Hong Kong’s central banking institution, the Hong Kong Monetary Authority (HKMA), has announced the publication of Taxonomy for Sustainable Finance. The approval is aimed at defining and classifying environmentally sustainable economic activities to help inform the decision-making and facilitate green finance flows. The new taxonomy is released on 3rd May 2024. 

Let’s explore the HKMA Taxonomy in detail. 

What is HKMA Taxonomy? 

The HKMA released a discussion paper in May 2023 to promote sustainable finance and gather feedback from stakeholders. Based on its feedback, the officials fine-tuned the prototype and made Hong Kong Taxonomy. The taxonomy is a final standardized framework for classifying and labelling financial products based on their environmental sustainability characteristics. 

By using the guidelines in this document, investors can invest in activities that generate a positive effect on the environment to align investment with climate goals and reduce greenwashing risks. 
Read the official document. 

Who’s impacted by HKMA Taxonomy?

Currently, the taxonomy covers 12 economic activities across four sectors, including transportation, construction, power generation, and water or waste management. The HKMA is planning to expand its coverage to include additional sectors and transition activities in the future. Therefore, financial institutions and investors taking part in this sector will have to pay close attention to this standardized framework of HKMA Taxonomy. 

Next Steps for the HKMA Taxonomy

The HKMA encourages financial institutions to use the Hong Kong Taxonomy to assess the greenness of assets and projects when developing products. With its encouragement, it’s also continuing to collaborate with relevant stakeholders to contribute to sustainable development in Hong Kong and the world. 

While you’re here...

Professionals in private markets and asset management firms use Auquan’s Intelligence Engine to automate research and monitoring for deal sourcing, borrow screens and due diligence, risk monitoring, sustainability, and compliance workflows.

Using advanced AI techniques, Auquan generates material insights on any company or issuer worldwide — public or private — instantaneously, tailored for your workflow. 

Let’s explore how Auquan can help you and your team eliminate tedious and time-consuming manual data work and focus more on what you do best.