Climate Blog
2023-10-19
Policy Recommendations for the 2023 HKSAR Policy Address Consultation on Green and Climate Finance
As the climate crisis escalates globally, green finance is imperative not just to direct capital towards environmental and sustainable projects, but as a manifestation of our collective commitment and obligation for urgent climate action. While the Hong Kong SAR government touts aspirations to become a green finance hub, its vision and leadership in this crucial area remain deficient. To truly stand at the forefront of the global sustainability transition, the government must proactively implement the following recommendations from Greenpeace and CarbonCare InnoLab:
The government must assume decisive regional leadership
As Asia's preeminent financial epicentre, Hong Kong must demonstrate leadership by expeditiously enhancing its green finance competitiveness to defend its status as the leader in Asian financial services. Firstly, the government needs to strongly incentivize corporations and financial institutions to adopt internationally accredited green finance standards. This alignment with global norms will attract foreign investment and promote local economic sustainability.
Secondly, the government must compel financial regulators to institute stringent green information disclosure frameworks on par with the most rigorous international standards, encompassing carbon emissions reporting and net zero alignment. This level of transparency and accountability will enable Hong Kong to spearhead green finance and sustainability standards regionally and globally.
Last year, the total green and sustainable bonds issued in Hong Kong accounted for 35% of the Asian market, ranking first in Asia. However, some government-led green bond projects failed to disclose actual decarbonisation outcomes, and their carbon and waste reduction benefits remain questionable, like financing incinerator construction. To genuinely achieve carbon neutrality, the government must lead the way in transparency based on the most advanced international standards, and elevate the environmental benefits of green bonds, in order to convince investors of Hong Kong's capability to assume leadership of Asia's green finance market.
The obfuscated HK$240 billion climate fiscal plan requires immediate disclosure
When announcing its 2050 carbon neutrality target three years ago, the government claimed it would allocate HK$240 billion for decarbonisation and climate adaptation. Yet it has failed to disclose specifics on deploying this critical funding. The government must urgently enhance transparency around its climate fiscal planning to comprehensively account for how Hong Kong will meet its carbon neutrality commitment.
Additionally, the government needs to allocate designated funding to catalyse green finance innovation and research. It also must actively collaborate with other cities and international organizations to share best practices. By financing global climate adaptation projects via Hong Kong, the government can assertively drive the advancement of climate finance worldwide.
Enhance Transparency and Strengthen Anti-Greenwash Efforts to Develop a Green Finance System Prioritizing Environmental Sustainability
Greenwashing has dangerously proliferated worldwide, so Hong Kong must mandate stringent disclosure requirements that compel corporations to provide comprehensive and transparent sustainability information. This will enable investors and consumers to scrutinize corporate environmental practices and arm them with evidence to expose greenwashing. Moreover, legislation with harsh sanctions against greenwashing must be introduced immediately to guarantee sincerity.
Clear guidelines from regulators are needed to define qualified green finance standards and projects, mandate emissions disclosure, and enforce strict net zero alignment to prevent greenwashing and ensure environmental priorities remain paramount. Development of robust green finance frameworks and combating "greenwash" requires extensive multi-stakeholder consultation, not just with the finance sector, but also with environmental and ecological bureaus, departments and NGOs, to embed sustainability principles.
Green finance represents both sustainable growth and climate leadership for Hong Kong. To retain its vanguard status, the Hong Kong government needs to urgently and decisively heed these recommendations and incorporate them into policies and future planning. We must ensure green finance generates tangible climate and social benefits, especially for vulnerable communities. Realizing a sustainable future demands assertive government leadership, participation and collaboration.
Initiating Groups (in alphabetical order)
CarbonCare InnoLab and Greenpeace