A GREENER FINANCIAL SYSTEM

Promoting a green economy is an important issue for the world, Financial Secretary Paul Chan says, adding that harnessing technological innovation, finance, commerce and manpower, could drive economic transformation and sustainable development, generate demand and create strong impetus for growth.

The whole industry is growing rapidly, but the formation of a leading green technology and finance cluster has yet to be seen around the world, the financial chief noted.

As he delivered his 2023-2024 Budget, Mr Chan noted Hong Kong has an edge when it comes to establishing itself as an international green technology and financial centre. Innovation and Technology development over the years has pooled together a number of green technology enterprises and talent. The Government has also taken the lead in promoting the application of green technology, including setting up the Green Tech Fund. He added the city is a leader and a first-mover in green finance and innovation.

Last week, Hong Kong successfully issued HK$800 million worth of a tokenised green bond, the first of its kind issued by a government globally. This has accentuated the city's capacity in providing a flexible and favourable legal and regulatory environment for innovative forms of bond issuance. As for the US$5.75 billion equivalent of government green bonds denominated in US dollar, euro and renminbi issued last month, it was the largest environmental, social and governance bond issuance in Asia.

To help promote the adoption of green financing by local enterprises, Mr Chan said grants have been approved for more than 200 related debt instruments issued in Hong Kong since the launch of the Green & Sustainable Finance Grant Scheme in 2021, involving a total underlying debt issuance of nearly US$70 billion. Furthermore, the Financial Secretary noted that the launch of Core Climate by the Hong Kong Exchanges & Clearing last October, for the trading of international voluntary carbon credits, signifies a critical step forward in the development of carbon marketplace in Hong Kong.

Mr Chan urged the city to seize the opportunities brought by the country's dual carbon strategies while leveraging its strengths under "one country, two systems" and as an international financial centre to accelerate the development of Hong Kong into an international centre for green technology and finance.

He said Hong Kong would proceed in five directions, namely:

(a) building a green technology ecosystem to attract top-notch enterprises or startups, encourage efficient interaction among industry, academia and research sectors to commercialise research and development outcomes, and boost the demand for green technology through policy support;

(b) green finance application and innovation: facilitating green projects to obtain capital more conveniently and flexibly through financial innovations apart from traditional financing channels;

(c) green certification and alignment with international standards;

(d) training for talent; and

(e) enhancing the exchange and co-operation with the Guangdong-Hong Kong-Macao Greater Bay Area and international markets.

The Financial Secretary also promised to set up a Green Technology & Finance Development Committee, inviting industry representatives from green technology, green finance and green standard certification to assist in the formulation of an action agenda to turn Hong Kong into an international green technology and finance centre. To this end, the Government will organise an International GreenTech Week at the end of the year to bring together representatives, enterprises and investors from the green technology industries around the world.

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