Green Taxonomy
The Hong Kong Monetary Authority (HKMA) published a discussion paper entitled “Prototype of a Green Classification Framework for Hong Kong” on May 30, 2023, seeking feedback on the development and adoption of a green taxonomy for Hong Kong. The HKMA aims to develop a green taxonomy that facilitates interoperability with other major taxonomies such as the Common Ground Taxonomy (CGT) and the taxonomies of Mainland China and the European Union (EU). The aim is to support Hong Kong’s role in linking green financial flows between Mainland China and the rest of the world.
Vision
The aim is to implement the green classification framework in the local market. This framework provides a standardised framework for classifying and labelling financial products and investments based on their environmental sustainability. This is to help investors make their decisions. Investors, issuers of financial products, and regulators should use the Green Classification Framework to their advantage. Developing the interoperability function of the proposed Hong Kong taxonomy is critical as the CGT is not a single taxonomy and some of the criteria in the taxonomies of Mainland China and the EU are only applicable within their respective jurisdictions. Accordingly, the challenge was to formulate a set of criteria for economic activities that are consistent with the ambitious criteria in the CGT and the taxonomies of Mainland China and the EU. The HKMA has engaged the Climate Bonds Initiative to assist it in developing the green taxonomy for Hong Kong.
However, it remains to be seen how the public will react to these measures and whether and to what extent they will be implemented. As of now, no concrete metrics have been made public.
