Integrating Sustainable Finance in Greater Bay Area and Beyond
HONG KONG, Sept. 22, 2022 /PRNewswire/ — Hong Kong Green Finance Association ("HKGFA") held its fifth annual forum titled "Integrating Sustainable Finance in GBA and Beyond" in conjunction with Greater Bay Area Green Finance Alliance’s ("GBA-GFA" or "the Alliance") third annual meeting in Hong Kong today. The event revealed key milestones and progress made by GBA-GFA’s six working groups over the past 12 months, and discussed ways to further integrate GBA’s sustainable finance market and to enhance Hong Kong’s role as a super connector between Mainland China and the rest of the world. The Forum attracted over 1,500 in-person and virtual participants across Asia and beyond.
From the right: Dr. Ma Jun, Chairman and President of HKGFA, The Hon. Mr. Paul Chan Mo-po, Financial Secretary, the Hong Kong Special Administrative Region Government and Mr. Tan Yabo, Deputy Director-General, Economic Affairs Department of the Liaison Office of the Central People’s Government in the HKSAR
The annual meetings also marked the beginning of Hong Kong’s Presidency (2022-23) of GBA-GFA, which was chaired by Shenzhen (2021-22) and Guangdong (2020-21) in the last two years. The Alliance was established with the aim of convening resources of the four cities in the Greater Bay Area ("GBA" or "the Bay Area"), namely Guangzhou, Shenzhen, Hong Kong and Macau to support green finance development in the Bay Area.
The hybrid Forum provided an opportunity for government agencies, regulators, C-suite executives, sustainable finance industry leaders and service providers from Hong Kong, GBA and other markets to share their perspectives and promote initiatives that will help launch the next phase of sustainable finance market growth in this region and across the world.
The Forum’s opening session was attended by senior government officials. The Hon. Mr. Paul Chan Mo-po (Financial Secretary, the Hong Kong Special Administrative Region Government), Mr. Wang Xin (Director General, Research Bureau, People’s Bank of China), Mr. Yu Haiping (Director of Guangdong Financial Supervisory Authority), Mr. He Jie (Director-General of Shenzhen Municipal Financial Regulatory Bureau), and Mr. Chan Sau San (Chairman, Board of Directors, Monetary Authority of Macao) delivered their opening remarks which highlighted the importance the GBA green finance collaboration in supporting China’s climate and sustainable development agenda.
Key focus areas of the event’s discussion include the harmonisation of taxonomies and disclosure standards that are shaping policy and market developments, Hong Kong’s carbon market ambition, as well as the emergence of transition finance and data-related technologies designed to enable a sustainable ecosystem.
The Hon. Mr. Paul Chan Mo-po, Financial Secretary, the Hong Kong Special Administrative Region Government, said in his opening remarks, "As an international financial center, Hong Kong can connect green and sustainable capital in both mainland China and international markets to facilitate green transition of the GBA and other mainland provinces. In Hong Kong, we are exploring the development of a local green classification framework for the Hong Kong market based on the Common Ground Taxonomy ("CGT"), while dovetailing green classification methods between the mainland and the European Union to align Hong Kong’s standards with international best practices. We are also set to launch the Pilot Green and Sustainable Finance Capacity Building Support Scheme to enrich the green finance talent pool in Hong Kong. Lastly, it is worth noting that we are actively exploring opportunities for the long-term development of carbon markets. We are looking to further explore the prospect of developing Hong Kong into a quality international voluntary carbon market, and to continue capitalizing on the tremendous opportunities for green development in the GBA and the mainland."
Dr. Ma Jun, Chairman and President of HKGFA, said in his remarks, "HKGFA has expanded its membership to 160 organizations, and has been extremely active in delivering services in the areas of capacity building, policy research, product innovation and international cooperation. We are committed to supporting the development and upskilling of Hong Kong’s ESG talent. Just in the past 12 months, HKGFA organized and co-organized 80 events to promote green and sustainable finance, including the launch of Sustainable Finance Training Programs in collaboration with Hong Kong University of Science and Technology and Hong Kong Financial Services Institute. Looking ahead to next year, as the Presidency of GBA-GFA, HKGFA will devote greater resources to coordinate the six working groups in facilitating green finance collaboration in the GBA area. HKGFA will also further promote the adoption of the Common Ground Taxonomy, support the HKSAR government’s effort to develop a voluntary carbon market, and explore ways to support the development of green technologies and net zero industries in Hong Kong."
