Hong Kong can become green bond financing hub for Greater Bay Area, monetary authority says

Green bonds issued in Hong Kong reached US$26 billion by end of 2019, of which 70 per cent were issued by Chinese entities

City can become a green bond financing hub particularly for Greater Bay Area, Edmond Lau says

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Hong Kong’s green bond market is quite mature and follows international standards, Edmond Lau says. Photo: AFP

Published: 8:49pm, 24 Nov 2020Updated: 1:11pm, 21 May 2021

Hong Kong can become a green bond financing hub for the Greater Bay Area, helping mainland companies raise funds for development projects that are positive for the environment, according to the Hong Kong Monetary Authority.

“Hong Kong’s green bond market is quite mature in terms of its facilities and supporting measures, and follows international standards,” said Edmond Lau, the HKMA’s senior executive director overseeing external affairs, financial infrastructure and research. “We think the city can become a green bond financing hub for mainland China, particularly in the Greater Bay Area.”

This would align with China’s goal of becoming carbon-neutral by 2060. President Xi Jinping told the United Nations General Assembly in September that the country aimed to hit peak emissions before 2030, and to achieve carbon-neutrality over the following three decades.

The cumulative amount of green bonds – fixed-income products designed to fund projects that are environmentally friendly – issued in Hong Kong reached US$26 billion by the end of 2019, according to a report on the city’s green bond market by Hong Kong Institute for Monetary and Financial Research (HKIMR) released on Tuesday.

Mainland Chinese entities accounted for more than 70 per cent of issuances by the end of last year, while financial institutions accounted for around half of the green bonds issued last year.

The report presented the findings of a survey conducted by HKIMR in collaboration with accounting firm Ernst & Young among 48 green bond issuers and investors, including financial institutions, governments and multilateral development banks.