five actions to take in the short term. First is to launch compulsory climate disclosure requirements for financial institutions before 2025, to provide more climate change related information from companies and assets in the financial market. Another point is to promote scenario analysis and assessment of different climate effects on financial institutions. Other actions include developing globally unified sustainability reporting standards, adopting upcoming Common Ground Taxonomy from the International Platform on Sustainable Finance (IPSF), and setting up a coordination platform among regulators, government agencies, academia, etc. and for green and sustainable finance resources.

Hong Kong SFC issued its green finance strategic framework in 2018, and led the establishment of the Steering Group with HKMA in May 2020, with other five members such as the Hong Kong Exchanges and Clearing Limited [0388:HK]. At that time, the SFC’s framework already focused on ESG disclosures, especially environmental and climate related risks. After Chinese President Xi Jinping pledged for carbon neutrality by 2060 in September, at the end of last month, Hong Kong SAR Chief Executive Carrie Lam announced that the city would strive to achieve carbon neutrality before 2050. To complete the target, Hong Kong will release its new climate action plan in mid-2021. The Steering Group’s strategy also works as a supporting initiative to the 2050 carbon neutrality goal.

Sources:

https://www.hkma.gov.hk/eng/news-and-media/press-releases/2020/12/20201217-4/

https://www.senecaesg.com/blog/hong-kong-aims-for-carbon-neutrality-before-2050/

https://www.senecaesg.com/blog/hong-kongs-green-finance-development-pt-1-regulatory-efforts-and-recent-progress/