Hong Kong weighs tougher climate finance disclosures for banks

Hong Kong's financial regulator is considering requiring banks to disclose more information about climate finance, as it finalizes its latest sustainable finance taxonomy guidelines. The Hong Kong Monetary Authority aims to gather feedback from banks on how they currently use the taxonomy through a survey in 2027, which will inform the implementation of the taxonomy in supervision, according to Executive Director for Banking Policy Donald Chen.

The updated taxonomy, released for public consultation earlier in September, includes six sectors with adaptation projects that address climate risks, such as shoreline protection and flood management. These sectors encompass energy, transportation, buildings, telecommunications, risk management, response, and water, and include activities such as automated grid controls, off-grid renewables, and batteries.

The taxonomy is intended to encourage private capital investment in climate-related projects in Hong Kong, as well as in mainland China and Southeast Asia. As of September 2025, about US$150 billion in labelled green debt has been issued by Hong Kong-based entities. Hong Kong currently requires financial firms to assess and manage climate risks, and some companies provide disclosures about climate-related financial impacts.

Standard Chartered and HSBC have begun implementing physical risk assessments for flood risk exposure in their loan portfolios. The Hong Kong Monetary Authority's taxonomy is expected to evolve over time as new activities are added and the list of eligible projects expands.