HKMA Publishes Report on Green Bonds Market in Hong Kong
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
Featured Experts
Michael Denton, PhD, PE
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.
Related Articles
EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
EP Reaches Agreement on Corporate Sustainability Reporting Directive
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
PRA Consults on Model Risk Management Principles for Banks
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
EC Regulation Amends Standards for Calculating Credit Risk Adjustments
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
HKMA Announces Launch of Data Repository on Sustainable Finance
The Hong Kong Monetary Authority (HKMA) announced that the Green and Sustainable Finance (GSF) Cross-Agency Steering Group has launched the information and data repositories and outlined the progress made in advancing the development of green and sustainable finance in Hong Kong.
BIS Hub Updates Work Program for 2022, Announces New Projects
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
NGFS Report on Integration of G-Cubed Model into NGFS Scenarios
The Network for Greening the Financial System (NGFS) published a report that explores the feasibility of integrating the G-Cubed general equilibrium model into the NGFS suite of models.
US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
EIOPA Consults on Review of Securitization Framework in Solvency II
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
