Speech by SFST at Hong Kong Quality Assurance Agency Green Finance Certification Scheme Launching Ceremony cum Seminar

Hong Kong (HKSAR) -      Following is the speech by the Secretary for Financial Services and the Treasury, Mr James Lau, at the Hong Kong Quality Assurance Agency (HKQAA) Green Finance Certification Scheme Launching Ceremony cum Seminar today (March 12):

Dr Lo (Chairman of the HKQAA, Dr Lo Wai-kwok), Professor Shi (Vice-Director General of the International Institute of Green Finance of the Central University of Finance, Professor Shi Yingzhe), Stephen (Deputy Executive Director and Head of the Public Policy Institute of the Our Hong Kong Foundation, Mr Stephen Wong), K S (Secretary for the Environment, Mr Wong Kam-sing), ladies and gentlemen,
     Today it is very special in that we have this particular launching ceremony and seminar for the Hong Kong Quality Assurance Agency's Green Finance Certification Scheme. The Government welcomes this new initiative of the HKQAA. In fact, we encouraged them to develop this certification scheme with reference to a number of national and international standards.

They provide third-party conformity assessments for issuers on their green debt instruments, covering both pre-issuance validation and post-issuance certification.
     In fact, the scheme comes at a particularly timely moment for Hong Kong as green bonds, sustainable finance and responsible investing are increasingly gaining popularity and market traction.
     In recent years, we have seen a boom in responsible investing, with major institutional investors such as sovereign wealth funds, pension funds and insurance companies deciding to integrate environmental, social and governance considerations into their investment portfolios. Studies suggest that there are now US$23 trillion of assets globally that are professionally managed under responsible investment strategies.
     Particularly relevant to Hong Kong is the fact that China has emerged as a leader and key player in global green finance. Under its G20 Presidency in 2016, China initiated work on green finance and launched the G20 Green Finance Study Group, co-chaired by the People's Bank of China and the Bank of England.

The G20 Leaders' meeting in Hangzhou in September 2016 issued a communique recognising for the first time the importance of green finance and this played a critical role in bringing the concept of green finance into the mainstream.

     Of course, the development of green industries is also proposed in China's National 13th Five-Year Plan, which covers the construction of a green financial system, the development of green loans and green bonds, and the establishment of green development funds. Mainland China was the largest green bond issuer in the world in 2016, with the total issuance amount reaching US$23 billion, over one-quarter of the total global issuance. In 2017, Mainland China's green bond issuance also totalled around US$23 billion, similar to 2016.
     Against this national and global backdrop, our Government is fully committed to developing Hong Kong as a premier green finance hub in Asia.

From an environmental angle, this will support sustainable development and combat climate change. From an economic angle, this will promote Hong Kong as a leading financing platform for local, Mainland and overseas enterprises which seek to raise funds through green bonds. We are delighted to see that a number of enterprises, private and public, already issued green bonds in Hong Kong over the past year, and I am sure that even more companies will be making use of Hong Kong's platform and our capital markets for financing their green projects.

     Indeed, in the Budget announced on February 28, the Financial Secretary has proposed a number of measures to promote Hong Kong as a green finance hub.

First, there is the Green Bond Grant Scheme that will subsidise qualified green bond issuers using HKQAA's certification scheme. Secondly, the Government also plans to launch a green bond issuance programme with a borrowing ceiling of HK$100 billion in order to finance green projects under the public works programme of the Government. We hope this government green bond will help to provide benchmark pricing for the market and stimulate market development.

     Ladies and gentlemen, the launching ceremony today marks a milestone in the development of Hong Kong as a green finance hub; I am sure the journey ahead will be even more exciting and I invite you to board this high speed train and contribute to sustainable development for the benefit of our future generations.

Thank you.

Published on: 2018-03-12

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