Mitigating climate risk has become a priority for governments and regulators globally. The Securities and Futures Commission ("SFC") has worked closely with fellow regulators, the government, and the financial industry on improving international comparisons, consistency, and interoperability of climate-related disclosures.
Mr. Ashley Alder, Chief Executive Officer, SFC and Chairman of the Board of the International Organization of Securities Commissions ("IOSCO"), said, "Hong Kong can play a unique role in the development of sustainable finance. Our financial markets connect a vast amount of global capital with a large number of leading Mainland businesses as well as with developing economies across Asia. We have been actively involved in shaping international standards for sustainable finance and adopting them in Hong Kong will help us meet heightened global expectations and capitalise on the immense opportunities arising from China’s national commitment to carbon reduction."
Mr. Nicolas Aguzin, Chief Executive Officer, Hong Kong Exchanges and Clearing Limited (HKEX), said, "As a super connector between East and West, HKEX is uniquely positioned to mobilise capital to facilitate the city’s development as a regional green and sustainable finance hub in the Greater Bay Area. At HKEX, we have an important role to support companies on their ESG transformation journey and to promote sustainable finance products that will facilitate our transition to a low-carbon economy. We look forward to continuing to work with our stakeholders in Hong Kong and beyond, to shape a vibrant green and sustainable finance ecosystem."
Mr. Joseph Chan, Under Secretary Financial Services Treasury Bureau, (FSTB), said "As Asia’s leading international financial centre leading various league tables in the region, Hong Kong is well-positioned to be the region’s green and sustainable finance hub, raising green and sustainable capital and offering green and sustainable financial products for the region. In fact, in 2021 the total green and sustainable debt issued in Hong Kong reached US$56.6 billion, which is four times of the previous year. The volume of green and sustainable bonds arranged in Hong Kong last year accounts for one-third of the Asian green and sustainable bond market, while Asia’s first Green Bond ETF was launched in Hong Kong this year.
The HKSAR Government will continue to provide a conducive environment, including issuing more Government Green Bonds and launching the Pilot Green and Sustainable Finance Capacity Building Support Scheme, to develop and promote green and sustainable finance in Hong Kong."
HKGFA’s eight working groups continue to work with the Hong Kong government, policymakers, regulatory bodies and the private sector in advancing Hong Kong’s position as a leading international sustainable finance hub.
HKGFA’s efforts and achievements were highlighted through the four panel discussions covering the following topics:
· Integrating Global Standards and Climate Related Disclosure into Investment Strategies: Harmonising global standards and policies is critical to achieving transparency, comparability and operability of data. Hong Kong’s proposed alignment with the common ground taxonomy can help accelerate sustainable financing capital flows, enabling increased cross-border flows, reduced transaction costs and mitigating green washing to facilitate decarbonisation in the real economy.
- Expanding the Role of Carbon Markets in Asia: Greater collaboration, standardisation and harmonisation of carbon principles in the GBA can help Hong Kong achieve its ambitions to develop a voluntary carbon market. Speakers discussed the importance of adoption of Integrity Council for Voluntary Carbon Markets’ ("ICVCM") Core Carbon Principles ("CCP") to ensure high quality and standards of carbon credits and China’s Certified Emission Reduction ("CCER"). Investment demand for high-integrity voluntary carbon credits is expected to grow as countries have committed to net-zero targets and Hong Kong is well positioned to intermediate this demand as a super connector between international investors, Mainland China and beyond.
- ESG Data and Technology Innovations: It is universally agreed that access to high quality ESG data and climate-related technology infrastructure are critical tools to enable a firm’s ability to implement efficient and transparent decarbonisation strategies However, the lack of agreed global green standards makes comparability and integration of data across markets, industries and sectors, remains a challenge in accelerating the transition to a sustainable system and mitigating greenwashing.
