HKMA, SFC team up with government agencies as Hong Kong sets sights on becoming green financing hub
- Seven regulatory bodies and government agencies will work together to promote the city as a green financial hub to capture a slice of the US$350 billion market
- A working group comprising officials from these seven agencies will work together to develop regulations and promote the city’s green credentials
Hong Kong on Tuesday made its biggest push to date in its bid to become a green financing hub and capture a slice of the market that is expected to be worth US$350 billion this year.
Seven financial regulators and government bureaus, led by the Hong Kong Monetary Authority and markets watchdog Securities and Futures Commission, set up a cross-agency body – Green and Sustainable Finance Cross-Agency Steering Group – to promote the initiative.
They will be joined by the Insurance Authority, Mandatory Provident Fund Schemes Authority, Hong Kong Exchanges and Clearing, Environment Bureau and Financial Services and the Treasury Bureau.
“We need different agencies to work together to develop the regulations for green financing and promote. It cannot be developed by a single regulator,” Edmond Lau, a senior executive director at HKMA, said during a teleconference.
Over the next six months, the steering group will focus on disclosure requirements for green financing and other promotional strategies.
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Although it has the requisite talent and infrastructure for green financing, the sector still needs promotion and appropriate regulation, said officials during the teleconference.
Julia Leung, deputy chief executive of the SFC, said they would work with mainland and European experts on green taxonomies and disclosure standards.
“Climate change is a source of financial risk impacting the entire financial sector,” said HKMA chief executive Eddie Yue Wai-man who is co-chair of the steering group along with SFC chief executive Ashley Alder.
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“As a premier international financial centre, Hong Kong can play a pivotal role in promoting sustainable development and powering the transition, especially in Asia,” he said.
Some US$48 billion worth of green bonds have been issued globally so far this year and as much as US$350 billion in new green fundraising is projected for all of 2020, according to the Climate Bonds Initiative, a London-based non-profit organisation. That would represent a 36 per cent increase over 2019 when a record US$257.5 billion was issued.