Hong Kong Monetary Authority (HKMA) will collaborate with the International Finance Corporation (IFC) to set up a green commercial banking alliance, as reported by Xinhuanet on November 9. The alliance will gradually expand from Asia to other regions across the world and include banks, other financial institutions, research institutes, and technology innovation companies to help the banking industry cope with climate change and push for green finance businesses. IFC forecasts that climate-related investment opportunities in emerging markets over the following decade will be worth up to USD29tr.
According to the International Monetary Fund (IMF), green finance refers to the allocation of financial industry cash flows through financial instruments into green sectors, to address climate change, events, and related risks. Hong Kong has been working on and facilitating green finance over recent years. In September 2018, the Hong Kong Securities and Futures Commission (SFC) released a Strategic Framework for Green Finance. The framework lists three major tasks, including improving ESG information disclosure with a focus on environmental and climate-related risks, promoting green or ESG-related investment products, as well as building the city into an international green finance hub. In the same month, Hong Kong Green Finance Association (HKGFA) was established to push for green finance and sustainable investments. In 2019, the total amount of green bonds issued in Hong Kong reached USD10bn, with the accumulated scale of USD26bn by the year-end 2019. Moreover, HKMA President Yu Weiwen stated that the authority and the Hong Kong government are undergoing a multi-year green bond issuance plan, worth HKD100bn in total.