A lack of clear definitions for green projects and investment products places a growing compliance burden on asset managers, says Fidelity’s head of sustainable investing.

Hong Kong raised a record US$6 billion in its biggest multicurrency green bond offering, as the government looks to establish the city as a leading international green financing hub.

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.

The Greater Bay Area is expected to continue to lead the way in meeting China’s demand for capital to fund its decarbonisation push, facilitating up to US$28.29 trillion in financing.

The combined GDP of the 11 cities in the Greater Bay Area was close to US$2 trillion in 2022, up 25 per cent from US$1.65 trillion in 2019, Hong Kong’s finance chief says.

Hong Kong has approved grants for green and sustainable finance debt instruments with underlying issuances worth more than US$71.5 billion, according to Secretary for Financial Services and the Treasury, Christopher Hui Ching-yu.

Regulators and manufacturers intensify battle against greenwashing, a practice which could create disincentives for society to take decarbonisation and other sustainability actions seriously.

As the city strives to achieve carbon neutrality by 2050, Paul Chan believes it is ‘well positioned to be a leader in Asia for green finance and technology.’

China’s Greater Bay Area is promoting several decarbonisation projects that will embrace international disclosure and verification standards as it seeks to draw more green financing to help fund the country’s plan of achieving carbon neutrality by 2060.

Global efforts like the quality assessment framework to enhance voluntary carbon markets’ integrity will improve transparency and boost credit buyers’ confidence, analysts say.

The Nature Conservancy is studying various environmental initiatives in Asia-Pacific, with the aim of turning them into projects investors can get behind.

Artificial intelligence and improved data can help track risks from climate change and other factors to financial stability, according to central bankers and regulators at the Bank of International Settlements’ Innovation Summit.

The way Fitch, Moody’s and S&P Global have incorporated ESG factors into credit analysis has had no effect on their conventional credit assessments, according to the Institute for Energy Economics and Financial Analysis.

Plan for city to become global green tech finance centre to be unveiled in Wednesday’s budget

Hong Kong has successfully issued US$102 million worth of tokenised green bonds, the first such sale by a government globally, paving the way for digital bond offerings in the city.

The so-called tokenised green notes will test Hong Kong’s regulatory framework and financial infrastructure, said Joseph Chan, Hong Kong’s under secretary for financial services and the Treasury

Greater awareness and a sense of urgency on the need for climate mitigation and other sustainability actions will spur green bond issuances this year, JPMorgan’s Puja Shah says.

Companies in Asia have much catching up to do when it comes to their climate transition performance, and this could create opportunities for Hong Kong as a financial hub, according to participants at two forums on sustainable development.

Fewer Hong Kong companies are inclined to raise their spending on initiatives that enhance their environment, social and governance (ESG) performance this year, as economic headwinds draw their attention to other priorities, according to a survey by PwC.

The new rules, which could come into force in the first half of next year, could impact some or most of the green funds that make up the bulk of the 160 sustainable funds now in China.

Governments should issue a reward-based ‘carbon currency’ worth trillions of US dollars to encourage investors and businesses to fund projects that fight climate change, according to a policy advocate.

Enterprise green bonds – those issued by state-owned enterprises (SOEs) – have yet to apply China’s new Green Bond Principles and analysts urge change.

Hong Kong, Shenzhen and Guangzhou are accelerating their efforts to boost the development of sustainable finance as they vie to help generate capital for China’s carbon-reduction goals.

Sustainable finance refers to the sale of green bonds or other forms of fundraising to promote ESG activities, the fight to avert climate change, reduce pollution and community activities.

With rapid growth in the issuance of green bonds and a new carbon-credit trading platform, Hong Kong can play a pivotal role in the journey towards net zero, experts said ahead of a key summit this week.