The Hong Kong Monetary Authority (HKMA) has launched its Sustainable Finance Action Agenda.

This outlines the regulator’s plan to promote sustainable development in Hong Kong and the region.

The agenda emphasizes net-zero targets, transparency, sustainable investing, and inclusivity.

Banks are expected to strive for net-zero emissions in their operations by 2030 and in financed emissions by 2050.

From 2030, banks will also be required to submit robust, actionable, and up-to-date Paris-aligned transition plans on a “comply or explain” basis.

To support this, the HKMA plans to issue guidance, including a new Supervisory Policy Manual by the end of 2024, focusing on transition planning.

The agenda outlines eight goals across four areas. In banking for net zero, all banks are encouraged to achieve net-zero emissions and enhance transparency on climate-related risks.

For sustainable investing, the HKMA aims for net-zero emissions in the Exchange Fund’s Investment Portfolio by 2050 and seeks to support sustainability transitions through investments.

Financing net zero focuses on positioning Hong Kong as the go-to platform for sustainable finance and driving innovation in the sector.

Lastly, in making sustainability inclusive, the HKMA emphasizes high-quality disclosures and addressing talent gaps, including launching a Professional Level module on Green and Sustainable Finance under the Enhanced Competency Framework within 2024.

To boost transparency, the HKMA plans to introduce measures aligned with international standards, including the Pillar 3 disclosure framework and IFRS Sustainability Disclosure Standards.

The HKMA will work with the industry to implement these goals and refine the agenda based on market feedback.

Eddie Yue, Chief Executive of the HKMA, said,

“Climate change is the defining challenge of our time. Hong Kong, as an International Financial Centre and Asia’s sustainable finance hub, has the duty and capability to up our game in facilitating sustainable fund flows and ensuring that banks manage the risks associated with the net zero transition properly.

The Action Agenda sets out the HKMA’s vision in this regard, including where we are heading, when we endeavour to reach various milestones, and how we expect the industry to join hands with us in the sustainable journey.”