By Dr. Kevin Lau
Many economic activities are beneficial from the perspective of development, but they can cause damage to the environment. To achieve a win-win situation, one can consider green finance. Green finance is any structured financial product or service created to ensure a better environment. This includes loans, debt facilities, and investments, with the funds used to encourage the development of green projects or minimize the environmental impact of conventional development projects.
Currently, the development of green finance is thriving. By the end of this year, the value of the green bond market is estimated to reach HK$2.36 trillion. Not only does the United Nations believe that green finance can play an essential role in achieving sustainable development goals, and the market generally sees green finance as a way to meet environmental and capital production needs simultaneously.
As an international financial center, Hong Kong can fully leverage its advantages as an economic hub by developing green finance. It can also contribute to the country's "carbon dual goals" of carbon dioxide emissions to peal 2030 and achieve carbon neutrality by 2060. Statistics show that mainland China requires massive green investment to achieve these carbon dual goals, ranging from 100 to 180 trillion RMB. Two years ago, the issuance volume of green and sustainable debt in Hong Kong had already exceeded US$50 billion, including a significant portion of RMB green bonds. This demonstrates that promoting green finance and economic development can go hand in hand without conflict. Ordinary citizens can also participate in green finance, for example, by purchasing standard green financial instruments such as green bonds.
Hong Kong certainly lives up to its reputation as an international financial center. We have a vast financial market, a sound international regulatory framework, and the presence of leading global financial and professional institutions, green assessment and certification bodies, and international investors. In addition, the " Guidance on Financial Support for Greater Bay Area " announced in 2020 encourages more Greater Bay Area companies to utilize Hong Kong as a platform for green project financing and certification, as well as supporting Guangdong-based financial institutions to issue green bonds and other green financial products in Hong Kong. Therefore, I believe that Hong Kong, as an international financial center and a gateway for the country to the world, has the conditions and advantages to develop into a green finance hub in the region.
The author is a specialist in radiology with a Master of Public Health from the University of Hong Kong, and an adviser of Our Hong Kong Foundation.
The views do not necessarily reflect those of DotDotNews.
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