The Green and Sustainable Finance Cross-Agency Steering Group has outlined its key priorities for 2025 as part of its efforts to strengthen Hong Kong’s position as a hub for sustainable finance.
Following its meeting on 6 February, the Steering Group—which was set up by the SFC and the Hong Kong Monetary Authority (HKMA) and includes members such as the Insurance Authority (IA)—outlined its plans this year to: advance sustainability disclosures, expand transition finance initiatives, and leverage data and technology to support sustainable financing.
IFRS S1 and S2
A primary focus for 2025 will be the development of a comprehensive sustainability disclosure framework.
Following the publication of the “Roadmap on Sustainability Disclosure in Hong Kong”, the Steering Group now aims to facilitate the implementation of the International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards (ISSB Standards).
The IFRS S1 and S2 standards serve as frameworks for consistent global measures to disclose greenhouse gas emissions, allowing investors to compare emissions across various industries and regions. Speaking to (Re)in Asia, industry experts warned their implementation may face challenges due to data quality issues and differing timelines across Asia Pacific.
This may affect insurers that rely on investee firms for correct reporting, particularly concerning the complexity of Scope III emissions. These emissions include businesses that insurers underwrite or those within their supply chain. Experts also noted data standardisation as a concern.
Hong Kong’s Green Finance Steering Group says that it plans to collaborate with industry stakeholders to provide technical guidance on sustainability reporting, establish a sustainability assurance framework, and deliver capacity-building initiatives.
Transition finance, data and technology
The Group is also working with the industry to expand the Hong Kong Taxonomy for Sustainable Finance to include transition finance elements and additional sustainable activities.
It is developing operational guidance for transition finance and will establish a “Transition Finance Knowledge Hub” on its website. It also reaffirmed its commitment to developing Hong Kong as a carbon trading hub for the Asia-Pacific region, in line with carbon market developments discussed at COP29.
The Steering Group also announced that it will be advancing efforts to harness data and technology for sustainability reporting and green finance. It said it is working with the industry to publish the “Hong Kong Green Fintech Map” in the first half of 2025, highlighting fintech solutions that facilitate sustainable capital mobilisation.
Enhancements are planned for the free public utility data tools available on its website, including greenhouse gas emissions calculators and a climate risk questionnaire for small and medium-sized enterprises.
The Green and Sustainable Finance Cross-Agency Steering Group was set up by the SFC and HKMA in May 2020. Along with the Insurance Authority, the group also includes the Accounting and Financial Reporting Council (AFRC), Environment and Ecology Bureau, Financial Services and the Treasury Bureau (FSTB), Hong Kong Exchanges and Clearing Limited, the Mandatory Provident Fund Schemes Authority (MPFA).
