2023 HKGFA Annual Forum - Transition to Net Zero: From Ambition to Action

HONG KONG,Oct. 4,2023 -- The Hong Kong Green Finance Association ("HKGFA") hosted its sixth Annual Forum in Hong Kong today,with the theme "Transition to Net Zero: From Ambition to Action". Over 1,500 participants from Hong Kong,mainland China,and beyond attended the forum,either in person or virtually. The HKGFA Annual Forum brought together policy makers,regulators,corporates,and civil society groups to deepen the dialogue on actions needed to accelerate sustainable finance and investment in the transition to net zero.

The forum's morning session was attended by senior government officials from Hong Kong and mainland China. The Hon. Mr. Paul Chan Mo-po,Financial Secretary of the Government of the Hong Kong SAR,delivered opening remarks that emphasized Hong Kong's ambition to become a preeminent international GreenTech and GreenFi centre,and outlined the Government's strategy to achieve this vision. Mr. Eddie Yue,Chief Executive of the Hong Kong Monetary Authority ("HKMA"),Ms. Julia Leung,Chief Executive Officer of the Securities and Futures Commission ("SFC"),and Mr. Wong Chuen Fai,Commissioner for Climate Change of the Environment and Ecology Bureau ("EEB") of the Government of the Hong Kong SAR,introduced key initiatives launched by Hong Kong in areas such as taxonomy,disclosure,and transition finance. Mr. Wang Xin,Director-General of the Research Bureau of the People's Bank of China ("PBOC"),provided an update on transition finance-related progress in mainland China.

From the right: Ms. Julia Leung,Chief Executive Officer of the Securities and Futures Commission,Ms. Salina Yan,Permanent Secretary for Financial Services and the Treasury (Financial Services) of the Government of the Hong Kong SAR,Mr. Tan Yabo,Deputy Director-General,Economic Affairs Department of the Liaison Office of the Central People's Government in the HKSAR,The Hon. Mr. Paul Chan Mo-po,Dr. Ma Jun,Chairman and President of HKGFA,Mr. Eddie Yue,Chief Executive of the Hong Kong Monetary Authority and Mr. Wong Chuen Fai,Commissioner for Climate Change of the Environment and Ecology Bureau of the Government of the Hong Kong SAR

Industry experts discussed the actions needed to achieve net zero by 2050 from finance sector and corporate perspectives. These include the development of credible,science-based sectoral transition pathways,the role of carbon pricing,scaling financial product innovations as part of a just transition,and incentivizing the private sector to finance emerging green technology-driven solutions.

The Hon. Mr. Paul Chan Mo-po,Financial Secretary of the Government of the Hong Kong SAR,said in his opening remarks,"Green is a global agenda. As the world moves towards green transition,the need for funding in this sector is growing rapidly. Hong Kong has set out our vision to become an international green tech and green finance centre. The substantial volume in green bond issuance demonstrates Hong Kong's leading position as a pre-eminent platform and service provider in Asia. Our experience in the issuance of the world's first government tokenised green bond based on blockchain technology highlights our ability to apply financial innovation to the bond markets and green finance. The innovation and technological strengths of Hong Kong will be further boosted by our deepening collaboration with sister cities in the Greater Bay Area."

Mr. Paul Chan Mo-Po,Financial Secretary of the HKSAR

Dr. Ma Jun,Chairman and President of the HKGFA,said,"Scaling up transition financing and aligning with international standards requires collaborative action across the economy by all stakeholders. A stronger public-private sector partnership is needed to apply sustainable finance standards in Hong Kong,including the CGT-based taxonomy and the ISSB reporting framework. This will allow Hong Kong to develop an eco-system for green technology innovation,mobilize more private sector financing for transition activities,and enable the city to become an influential player in the global voluntary carbon market."

Dr. Ma Jun,Chairman and President of the HKGFA

Mr. EddieYue,Chief Executive of the HKMA,said,"Hong Kong has always been the hub connecting mainland China with international markets,and is well positioned to channel the needed investment to support the mainland's dual-carbon goal. The HKMA will continue to work closely with other government agencies and the industry,both in the mainland and overseas,to build a vibrant and competitive sustainable finance ecosystem that can support Hong Kong's important role as a 'green connector'."

Ms. Julia Leung,Chief Executive Officer of the SFC,"Companies will need to carefully develop and articulate their plans to transition to a low-carbon economy so that mainstream investments can capitalize on the tremendous transition opportunities across mainland China and Asia. Green fintech solutions and disclosures aligned with the common international language of ISSB are key to implementing these plans,enhancing market efficiency and transparency in order to finance climate transition needs."

Ms. Salina Yan,Permanent Secretary for Financial Services and the Treasury (Financial Services) of the Government of the Hong Kong SAR,"Green technology,the fundamental force driving transition,has been experiencing tremendous growth over the years.The Government is committed to establishing Hong Kong as an international green technology and green finance centre,and has set out clear directions for accelerating development.As green technological innovation and adoption speeds up,green finance needs to keep pace and play a crucial role in funding the transition. Hong Kong stands ready to play a key role in this."

