Hong Kong is growing as a green finance hub, with US$34 billion in debt issued, 200+ ESG funds approved, and plans to expand its taxonomy to transition projects.
Hong Kong is strengthening its role as a centre for green and sustainable finance, with officials pointing to the city’s ability to help industries reduce emissions as global climate efforts intensify, according to the South China Morning Post.
At the Hong Kong Green Finance Association Annual Forum on Monday, which coincided with the start of Hong Kong Green Week, Financial Secretary Paul Chan Mo-po said the city has the potential to become a hub for transition finance.
“While [transition finance] still represents a small fraction of the sustainable-finance market, it is gaining traction and offers considerable potential,” Chan said, referring to funding that helps companies move from high-carbon to low-carbon operations.
China is expected to spend about US$820 billion on energy transition this year, nearly 40% of the global total. Across Asia-Pacific, investment in transition last year topped US$1 trillion for the first time – more than twice the amount in the Americas, Chan noted.
Wealthy investors are also showing strong interest in transition projects, creating room for “innovative, climate-focused financial products that cater to market appetite,” he said.
Hong Kong’s own sustainable debt issuance surpassed US$34 billion in the first half of this year, up 15% from the same period a year ago. The Securities and Futures Commission has authorised more than 200 ESG-focused funds – a 51% increase over three years – with assets under management rising 18% to more than HK$1.1 trillion (US$141 billion). In 2024 alone, the city issued more than US$80 billion in sustainable debt, with green bonds making up about 45% of the region’s total.
On the regulatory side, the Hong Kong Monetary Authority launched a public consultation on Monday to expand the city’s sustainable-finance taxonomy to cover transition finance. The consultation will run until October 8.
The taxonomy, introduced last year, already aligns with frameworks in mainland China and the European Union. The proposed expansion would extend to sectors like manufacturing and information and communications technology, add new economic activities, and include climate adaptation as an additional environmental goal. “The are pivotal to scaling up capital flows,” Chan said. “To accelerate the green transition, taking a broader perspective [and] setting and holding international standards are important.”
Chan also highlighted Hong Kong’s growing green technology sector, noting that more than 250 companies are operating in local start-up incubators, working on everything from smart grids to carbon capture. Some of these firms are expanding into mainland China and overseas.
To build momentum, the government is working to attract more green enterprises from abroad, helping them link with universities, supply chains, and markets in the Greater Bay Area, Asia, and beyond.
Hong Kong is aiming to cut carbon emissions by half by 2035 and reach carbon neutrality by 2050. Progress has already been made in power generation, with zero-carbon electricity expected to account for 45% of the city’s fuel mix by 2026, up from 25%, Chan said.
“Hong Kong is uniquely positioned to channel capital and expertise to support decarbonisation in heavy industries, renewable and generation, not only in China, but also facilitating export of these technologies to other markets to align with net zero,” said Doris Wong, head of global corporates in Hong Kong with HSBC’s corporate and institutional banking unit.
The government is already the largest issuer of green bonds in the region, helping to expand the corporate green bond market, Wong said.
HSBC reported completing US$54 billion in sustainable-finance transactions worldwide in the first half of this year, a 19% increase from the same period in 2023.
(Photo by Chaojie Ni)
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