Greater Bay Area green financing deals climb to a record US$9.3 billion in second quarter
- Funding for ESG projects in the region reached 66.8 billion yuan (US$9.3 billion) in the second quarter, exceeding the previous high of 56.8 billion yuan in the first quarter
- ESG disclosures of the more than 2,000 companies operating in the bay area rose to 73 per cent last year, a marginal increase from 71 per cent a year earlier
Debt and loans issued to fund projects with environmental and social benefits in the area, amounted to 66.8 billion yuan (US$9.3 billion) in the three months to June 30, surpassing the previous high of 56.8 billion yuan achieved in the previous quarter.
Volumes grew 80 per cent to 121.7 billion yuan in the year’s first six months from the same period last year.
06:19
High hopes for China’s Greater Bay Area, but integrating 11 cities will pose challenges
“The steady economic and social development of the GBA continues to drive improvements in regional ESG performance,” said Liao Yuan, general manager of CECEP (Hong Kong) Investment, a subsidiary of the group. “Respective governments’ consistent efforts in advancing high-quality development will not only fuel the growth of green financing in the region, but also further reinforce the GBA’s edge in areas such as clean and renewable energy.”
The Guangdong government encourages financial institutions in the bay area to fast track green financing and facilitate the stock market listings of technology enterprises to drive the region’s transformation towards advanced and high-value manufacturing, said Daniel Chan, HSBC’s head of Greater Bay Area.
The study also found that of the more than 2,000 listed companies registered or operating primarily in the area, some 73 per cent have made ESG disclosures for the 2022 financial year, up from 71 per cent in the previous year. Hong Kong and Macau firms led with 94 per cent and 92 per cent disclosure rates, respectively.
However, the study noted that the proportion of property firms’ response rate to an invitation by international non-profit organisation CDP to disclose their climate-related information remained low at 15 per cent in 2022, the same as in 2020 and was below the average rate of eight key sectors studied.
This may reflect challenges they face in calculating and managing emissions attributable to external parties such as suppliers, the report said. Some 96 per cent of the bay area’s property firms had been invited to answer CDP’s questionnaire last year, up from 63 per cent in 2020.
The sector is key to China’s decarbonisation success since their carbon emissions – after including those attributed to their suppliers and customers – account for around half of mainland China’s total emissions, according to the China Association of Building Energy Efficiency.
Currently, ESG information disclosure is required on a “comply or explain” basis in Hong Kong under listing rules. But bourse operator Hong Kong Exchanges and Clearing has proposed to tighten them by making climate-related disclosures mandatory under its ESG disclosure framework as soon as early next year.
Among the eight industries studied, the industrials sector led on green and sustainable bonds issuance in the second quarter. It also scored the highest in overall ESG assessment, covering policy, environment, economic and social development, corporate governance and green and sustainable finance.
