The Green and Sustainable Finance Cross-Agency Steering Group, co-led by the Hong Kong Securities and Futures Commission (HKSFC) and HKEX [0388:HK], announced that the two bureaus have set up a Carbon Market WorkStream (CMWS) to assess the feasibility of building the city into a regional carbon trading center, according to HKSFC’s announcement on July 15. As one of the key tasks for the Steering Group in the next phase, CMWS will research on opportunities brought by carbon trading markets based on domestic and foreign experiences, as well as enhance collaborations within the Greater Bay Area (GBA). In addition to CMWS, the other two tasks referred to climate related disclosure and sustainability reporting, and the establishment of the Centre for Green and Sustainable Finance.
The Steering Group, established in May 2020, aims to accelerate the development of green and sustainable finance in Hong Kong and support the government’s climate strategies by coordinating the financial sector’s response to climate and environmental risks in a variety of ways. After Chinese President Xi Jinping pledged to reach carbon neutrality by 2060 in September 2020, Carrie Lam, chief executive of the Hong Kong Special Administrative Region (SAR), stated last November that the region would strive to achieve carbon neutrality by 2050, earlier than the country’s general goal. With such an ambitious target, the SAR government planned to update the Blueprint for Climate Action in Hong Kong in mid-2021, identifying detailed emission reduction measures.
Notably, this announcement followed the official launch of China’s national carbon market on July 16. HKSFC noted that amid the global trend of establishing carbon markets to move towards green, low-carbon, and climate-resilient economies, Hong Kong could play a strategic role as a gateway of the country and support financing the country’s carbon neutrality goal. In addition, the Centre for Green and Sustainable Finance will serve as a crossover platform that coordinates the training, research, and policy development of financial regulators, relevant government departments, industry stakeholders, and academic institutions. The Centre will also build a knowledge database of resources, data, and analysis tools to support the transition to sustainable development.