Hong Kong’s de facto central bank mulls making green rules mandatory for banking sector
- A framework issued last month provides a good reference point for investors and issuers to prevent greenwashing, HKMA director says
The Hong Kong Monetary Authority (HKMA) is keen to make its green taxonomy framework mandatory for the banking sector to support the development of sustainable financing in the city.
“We will look into whether to make it mandatory, at least for the banking sector, so that we have a solid investor base,” said Kenneth Hui, executive director (external) of HKMA, at the launch of the University of Hong Kong’s Jockey Club Enterprise Sustainability Global Research Institute on Thursday.
“Right now it’s voluntary, so capital market and banking [participants] can choose to adopt it. We believe it provides a good reference point for investors as well as issuers to basically have a clear definition of what is green and what isn’t.”
A taxonomy is important to prevent greenwashing – making unsubstantiated claims about the environmental benefits of a product or service.
The HKMA is currently working on broadening the coverage of the taxonomy to include other green activities beyond the four sectors, said Hui. “Hydrogen and hydropower are things that we have in mind right now.”