- Transition Finance Pathways to Achieving Net Zero Targets: Carbon-intensive industries require trillions of dollars of investments and capital to transition businesses to net zero. Financial institutions play a significant role in funding energy transition projects and need clear frameworks to manage and monitor the science-based targets and pathways to net zero. Identifying and funding new alternative low-carbon fuel sources, such as sustainable aviation fuel, together with collective action, is needed to achieve carbon neutrality by 2050.
HKGFA and its partners also launched two thought leadership reports. The first one, titled "Decarbonising the buildings in the GBA", covers the third phase of the Green Buildings Project and was developed in collaboration with GBA-GFA and led by HKGFA and HK2050isNow. After an extensive review of GBA’s existing policies and available data relevant to green finance and decarbonization, the research group recommends regulators in the GBA cities to improve buildings energy data management, encourage the pursuit of net-zero carbon buildings and subsidize certification costs for high performing buildings.
The second report themed "CGT Research Series Phase 2", a collaboration between the Guangdong Green Finance Committee and HKGFA members, examines important use cases of CGT with key considerations of usability and interoperability, and concludes that effective adoption of the CGT requires an alignment to local regulation, green standards and data availability. Phase 3 of the research will focus on how these use cases can be utilized to support the development of a Hong Kong taxonomy based on CGT.
At the closing session of the Forum, HKGFA Chairman and President, Dr. Ma Jun, stated that, "HKGFA will continue to bring together expertise and stakeholders across the public and private sectors to advance Hong Kong’s position as a major green financial hub within the GBA and internationally. We will double down our efforts in facilitating the implementation of the Common Ground Taxonomy in Hong Kong to unleash the potential for cross-border green capital flows, strengthening and expanding the green finance and ESG talent pool in Hong Kong through capacity building and developing education programs, as well as developing more innovative approaches to GBA green finance collaborations through GBA-GFA."
The Annual Forum was sponsored by Bank of China (Hong Kong) Limited, The Hongkong and Shanghai Banking Corporation Limited, Standard Chartered, PricewaterhouseCoopers Hong Kong (PwC), Schroder Investment Management (Hong Kong) Limited, UBS, MioTech, Mirae Asset Global Investments (Hong Kong) Limited, Moody’s, Natixis Corporate & Investment Banking and Société Générale, a public limited company incorporated in France, acting through its Hong Kong Branch.
About Hong Kong Green Finance Association
Founded in September 2018, Hong Kong Green Finance Association (HKGFA) provides a unique platform that supports the development of green finance and sustainable investments in Hong Kong and beyond. It aims to mobilise both public and private sectors resources and talents in developing green finance policies, to promote green finance business and product innovation within financial institutions. HKGFA’s main goal is to position Hong Kong as a leading international green finance hub by providing greater access and opportunities for Hong Kong’s financial institutions to participate in green financing transactions locally, in Mainland China and in markets along the Belt & Road. This is in line with the global trend of implementing the UN sustainable development goals and the Paris Agreement.
HKGFA’s key activities are organised through eight working groups, namely Green and Sustainable Banking, Green and Sustainable Private Equity, Green and Sustainable Real Estate, Green Bonds and Product Innovation, ESG Disclosure and Integration, Policy Research and Dissemination, Green and Sustainable Insurance, and External Collaborations. Please visit https://www.hkgreenfinance.org/ for more information.
About Greater Bay Area Green Finance Alliance (GBA–GFA)
The GBA-GFA is a collaboration between the Hong Kong Green Finance Association (HKGFA), the Green Finance Committee of Guangdong Society for Finance and Banking (GDGFC), the Green Finance Committee of Financial Society of Shenzhen Special Economic Zone (SZGC), and the Macau Association of Banks. The Alliance aims to promote green finance research, standards and certifications and incubating green investments that will benefit the GBA by leveraging the green investment demand in Guangdong and Shezhen and green finance capacities in Hong Kong and Macau.
 GBA-GFA’s six working groups include (1) Greater Bay Area Green Finance Annual Report (2021-2022), (2) Applying Common Ground Taxonomy and Product Alignment to GBA, (3)Decarbonising Buildings in the Greater Bay Area; GBA Deep Decarbonisation Roadmap and Transition Finance Opportunity, (4) Greater Bay Area Green Financing in Supply Chain, (5) GBA Climate Fund Research, (6) GBA Green Finance Standard Mutual Recognition