Hong Kong lagging behind other Asian green finance hubs, report finds

April 2, 2024|Written by Katy Lee

Hong Kong is falling behind in its quest to become Asia’s top green finance hub, according to a new report which urges the city’s regulators to implement anti-greenwashing regulations.

The joint study by Greenpeace and CarbonCare InnoLab, an environmental NGO in Hong Kong, found the regulatory landscape of rival Asian hubs such as Singapore leave companies with fewer options when it comes to continuing with polluting investments in the years ahead.

“The government boasts that Hong Kong is a green finance hub in Asia, but it lacks comprehensive policies and measures to tackle greenwashing,” said Tom Ng, a Greenpeace campaigner for east Asia.

“It’s like navigating the sea without a map, which can easily lead us astray and weaken our response to the climate crisis.”

The study’s authors reviewed the policies and guidelines put in place by both the Hong Kong Monetary Authority and the Hong Kong Securities and Future Commission, as well as ESG disclosure requirements for listed companies and climate risk reporting.

They noted that Hong Kong lacks a high-level strategic plan for greening the financial system, unlike Singapore, Shanghai, Shenzhen or Tokyo. Instead, the patchwork of guidelines and policies in Hong Kong was described as “piecemeal”.

The lack of restrictions on direct financing for fossil fuels also places Hong Kong behind Singapore, which has already committed to phasing it out while also restricting direct financing for coal-fired power stations.

And there are no specific regulations in Hong Kong to combat greenwashing, unlike Singapore, Tokyo and Seoul, which have either strengthened companies’ reporting requirements or are in the process of enacting anti-greenwashing laws.

The report urged the semi-autonomous Chinese region to instigate a roadmap for reforms that would better align the city with the Paris Agreement, as well as a specialised mechanism to prevent greenwashing.

“Shifting the approach from ad-hoc green finance initiatives to an integrated strategy led from the top would bring much-needed coordination and urgency,” it said.

This page was last updated April 3, 2024

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