CARE2022 Hong Kong Conference

66 As Hong Kong is an international financial centre, its regulators are at the forefront of global discussions on finance, including helping to shape sustainable and green finance best practices. Hong Kong’s regulators also engage with the relevant mainland and international authorities and institutions to promote interoperability across jurisdictions and influence evolving best practices affecting many jurisdictions. While time did not permit extensive discussions, several issues did emerge that would benefit from further exploration – these included: • Deepening collaboration across public and private sectors to serve the climate transition. • Improving data quality and emissions tracking systems and services to enable Hong Kong to be a green data service hub. • Increasing the capacities and capabilities of sustainability talent across the economy. • Incentivising the retrofit of existing buildings at scale for climate and liveability. • Financing the green shipping transition in partnership with Asian-based stakeholders. • Regional collaboration on many fronts, especially within the GBA/mainland. Government perspectives The Secretary for Financial Services referred to the importance of the Paris Agreement, that the 1.5°C target was not yet out of reach, and that the outcomes of COP27 included the Loss and Damage Fund for the most climate-vulnerable developing countries (see also Chapter 1). He emphasised Hong Kong’s role as an international financial centre connecting global capital with opportunities, and channelling 6 Financing the Climate Transition capital to empower green and sustainable development projects. Government, regulators, and the finance industry were working on strategies to provide the right infrastructure and catalysts to match international capital with quality green projects. Apart from having developed an active green debt business, HKSAR Government had also issued retail green bonds and was piloted tokenised green bonds as continuing innovation was important to growing the market. Another area of innovation was to develop Hong Kong as a voluntary carbon trading location, which the Hong Kong Exchanges and Clearing Limited (HKEX) was doing. The government understood the need for nurturing talent and HK$200 million had been earmarked to support green finance training for locally based market practitioners,2 as well as providing internships for young talent coming into the finance field.3 Regulators perspectives Regulators emphasised the need for collaboration to succeed in green and sustainable finance, as the role of finance should help economic activities to respond to climate change. Hong Kong’s financial regulators had three key tasks: • Setting clear and consistent climate risk rules – sharing the common aim to strengthening the management of climate risk and promoting the flow of related information, Hong Kong’s regulators issued climate risk management and disclosure rules for institutions they respectively supervised following global best practices. They have been working to adopt the Common Ground Taxonomy, produced by a working group of the International Platform on Sustainable Finance co-chaired by European Union and China, as the classification tool to assess “green”. Having such a taxonomy can lower the likelihood of greenwashing and improve the credibility of green financial products to help direct funds to support green businesses, assets, and projects.4 Christopher Hui, FSTB Eddie Yue, HKMA