The three measures of the HKMA supported green finance. Chen Delin expected the first batch of green debt to react quite well.
The government announced yesterday a roadshow on green bonds that may be sold, and the HKMA is the government representative for the sale of green bonds. At the same time, the HKMA has also announced three initiatives to support and promote the development of green finance in Hong Kong. The Chief Executive of the HKMA, Mr Chan Tak-lin, believes that Hong Kong is financially prosperous and has a good credit rating. It is expected that the initial green bond market will react “very well”.
The HKMA held the “Golden Financial Forum of the HKMA” yesterday. In an opening speech at the forum, Chen Delin said that in response to climate change risks and the development of green and sustainable finance, the HKMA will implement three major measures, including the promotion of green and sustainable banks. Promote green and ESG (environmental, social and governance) investments and establish green financial centers.
Promote green finance in three phases
In promoting green and sustainable banking, Chen Delin said that it will be implemented in three phases: the first phase is to establish a common framework with the industry to assess the bank’s current “green” benchmark; the second phase is to set up a package to enhance Hong Kong’s banking industry. Green and sustainable development goals; the third phase is to implement, review and evaluate the progress of banks in this regard. Chen Delin expects that the first phase of work will be completed in the next 12 months.
As for responsible investment, Chen Delin said that as the investment manager of the Exchange Fund, the HKMA will give priority to the ESG investment principle, that is, the long-term benefits of green and ESG (environmental, social and governance) investment and other investment projects. When the risk is adjusted, the ESG investment will be given priority. Chen Delin believes that this approach is more practical and feasible than setting hard targets or ratios, and it is easier to promote the concept of green investment.
Yingong: Hong Kong can be connected to international investors
In addition, the HKMA will set up a green financial centre under the Infrastructure Finance Promotion Office (IFFO) to provide a technical support and experience sharing platform for the green development of the banking and financial industry in Hong Kong. At the same time, the Green Finance Center will co-organize the next “Climate Business Forum” with the International Finance Corporation in Hong Kong in early 2020.
The Chairman of the Banking Association, Mrs Pei, said that the HKMA is welcome to start with the industry to promote green and sustainable financial development. She quoted the survey as saying that between 2017 and 2030, the investment in climate projects in emerging markets around the world will reach US$23 trillion, reflecting the fact that green finance is the general trend. As an international financial center, Hong Kong also plays the role of a super-contact in mainland China. Its advantage lies in its ability to connect international investors with green finance in Asia and help overseas investors to invest their money in green projects.
In addition, Ms. Hui pointed out that the Banking Association had set up a Green Finance Committee earlier. The Committee will work closely with the Green Finance Centre to establish a common framework for the banking industry and will also strengthen the green finance awareness of investors and the banking industry.
Banking industry sets green financial goals
Gao Yingxin, vice chairman and chief executive officer of BOC Hong Kong (2388), said that Dawan District plans to make green finance development an important concept. The bank has also formulated a green finance development plan, which will carry green ideas throughout various business links and will promote Dawan in the future. The district’s green financing project will go to Hong Kong, which will offer preferential green lending rates and attractive green bond yields.
Huang Bijuan, chief executive of HSBC Greater China, said that Hong Kong’s green bond issue last year reached $11 billion, of which Hong Kong issuers issued $2.3 billion, an increase of nearly five times. The bank has made five commitments to sustainable financial development two years ago, including $100 billion for sustainable financial financing by 2025, and 30% of the target has been completed. Both BOC and HSBC said they will actively participate in the government’s green bond issuance work.