Earth Day: Paul Chan says Hong Kong has the expertise, liquidity to support region’s transition finance needs
- Hong Kong can ‘position ourselves as the hub for sustainable investments’, finance chief tells Earth Day forum
- Need more guidance on definitions, examples and very clear deadlines to address transition risks: SynTao Green Finance International’s Stan Ho
Hong Kong can do more to help finance the transition of high-emitting sectors and heavy-polluting industries to more sustainable business activities as a hub for the region, Financial Secretary Paul Chan Mo-po said at an Earth Day forum on Monday.
“Transition finance is not just an investment strategy,” Chan told the Earth Forum, an event organised by Friends of the Earth (HK), the Hong Kong Financial Services Development Council and China Sustainable Investment Forum.
“It is a catalyst for positive change. Hong Kong has the opportunity to lead in this area, and [to] position ourselves as the hub for sustainable investments.”
“I believe we can do more,” Chan said. “There is clearly room to explore how Hong Kong could better help channel capital to support the transition of high-emitting sectors and heavy-polluting industries in the region.”
As an international financial centre, Hong Kong has gathered top-class financial institutions with very deep liquidity, Chan added.
Transition finance seen as a crucial tool in the fight against climate change
“We have the expertise, infrastructure and regulatory framework that support international investors and different transition projects. We are the gateway that connects capital flows and green projects, not only within the territory but also in the broader region.”
The framework, which will be aligned with the common ground taxonomy adopted by mainland China and the European Union, will be released “very soon”, Chan said.
Green finance: surge of climate-transition guidance to promote decarbonisation
Developing a taxonomy can help address transition risks, “but only when we have more guidance in terms of definitions, examples and also very clear deadlines as well”, Stan Ho, the chief representative of SynTao Green Finance International, said during a panel at the forum.
From the perspective of the energy transition and understanding that Asia does need to rapidly transition to net zero, there are huge gaps and hurdles that need to be overcome, said Valerie Kwan, director of stewardship and corporate engagement at the Asia Investor Group on Climate Change.
“We are already at a stage where we’re ready to go beyond the baseline expectations that are stipulated in regulations,” Kwan said.
Hong Kong must embrace green finance as opportunity, responsibility: HKMA CEO
“What investors are looking for is really a company’s ability to demonstrate whether they have adopted that market lens to understand their own company’s role in the transition, to demonstrate that they are ready to support the transition [and] decarbonisation, but also understand what the transition to net zero means to them as a company,” she said.
“It’s been a long journey,” Diana Parusheva-Lowery, managing director and head of public policy and sustainable finance at the Asia Securities Industry & Financial Markets Association, told the panel. “[HKEX] started before ISSB was announced yet, so it’s really great to hear that the final product is here.
“We look forward to many more jurisdictions in the region and globally following suit, because things in Europe do not look exactly the same, and this is going to bring a problem for investors and global firms, if we cannot reach a close enough understanding about what and how needs to be disclosed.”
