The Hong Kong Monetary Authority (HKMA) launched the Sustainable Finance Action Agenda on October 24, 2024. The agenda sets out Hong Kong’s vision to consolidate the country’s position as the sustainable finance hub and support sustainable development in Asia and beyond. 

The new agenda is likely to drive increased demand for sustainable investment opportunities in Hong Kong, increase transparency regarding climate-related risks and opportunities, and lead to new regulations and compliance. Private equity and credit firms, asset managers, and impact investors with a focus on Hong Kong should carefully consider this agenda. 

Let’s explore the Sustainable Finance Action Agenda of Hong Kong in detail. 

About the Sustainable Finance Action Agenda 

The Sustainable Finance Action Agenda is a framework developed by HKMA to position Hong Kong as a leading sustainable finance hub. The agenda includes a set of goals (specifically eight goals) divided into four key areas and the key actions to achieve those goals in the mentioned timeline. This initiative seeks to promote collaboration between entities operating across different sectors, including stakeholders, businesses, financial institutions, and regulators, to create a holistic approach to sustainable investment and financing practices.

Chief Executive of HKMA, Mr Eddie Yue, said, “Climate change is the defining challenge of our time. Hong Kong, as an International Financial Centre and Asia’s sustainable finance hub, has the duty and capability to up our game in facilitating sustainable fund flows and ensuring that banks manage the risks associated with the net zero transition properly. The Action Agenda sets out the HKMA’s vision in this regard, including where we are heading, when we endeavor to reach various milestones, and how we expect the industry to join hands with us in the sustainable journey.”

Goals of Sustainable Finance Action Agenda 

The agenda includes eight goals in four key areas:

Banking for net zero

• 
  All the banks should aim to achieve net zero in their financed emissions by 2050 and in their operations by 2030. 
• All banks should increase their transparency on climate-related risks and opportunities. 

Investing in a sustainable future

• 
  Achieve net-zero emissions for the Investment Portfolio of the Exchange Fund by 2050. 
• 
  Support sustainable transition in the region through investment. 

Financing net zero

• Make Hong Kong a go-to sustainable financing platform in Asia and beyond. 
• 
  Encourage innovation in sustainable financing. 

Making sustainability more inclusive

• 
  Support high-quality and detailed sustainability disclosures. 
• 
  Close the talent and knowledge gap in sustainable finance in the region. 

The agenda mentions key actions for every goal, so the stakeholders and the government of Hong Kong will have a roadmap to follow to fulfill each goal. 

Next steps

The HKMA will work on implementing the Sustainable Finance Agenda, including developing a series of tools, regulations, and services to be released in the coming months to get the guidelines accepted across the country. In addition, the government will review the current agenda and refine it down the road whenever necessary. 

While you’re here…

Financial institutions, private equity and credit firms, asset managers, and impact investors with operating companies in Hong Kong should carefully consider the new Sustainable Finance Action Agenda released by HKMA, in their strategies and risk assessments to capitalize on opportunities and mitigate potential risks.

However, keeping up with government initiatives like this and assessing them accurately can be challenging. This is where Auquan comes into play. 

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