Climate change is the defining challenge of our times, and the Asia Pacific region is critical to the effort to meet this global challenge. Rapid economic and population growth have resulted in the region being responsible for over half of the world’s emissions. The region’s high population density and geography also makes it highly vulnerable to rising sea levels and extreme weather events, necessitating immediate action to build resilience and adaptive capacity. While much of Asia is already accelerating mitigation and adaptation efforts, it is estimated that the region will require US$66 trillion of climate investment over the next three decades1. There is an urgent need to mobilise climate finance in the Asia Pacific to facilitate its transition to a low carbon economy.
As Asia’s leading international financial centre and green finance hub, Hong Kong has been channelling international investments to sustainable projects in Asia to support the region’s green transition. More than one-third of Asia’s green and sustainable bond issuances are arranged in Hong Kong. Over 200 ESG funds with assets under management of US$159 billion were authorised with the SFC as of 30 September 2023. We are the first Asian jurisdiction mandating climate-related disclosure across the relevant sectors by 2025, as well as the first market working to operationalise the Common Ground Taxonomy jointly developed by China and the EU. We have also been promoting innovation and adoption of new technologies in green finance; earlier this month, the Government issued its second digital green bond, marking the world’s first multi-currency digital bond offering.
While much progress has already been made, we are keenly aware that further collective efforts are necessary to mobilise additional financing sources towards sustainable action in the region. To this end, the HKMA has been partnering with other regulators, multilateral agencies, financial institutions and other key stakeholders to support the growth of Asia’s sustainable finance ecosystem. In Hong Kong, the Green and Sustainable Finance Cross-Agency Steering Group that we initiated with the SFC already serves as a good platform to strengthen Hong Kong’s financial ecosystem and coordinate the management of climate and environmental risks to the financial sector. Internationally, we have partnered with the International Finance Corporation (IFC) in the Managed Co-Lending Portfolio Program (MCPP) initiative targeting sustainable investments across emerging markets since 2017. We are also the first Regional Anchor to work with the IFC on the Alliance for Green Commercial Banks to boost financial institutions’ capacity for green finance and promote climate investments in the region. We welcomed plans of the Glasgow Financial Alliance for Net Zero (GFANZ) to set up a Hong Kong Chapter to accelerate the decarbonisation efforts across the region. As an inaugural member of the Capacity-building Alliance of Sustainable Investment and the Green Investment Finance Partnership, we also leverage Hong Kong’s strengths as a green knowledge and finance hub to facilitate sustainable financing in emerging markets, including those along the Belt and Road.
The Hong Kong Green Week, which will feature various sustainability-themed events across the city, is part of our broader efforts to promote the development of sustainable and green finance, as well as green technology in the region. Together with the IFC, we will host more than 300 top decision makers in global business and finance in Hong Kong on 26 – 28 February for the Climate Business Forum: Asia Pacific ("the Climate Business Forum"), the anchor finance event of the upcoming Hong Kong Green Week. Under the themes “Tackling challenges, exploring solutions” and “Financing solutions and a view to the future”, leaders in global businesses, government agencies, academia and financial institutions will delve into pressing topics that are crucial in the green transformation journey, such as energy transition, decarbonisation, green retrofit building and green technologies.
Building on the momentum generated by the Climate Business Forum, both private and public institutions have stepped forward to jointly organise a series of activities to promote discussions related to sustainable development. These comprise more than ten roundtables, seminars, and networking events by banks and financial institutions, consulting firm, university, research organisations, and international organisations, focusing on themes such as climate finance, carbon markets, electric vehicle supply chain, net-zero transition financing, green finance classification and financing green development in the Belt and Road region.
The Asia Pacific region’s transition to a sustainable future carries global significance. The path ahead will be challenging, but I look forward to working more closely together with all of you to maximise the impact of our efforts in facilitating the region’s transition. I hope that the Hong Kong Green Week will venture beyond the exchange of knowledge and views, but more importantly serve as a catalyst for policy changes and institutional commitments, as we work towards the collective goal of scaling up climate finance in the Asia Pacific.
Link: Hong Kong Green Week – Finance Stream
Eddie Yue
Chief Executive
Hong Kong Monetary Authority
26 February 2024
