HKMA launches consultation in decarbonisation push

On Monday, the Hong Kong Monetary Authority (HKMA) initiated a public consultation to advance the development of the Hong Kong Taxonomy for Sustainable Finance, as the city strives to broaden the definition of green and transition activities. The purpose of the taxonomy, explained the HKMA, is to provide clear, transparent guidelines for identifying green and sustainable activities, thereby increasing capital flows while countering greenwashing concerns.

Phase 2B of the prototype incorporates 10 new economic activities, complementing the reclassification of certain Phase 2A activities. This revision increases the total number of activities from 25 to 39. Additionally, the updates introduce technical criteria for both green and transition measures, with a focus on enabling technologies such as battery manufacturing and recycling, as well as low-carbon technologies.

The updates also offer transition pathways for sectors that are difficult to decarbonize, including air transport and iron and steel.

Furthermore, the prototype refines the methodology for climate-change adaptation by adopting a process-based approach, considering the unique location-specific nature of such measures. Hong Kong's shoreline protection and flood management initiatives are highlighted as the initial areas of focus due to their relevance to the city's key climate risks.

The public consultation is set to run until October 7.