Banking & Finance

Green finance proposal planned by government’s Financial Services Development Council

Council chairwoman Laura Cha says Airport Authority and MTR Corp could lead the way on green bonds

PUBLISHED : Friday, 11 March, 2016, 7:27pm
UPDATED : Friday, 11 March, 2016, 7:36pm

The head of Hong Kong’s Financial Services Development Council (FSDC) says the Airport Authority and MTR Corporation could take the initiative in issuing green bonds as the government tries to encourage green financing.

FSDC chairwoman Laura Cha Shih May-lung said the government-appointed council, which aims to promote the city’s finance industry, planned to submit a proposal to the government on green finance in the next few months.

“The potential of green finance is huge, for example [providing funding to] water purifying projects and environmentally friendly buildings,” Cha, a National People’s Congress deputy, said in Beijing on Friday.

Green finance is a new trend in the world, Hong Kong should not lag behind
Laura Cha

The Airport Authority and Hong Kong subway operator MTR Corp could be the first corporations to issue green bonds to fund projects that could address climate change concerns, Cha said.

The bonds would be able to attract investment from institutional investors, she said. It was also expected that rating agencies would set “green ratings” for such bonds in the future that would help foster the development of green finance globally, she added.

“Green finance is a new trend in the world, Hong Kong should not lag behind,” Cha said. Some global investors, such as Norway’s sovereign wealth fund, had already set investment principles in regard to environment concerns, she said.

Rating agency Moody’s said in a study that global green bond issuance could exceed US$50 billion this year from US$42 billion last year.

Analysts have predicted strong growth in China’s green bond market as a channel to fund energy-saving and carbon emission projects amid the country’s pollution fight.

Meanwhile, Cha said the council had been working on promoting the city as a financial centre to global investors. However, it would need redouble effort to maintain their confidence after political disputes, Cha said, referring to the Mong Kok riots that erupted on the first day of the Lunar New Year and the Occupy Central movement.

The disputes did not really affect the normal operation of the financial market, but more effort would be needed to let global investors and companies understand the situation, she said.

Other disputes like filibusters in the Legislative Council had definitely slowed down the development of Hong Kong’s financial market, she said.