Hong Kong's robust capital markets can facilitate the development of a green tech ecosystem by bolstering the efforts of private equity and venture capital funds,incubators,and accelerators. These funds can support the advancement of green tech products and solutions by helping to scale investments in green and low-carbon technologies in Hong Kong and mainland China.

In 2023,the HKGFA revamped its working group structure from eight to five groups,with ten active workstreams focusing strategically on the transition priorities of Hong Kong and the GBA. The HKGFA's efforts and insights were highlighted in the following four panel discussions at the Annual Forum:

Achieving credible,science-based transition pathways:Sectoral transition pathways,transition finance frameworks and science-based targets are crucial to mobilize finance for high carbon-emitting sectors. These elements provide benchmarks which financial institutions can use in their lending portfolios,as well as setting clear industry targets. Access to data,harmonized standards,clear policy,and private and public capital are also required to ensure transition plans are met,targets and actions are delivered,and greenwashing is minimized.

The role of carbon pricing: Putting a price on carbon is essential to account for the environmental and social costs of carbon emissions. Carbon pricing mechanisms,including emissions trading,carbon taxes,and internal carbon prices set by companies can help governments and businesses make informed decisions. However,voluntary markets access and high-integrity carbon credits are in the early stages of development. Frameworks such as the Core Carbon Principles ("CCP") from the Integrity Council of Voluntary Carbon Markets ("ICVCM") can play a key role in supporting the development of high-integrity voluntary capital market developments in Asia.

Scaling financial innovations and solutions for transition:Net zero planning tools such as those developed by the Glasgow Financial Alliance for Net Zero ("GFANZ") are useful for financial institutions to identify strategies and solutions that can help catalyse a just transition in the real economy. Leveraging technology and data analytics,as well as showcasing successful transition financing solutions by sector,can also propel delivery on net zero commitments.

Advancing green tech for a net zero future:Green tech innovation is vital for global economies to decarbonize at lower costs. Mobilizing public and private capital is necessary to build a thriving green tech ecosystem in Hong Kong,while cooperations across supply chains and investors are needed to support the scaling and mainstream adoption of emerging green technologies in Hong Kong and the GBA.

As part of its efforts,the HKGFA launched a report titled "CGT Research Series Phase 3: Operationalizing IPSF Common Ground Taxonomy in the Greater Bay Area" in partnership with members of the Guangdong Green Finance Committee. This report examines ways to operationalize the Common Ground Taxonomy ("CGT") in Hong Kong and the GBA,and market considerations around the development of the HKMA's Taxonomy prototype based on the CGT. Another recently updated HKGFA report,"Decarbonisation Pathways and How Finance can Help to Accelerate Business to Transition in Guangdong-Hong Kong-Macao Greater Bay Area" highlights the US$1.84 trillion financing required to achieve carbon neutrality by 2060 in the GBA,and advocates the policies needed to unlock cross-border capital flows.

This year's HKGFA Annual Forum was sponsored by Bank of China (Hong Kong) Limited,The Hongkong and Shanghai Banking Corporation Limited,Standard Chartered,PricewaterhouseCoopers Hong Kong,UBS,MioTech,Moody's,Natixis Corporate & Investment Banking,and S&P Global.

From the right: Ms. Jenny Lee,Deputy Secretary General of HKGFA,Mr. Ben McQuhae,Vice President of HKGFA,Ms. Tracy Wong Harris,Executive Vice President of HKGFA,Ms. Chaoni Huang,Chief Executive of the Hong Kong Monetary Authority,Mr. Wong Chuen Fai,Commissioner for Climate Change of the Environment and Ecology Bureau of the Government of the Hong Kong SAR,Mrs. Sally Wong,Ms. Carmen Kan,General Counsel of Bank of China (Hong Kong),Mr. Jonathan Drew,Vice President of HKGFA and Mr Tsun Chen,Secretary General of HKGFA

About the Hong Kong Green Finance Association

Founded in September 2018,the Hong Kong Green Finance Association (HKGFA) provides a unique platform that supports the development of green finance and sustainable investments in Hong Kong and beyond. It aims to mobilize both public and private sector resources and talents in developing green finance policies,to promote green finance business and product innovation within financial institutions. The HKGFA's main goal is to position Hong Kong as a leading international green tech and green finance hub by providing greater access and opportunities for Hong Kong's financial institutions and corporates to participate in green financing transactions locally,in mainland China,and in markets along the Belt & Road. This is in line with the global path to implementing the UN Sustainable Development Goals and the Paris Agreement.

The HKGFA's key activities are organized through five working groups,namely Banking – Financing the Transition,Product Innovation and Solutions,Sustainability-related Disclosures,Policy and Standards,Greater Bay Area Green Finance Alliance,and Real Estate. Please visit https://www.hkgreenfinance.org/ for more information.