Hong Kong Develops Strategic Agenda to Lead in Sustainable Finance

On October 21, 2024, the Hong Kong Monetary Authority (HKMA) released a comprehensive Sustainable Finance Action Agenda, setting ambitious climate targets for banks, with additional goals for the Exchange Fund and Hong Kong's financial market development. For banks, the agenda mandates net-zero targets with clear timelines: operational emissions must reach net zero by 2030 while financed emissions have a 2050 deadline. To support this transition, HKMA will introduce climate risk disclosure requirements aligned with international standards, provide tools and guidance for measuring and managing transition risks and implement a "comply or explain" approach for transition plans starting 2030. The agenda extends beyond regulation through four strategic pillars:

· Banking for net zero: Supporting banks' transition to sustainable practices;

· Investing in a sustainable future: Greening the Exchange Fund portfolio through renewable energy and infrastructure investments;

· Financing net zero: Creating incentives for green bonds and sustainable financing; and

· Making sustainability inclusive: Improving data accessibility and climate-related skills development.