Sustainable Finance Action Agenda
The Hong Kong Monetary Authority (HKMA) releases the Sustainable Finance Action Agenda, aimed at consolidating Hong Kong’s position as a sustainable financial center and supporting sustainable development in Asia.
The Sustainable Finance Action Agenda is divided into four aspects, each of which includes two goals. The Hong Kong Monetary Authority proposes specific plans for each target.
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Banking for Net Zero
Goal 1: All banks aim to achieve net zero emissions in operations by 2030 and in financing by 2050. The banking industry plays an important role in the transition to a low-carbon economy and needs to reduce carbon emissions in its operations and financing processes. The Hong Kong Monetary Authority will provide guidance on climate scenario analysis and risk management tools for banks, incorporate climate factors into regulatory review procedures, and support banks in developing transition plans. The Hong Kong Monetary Authority will also develop climate targets for banking operations based on the Science Based Targets Initiative.
Goal 2: All banks increase transparency on climate related risks and opportunities. Banks can help stakeholders understand the climate related risks and opportunities by disclosing sustainable development information. The Hong Kong Monetary Authority plans to develop a timetable to assist banks in disclosing based on the ISSB Standards and the Basel Committee’s Pillar 3 framework for climate related financial risks.
Investing in a Sustainable Future
Goal 3: The foreign exchange fund investment portfolio aims to achieve net zero emissions by 2050 or earlier. The foreign exchange fund will prioritize ESG investments in order to contribute to a sustainable economy, and since 2017, the weighted carbon density of the foreign exchange fund’s stock investment portfolio has decreased by 46%. The Hong Kong Monetary Authority will continue to expand the scope of sustainable investment, incorporate ESG factors into investment decisions, and pay special attention to climate change and transformation issues. The weighted carbon density of the foreign exchange fund’s stock investment portfolio is planned to decrease by 67% by 2030.
Goal 4: Support Asia’s transition through investment. The low-carbon transition in Asia requires a large amount of capital, and the Hong Kong Monetary Authority plans to invest in various activities that play a key role in economic transition, such as renewable energy and sustainable transportation. In addition, the Hong Kong Monetary Authority will establish a fund for low-carbon transition in Asia, prioritizing investment opportunities that have a positive impact on Asia’s transition.
Financing Net Zero
Goal 5: Build Hong Kong into the preferred sustainable development financing platform in Asia and globally. The Hong Kong Monetary Authority plans to provide funding to issuers, continue to leverage the role of the government’s sustainable bond program, encourage more institutions to choose green financing, and achieve the goal of sustainable bonds accounting for one-third of the total bond issuance.
Goal 6: Catalyze sustainable financial innovation. The Hong Kong Monetary Authority plans to leverage Hong Kong’s financial technology and sustainable financial center status to encourage innovation in the financial market, such as providing funding for digital green bond issuers, encouraging companies to develop sustainable technologies, and promoting the development of local sustainable ecosystems.
Making Sustainability More Inclusive
Goal 7: Support high-quality and comprehensive sustainable disclosure. Sustainable disclosure is the foundation of sustainable finance. The Hong Kong Monetary Authority will collaborate with the Green and Sustainable Finance Cross Agency Steering Group to provide more climate disclosure tools and work with industry organizations to provide sustainable disclosure training. The Hong Kong Monetary Authority will also provide high-quality sustainability disclosures based on global standards.
Goal 8: Fill the talent and knowledge gap in sustainable finance. The Hong Kong Monetary Authority will provide diversified training, conferences, and seminars to cultivate sustainable finance talents. For example, the Hong Kong Monetary Authority will launch Professional Level Enhanced Competency Framework for Green and Sustainable Finance, and provide more training programs and courses.
Reference:
Hong Kong Monetary Authority Unveils Sustainable Finance Action Agenda
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