HKMA to require banks to meet Hong Kong’s 2030-2050 targets on carbon emissions All banks in Hong Kong will need to be net zero in terms of greenhouse gas emissions by 2030, the Hong Kong Monetary Authority (HKMA) said, while they must also ensure that their lendings to companies and projects reach the same target by 2050. The HKMA will also ensure that the Exchange Fund’s investment portfolio will be net-zero compliant by 2050 and said it would introduce more measures to promote the issuing of green bonds in the city. The HKMA unveiled these goals, which are part of its “Sustainable Finance Action Agenda”, on Monday. “Climate change is the defining challenge of our time,” said Eddie Yue Wai-man, the HKMA’s CEO. Yue said Hong Kong as an international financial centre has a responsibility to facilitate sustainable fund flows while “ensuring that banks manage the risks associated with net zero properly”. Sustainable finance, according to the World Bank, refers to the process of taking into account environmental, social and governance (ESG) factors when making investment decisions. Under the Paris climate accord, world leaders have committed to containing global warming at “well below” 2 degrees Celsius above pre-industrial levels, and to strive to keep it at 1.5 degrees. China expects to reach peak carbon emissions by the end of this decade and aims to be net zero in terms of emissions by 2060, the same year it wants to cut its use of fossil fuels to below 20 per cent of its total energy consumption. For its part, Hong Kong expects to achieve net-zero emissions ahead of 2050. Last week in his annual policy address, Hong Kong Chief Executive John Lee Ka-chiu unveiled a series of measures to bolster the city’s status as a global financial hub, including plans to enhance the green financing ecosystem. “The HKMA has taken the lead to encourage all its colleagues not to wear a tie” so air conditioners can be set to higher temperatures, said Arthur Yuen Kwok-hang, the HKMA’s deputy CEO. “The authority will issue guidelines and policies to help banks achieve the target date set by the agenda.” Yuen said banks will be required to cut carbon emissions by using energy saving cars, cutting paper usage and scheduling fewer overseas trips so they can be operationally net-zero compliant by 2030. Starting in 2030, all banks will need to report to the HKMA about how they plan to phase out lending to businesses with high carbon emissions, as well as how they will use their lending to help clients become net zero in terms of greenhouse gas emissions. The final goal is for all bank lending to be net-zero compliant by 2050. The HKMA also said it would ensure that the investment portfolio of the Exchange Fund would be net-zero compliant by 2050, according to Cheung Leong, the chief strategy officer at the authority’s Exchange Fund Investment Office. In 2013, the Exchange Fund invested in a wind turbine project in Europe, he said. And in 2017, it invested in solar energy projects in South America. In recent years, the HKMA has required its external fund managers to invest in stocks and bonds that comply with good ESG standards. “Our experience has shown that the returns of the ESG or green projects can also deliver a return matching with our other investments,” Cheung said. The HKMA’s sustainable agenda also contains measures to promote the issuance of green bonds, which are fixed-income instruments used to fund projects that have positive environmental benefits. By offering subsidies to issuers, the HKMA would like about a third of all bonds issued in Hong Kong to be green, up from 22 per cent at present, said Kenneth Hui, the authority’s executive director (external). “The goal is to develop Hong Kong into the go-to sustainable financial platform in the region,” Hui said. The total value of all green bonds issued in Hong Kong last year stood at US$30 billion, up sharply from US$6 billion in 2019. Around 470 debt instruments received subsidies under a green finance scheme, Hui said. The Hong Kong government issued US$28 billion worth of green bonds for 116 projects between 2018 and 2023, he added. https://www.scmp.com/business/article/3283260/hkma-require-banks-meet-hong-kongs-2030-2050-targets-carbon-emissions (ICE HONG KONG)

Fonte notizia: South China Morning Post