HKMA launches plan to boost HK as sustainable finance hub

The Hong Kong Monetary Authority (HKMA) today (October 21) launched the Sustainable Finance Action Agenda (Action Agenda), setting out its vision to further consolidate Hong Kong's position as the sustainable finance hub in the region and support the sustainable development of Asia and beyond.

The "Action Agenda" includes eight goals in four areas:

Banking for net zero

- All banks strive to achieve net zero in their own operations by 2030 and in their financed emissions by 2050.

- All banks to enhance transparency on climate-related risks and opportunities.

Investing in a sustainable future

- Achieve net-zero emissions for the Investment Portfolio of the Exchange Fund by 2050.

- Support transition in the region through investment.

Financing net zero

- Develop Hong Kong into the go-to sustainable financing platform of the region and beyond.

- Catalyse innovation in sustainable finance.

Making sustainability more inclusive

- Support high-quality and comprehensive sustainability disclosure.

- Close talent and knowledge gaps in sustainable finance in the region.

The HKMA plans to prioritize ESG investments across all asset classes in its Exchange Fund, to reduce the "weighted average carbon intensity" of its investment portfolio by 67% by 2030 from its 2017 levels, having already achieved a 46% reduction. It aims for net-zero emissions by 2050 or earlier.

Additional measures include setting up a dedicated fund for low-carbon transitions in Asia, encouraging external asset managers to finance regional sustainable development, and fostering more institutions to raise sustainable funds in Hong Kong. The objective is for one-third of all bonds arranged in Hong Kong to be sustainable bonds.

HKMA Chief Executive Eddie Yue stated that Hong Kong has the duty and capability to further guide capital towards sustainable investments while ensuring that banking institutions manage the risks associated with the net-zero transition effectively. He expressed hopes to outline the HKMA's future directions and timelines for achieving various goals, urging the industry to take more effective actions to solidify Hong Kong's status as a sustainable finance center.

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