SFST's speech at Gong-Strike Ceremony for Launch of Hong Kong's New International Carbon Marketplace - Core Climate (English only)
Laura (Chairman of Hong Kong Exchanges and Clearing Limited (HKEX), Mrs Laura Cha), Nicolas (Chief Executive Officer of HKEX, Mr Nicolas Aguzin), ladies and gentlemen,
Good afternoon. It gives me great pleasure to join you today for the launch of Core Climate.
This latest initiative from HKEX marks a milestone in Hong Kong's emergence as an international carbon market. Core Climate inspires confidence. It underlines the indelible progress we are making in our determination to become Asia's green finance centre. And that, ladies and gentlemen, is worth celebrating.
Core Climate, which opened for business late last month, enables the transparent trading of voluntary carbon credits and instruments in Hong Kong, and Mainland China, throughout Asia and well beyond. It connects capital with climate-related products and opportunities.
Hong Kong is all about creating connections. Thanks to "one country, two systems", we connect our nation and the world at large, creating opportunities for all concerned.
HKEX, the world's seventh-largest stock market, is central to our longstanding position as an international finance and risk-management centre, a regulatory leader in adopting international standards, a mobiliser of capital to the Mainland and a regional certification hub.
HKEX plays a key role in supporting Hong Kong's rise as a green, low-carbon financial market. That includes pursuing co-operation with financial institutions in Guangzhou and strengthening ESG (environmental, social and governance) disclosure among listed companies.
Carbon-market opportunities, after all, are fast-emerging internationally, as countries and regions inevitably commit to a green, low-emission and climate-resilient economy.
In 2021, global carbon-credit turnover in voluntary markets hit US$2 billion, with compliance markets soaring, to US$851 billion, that same year.
With leadership from HKEX and the rest of our Green and Sustainable Finance Cross-Agency Steering Group, Hong Kong's commitment to green and sustainable finance is clear and compelling.
Allow me, for the next few minutes, to highlight that progress, turning, first, to green bonds.
Since May 2019, we have issued Government green bonds totalling nearly US$10 billion. That includes the HK$20 billion inaugural retail green bond issued in May. It was the world's largest retail green bond issuance.
The bonds, of course, are listed on the Hong Kong Stock Exchange. And we plan to expand government green bond issuance by more than five times over the five years that began in fiscal 2021-22.
We are also promoting green-financing activities in Hong Kong and working assiduously to attract financial and professional service providers. That includes external reviewers looking to set up or expand in Hong Kong. The goal is to create a mature, well-rounded green-finance market.
To that end, we launched the Green and Sustainable Finance Grant Scheme a year ago in May. It provides subsidies for bond issuers and loan borrowers to cover their expenses on bond issuance and external review services.
In March, we cut the minimum loan size in half - from HK$200 million to HK$100 million - for subsidies covering external review costs. We want to make it as easy as possible for companies to get green financing.
The scheme has been well received by the industry. Since the programme's launch, we have granted close to HK$150 million to more than 170 green and sustainable debt instruments issued in Hong Kong.
To support the green and sustainable finance market's continuing expansion, we will mandate Task Force on Climate-related Financial Disclosures (TCFD) across relevant sectors - and do so no later than 2025.
The Securities and Futures Commission and HKEX have formed a joint working group. It's putting together proposals for a sustainability reporting standard aligned with the global baseline under development, as well as TCFD recommendations.
We will also look into creating a local green classification framework - one that readily works with the Common Ground Taxonomy, Mainland and EU arrangements.
This will align Hong Kong's regulatory standards with international best practice.
ESG talent is also a government priority. Capacity building is crucial for the development of green and sustainable finance and our evolution to carbon neutrality.
To that end, the Steering Group's Centre for Green and Sustainable Finance last year launched a series of initiatives for the financial industry. They include training information, internship opportunities and data sources, and they're designed to build capacity, while enhancing talent and data resources.
Last month, the Steering Group also introduced the Sustainable Finance Internship Initiative, creating more opportunities for Hong Kong students.
And, as the Financial Secretary announced in the Budget, the Government has earmarked HK$200 million for a three-year pilot scheme. It will subsidise the training and acquisition of professional qualifications in sustainable finance.
The scheme, which is now accepting applications, is expected to launch in mid-December.
I look forward to your support of the programme, your continuing help in building Hong Kong's competitiveness, and capacity, in green finance.
My congratulations to HKEX, which designed the Core Climate platform and products and developed the trading protocol. A dedicated team is well in place, running everything from legal and regulatory analysis to product development, client engagement, customer services, technical support and a whole lot more. In short, they're busy helping to build an international carbon market right here in Hong Kong.
My thanks, as well, to the other members of the Cross-Agency Steering Group, which worked closely with HKEX in bringing Core Climate to bright life.
"Core", of course, can mean a part that's central, essential, to the workings of something. I have no doubt that Core Climate will become a central, essential aspect of Hong Kong's green and sustainable finance and our future as a city we are proud to call home.
Ends/Thursday, November 24, 2022
Issued at HKT 17:28
Issued at HKT 17:28