06/05/20

HONG KONG: Regulators Establish Green and Sustainable Finance Steering Group.

As published on regulationasia.com, Tuesday 5 May, 2020.

Initiated by the HKMA and SFC, the Steering Group will coordinate across other agencies and sectors to position Hong Kong as a global leader in green and sustainable finance.

The HKMA (Hong Kong Monetary Authority) and the SFC (Securities and Futures Commission) have initiated the establishment of a new cross-agency steering group for green and sustainable finance.

The ‘Green and Sustainable Finance Cross-Agency Steering Group’ is tasked with coordinating the management of climate and environmental risks for the financial sector, accelerating the growth of green and sustainable finance in Hong Kong, and supporting the government’s climate strategies.

This will include an examination of policy and regulatory issues, particularly those which may have a cross-sectoral impact, with a view to addressing these impacts through technical working groups and consultation with experts and stakeholders.

The Steering Group will also seek to facilitate policy direction and coordination to ensure Hong Kong has a cohesive and comprehensive green and sustainable finance strategy and is positioned to provide regional and global leadership.

The other members of the Steering Group include the Environment Bureau, the FSTB (Financial Services and the Treasury Bureau), HKEX (Hong Kong Exchanges and Clearing), the IA (Insurance Authority) and the MPFA (Mandatory Provident Fund Schemes Authority).

At an inaugural meeting on Tuesday (5 May), the Steering Group agreed to provide strategic direction, with a focus on regulatory policy and market development, to bolster Hong Kong’s position as a leading green and sustainable finance centre in Asia and globally, and facilitate cooperation across the region -including in the GBA (Greater Bay Area).

Two workstreams were also set up: the first to study and address cross-sectoral regulatory issues; and the second to coordinate cross-agency market development efforts.

“Climate change is a source of financial risk impacting the entire financial sector and is highly relevant to our mandate,” said HKMA chief executive and co-chair of the Steering Group, Eddie Yue. “The transition will prompt structural adjustments to the global economy, bringing both risks and opportunities.”

“As a premier international financial centre, Hong Kong can play a pivotal role in promoting sustainable development and powering the transition, especially in Asia.”

According to SFC chief Ashley Alder, the Steering Group will help to ensure that companies disclose the impact of climate change on their businesses and that asset managers integrate climate factors into their investment processes.

“This will enable investors to price financial assets accurately and identify those companies which have developed credible strategic responses to the environmental challenges they face,” he said.