HKMA published a report, from the Hong Kong Institute for Monetary and Financial Research (HKIMR), that offers a comprehensive overview of the development of green bond markets globally and particularly in Hong Kong. The report also discusses the results of an HKIMR-commissioned survey, which gathered views and insights of local market participants, highlighting both the opportunities and challenges in the green bonds market in Hong Kong. The report concludes by proposing a set of suggestions to accelerate the development of green bonds market.
The survey results show that existing participants cite large number of international investors, availability of supporting policies, solid presence of socially responsible issuers, and transparent Environmental, Social and Governance (ESG) information disclosure as the leading advantages of the Hong Kong market. Nearly 71% of existing issuers and 100% of existing investors indicate that they have plans to participate in the future. The report highlights that further actions can address the identified challenges and accelerate the development of Hong Kong into a global green bond hub. Areas of development highlighted by survey respondents include insufficient public awareness, costs related to verification and certification procedures, and heterogenous standards. To advance on a greener future, a wide range of suggestions are proposed with the objectives of perfecting the green infrastructure in the local market and encouraging market participants to play a more active role. Efforts to raise public and investor awareness as well as effective incentive policies would be helpful. Apart from green bonds, other ESG products (such as sustainable bonds and green loans) are rising in popularity and these are also expected to play a more important role in the future to form a robust ecosystem for sustainable growth.
Keywords: Asia Pacific, Hong Kong, Banking, Securities, Green Bonds, Climate Change Risk, ESG, Sustainable Finance, HKIMR, HKMA
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
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