Green and Sustainable Banking

Climate change is one of the major risks threatening the well-being of mankind. How the banking and financial system operates will clearly have an impact on the way in which climate risk is managed or reduced. The HKMA is committed to promoting green and sustainable finance in order to address climate risk.

In particular, the HKMA adopts a three-phased approach to promote green and sustainable banking:

• Phase I – developing a common framework to assess the “Greenness Baseline” of individual banks. The HKMA will also collaborate with relevant international bodies to provide technical support to banks in Hong Kong to better understand the green principles and methodology in undertaking the baseline assessment;
• Phase II – engaging the industry and other relevant stakeholders in a consultation on the supervisory expectation or requirement on Green and Sustainable Banking, with a view to setting tangible deliverables for promoting the green and sustainable developments of the Hong Kong banking industry;
• Phase III – after setting the targets, implement, monitor and evaluate banks’ progress in this regard.

The HKMA is also actively participating in international forums to support global development of green finance. As a member of the Central Banks and Supervisors Network for Greening the Financial System (NGFS), the HKMA participates in the Network’s working groups to explore how to incorporate climate risk and other green and sustainable factors in the supervisory framework and macro surveillance work.