The Green and Sustainable Finance Cross-Agency Steering Group has announced the next steps to advance its collaborative strategy to bolster Hong Kong's position as a leader in green and sustainable finance and help transition the financial ecosystem towards carbon neutrality.
As priorities, the Steering Group will focus on climate-related disclosures and sustainability reporting, carbon market opportunities and the launch of the new Centre for Green and Sustainable Finance.
Climate-related disclosures & sustainability reporting
Making progress towards mandating climate-related disclosures aligned with the Task Force on Climate-related Financial Disclosures (TCFD) framework by 2025 across relevant sectors, the Steering Group supports the efforts by the International Sustainability Standards Board under the International Financial Reporting Standards Foundation (IFRS Foundation) to develop a new standard which would be built on the TCFD framework. The Securities and Futures Commission (SFC) and the Hong Kong Exchanges and Clearing Limited (HKEX) will collaborate with the Financial Reporting Council and the Hong Kong Institute of Certified Public Accountants to work on a roadmap to evaluate and potentially adopt the new standard.
Carbon market opportunities
The Steering Group seeks to set up a Carbon Market Work Stream (CMWS) co-chaired by the SFC and HKEX to assess the feasibility of developing Hong Kong as a regional carbon trading centre to strengthen collaboration in the Guangdong-Hong Kong-Macao Greater Bay Area. The CMWS will actively explore opportunities presented by both the cap-and-trade carbon market and the voluntary carbon market in China and overseas.
Centre for Green and Sustainable Finance
The Steering Group launched the Centre for Green and Sustainable Finance (CGSF) to help the financial industry manage the risks and capture the opportunities presented by climate change. The Centre is a cross-sector platform that coordinates the efforts of financial regulators, government agencies, industry stakeholders and academia in capacity building, thought leadership and policy development. It will also serve as a repository for resources, data and analytics which support the transition to a more sustainable development pathway.
The Steering Group has identified talent and data as the priority areas of action. Accordingly the Centre has established working groups to develop strategies and roadmaps to promote capacity building and develop data repository and analytics capability. The working groups will consult other stakeholders when formulating their recommendations.
Mr Ashley Alder, co-chair of the Steering Group and CEO of SFC, said, “As an international financial centre, Hong Kong has a significant role to play both regionally and globally in the development of sustainable finance to address the risks posed by climate change. Hong Kong can lead the way in climate reporting by adopting the first set of global sustainability standards to ensure that consistent, comparable and reliable information is available to help investors understand the extent to which their portfolios are exposed to climate risks and they are financing emissions.”
Established in May 2020, the Steering Group is co-chaired by the HKMA and the SFC. Members include the Environment Bureau, Financial Services and the Treasury Bureau, the HKEX, the Insurance Authority and the Mandatory Provident Fund Schemes Authority.