Green finance: Hong Kong should pick the more stringent China, EU yardsticks for defining climate-friendly projects, says think tank

Name: World likely to breach 1.5°C global warming threshold sooner than we think, meteorologists warn
Uploaded: 2023-05-31T00:30:09.000Z
Duration: 2 min 34 s
Description: World likely to breach 1.5°C global warming threshold sooner than we think, meteorologists warn

The city can play a bigger role in channelling funds into green projects in China if it sets its bar higher to meet the requirements of a broader range of investors, says Civic Exchange

Doing so will enhance credibility and help Hong Kong cement its position as a sustainable finance centre, the think tank says

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The new taxonomy aims to reduce so-called ‘greenwashing’, the act of making unsubstantiated claims about the environmental benefits of a project. Photo: EPA-EFE

Eric Ng

Published: 8:30am, 31 May 2023

Hong Kong should adopt the more stringent criteria from those used by China and the European Union for defining green and climate mitigation projects to bolster its position as an international sustainable finance centre, according to a policy think tank.

The city can play a bigger role in channelling international funds into decarbonisation projects in China if it sets its bar higher to meet the requirements of a broader range of international investors, said Civic Exchange research analyst Bon Cheung.

“When Hong Kong aligns with the China and the European Union’s common ground taxonomy, where there are differences between the two standards, if we embrace the more stringent ones, it will enhance our credibility,” he told a briefing announcing the launch of a research report on Tuesday.

His comments come ahead of a market consultation expected to be launched by the Hong Kong Monetary Authority next month on developing a local “green taxonomy” framework for classifying economic activities considered environmentally friendly or sustainable.

Introduction of the taxonomy will increase transparency across financial markets and enable consistent green finance policymaking, the city’s de facto central bank said in its sustainability report published in April.

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World likely to breach 1.5°C global warming threshold sooner than we think, meteorologists warn

It aims to reduce so-called “greenwashing”, the act of making unsubstantiated claims about the environmental benefits of a product or practice.