The Hong Kong Monetary Authority released a Sustainable Development Report for 2023, fully supporting the industry in providing financing for low-carbon transformation.

Recently, the Hong Kong Monetary Authority ("HKMA") released the "2023 Sustainable Development Report" to showcase the various specific measures and work launched by the HKMA over the past year. As a regulatory body for the banking industry, a market promoter, and a responsible investor, the HKMA has always made significant efforts towards the sustainable development agenda. The ESG report shows that the HKMA has established a robust and transparent sustainable development governance framework with clear accountability arrangements, including the Foreign Exchange Fund Advisory Committee and related specialized committees, the Green and Sustainable Development Supervisory Committee, and the Green and Sustainable Finance Inter-Agency Supervision Group. This governance framework leads the HKMA's relevant strategies and policies formulation, supervises the execution of relevant measures, and ensures that sustainability factors are incorporated into the HKMA's operations and working methods. Building a climate-resilient financial system to support low-carbon transition As a regulatory body for the banking industry, the HKMA has been actively working to build banks' capabilities to address and manage climate risks and accelerate their efforts to support the transition to a low-carbon economic model. Among these initiatives, the HKMA has developed a Green Classification Framework to assist banks and other financial institutions in identifying environmentally sustainable activities, thereby aligning their business decisions with global climate goals. In May 2023, the HKMA launched a prototype of the Green Classification Framework for consultation, and is currently optimizing the framework based on feedback collected during the consultation period. Furthermore, as the need for higher-quality and internationally comparable sustainable disclosure information grows, the HKMA is working with other regulatory bodies to develop a clear roadmap for Hong Kong, adopting the disclosure guidelines introduced by the International Sustainability Standards Board in June 2023, which form a comprehensive global standard for sustainable reporting. Strengthening the construction of a sustainable financial ecosystem and responsible investment Following the successful issuance of the first batch of tokenized bonds in February 2023, the HKMA assisted the government in issuing the second batch of tokenized green bonds in February 2024. This issuance achieved new breakthroughs in various areas, including expanding investor participation through existing market infrastructure and simplifying issuance procedures through digital native forms. At the same time, the HKMA has actively introduced various measures to enhance the vitality and competitiveness of Hong Kong's sustainable financial ecosystem. This includes work in areas such as skills training, improving data, green financial technology, and transitioning finance. Particularly in terms of talent training, in 2023, the HKMA introduced a new "Green and Sustainable Finance" unit under the banking professional qualifications framework to provide bank employees with systematic courses to enhance their understanding and expertise in green and sustainable finance. In addition to long-term collaborations with international financial institutions on the "Green Business Banking Alliance," the HKMA's Infrastructure Financing Facilitation Office joined the "Sustainable Investment Capacity Building Alliance" and the "Green Development Investment and Financing Partnership" in 2023 as founding members; earlier in 2024, it helped organize the first "Hong Kong Green Week," attracting over 1,600 guests from nearly 30 regions, including top decision-makers in the global business and finance sectors, to discuss expanding climate financing schemes in the region, leading to new cooperative relationships. The HKMA's responsible investment maintained positive momentum in 2023. In the public market, the HKMA launched a new actively managed global equity portfolio with a focus on sustainability and climate transition, managed by external investment managers, and expanded the use of customized low-carbon stock indices to another asset portfolio managed by external investment managers. Furthermore, the HKMA prioritized investments in green, socially responsible, and sustainable development bonds that exceeded investment benchmarks; in the private market, the HKMA built a resilient long-term growth portfolio to capture investment opportunities expected to benefit from long-term economic development trends such as climate and energy transition. For instance, the HKMA invested in two Asia-focused transformation investment funds during the year, demonstrating its commitment to addressing Asia's climate transition needs. Focusing on corporate sustainability and social responsibility In terms of environmental initiatives, the HKMA implements carbon reduction strategies in its daily operations, including operating green buildings and data centers, promoting green transportation, adopting energy-saving measures, digital tools and more environmentally friendly working methods, waste reduction, and fostering a culture of sustainable development. In 2023, the HKMA's general waste and recyclable waste density per person was 63.35 kilograms, representing a significant 52.98% reduction from 2022. The total emissions density per person from Scope 1 and Scope 2 greenhouse gas emissions from purchased fuel and electricity was 1.48 tCO2e, reflecting an 11.38% reduction from 2022. Furthermore, the HKMA continues to introduce more environmentally friendly operating initiatives for the broader community, including channels for banks to submit electronic documents and contacts, as well as electronic payment and coin collection programs for public use. Regarding employees, the HKMA strives to create a sustainable, collaborative, and inclusive work environment, providing benefits such as medical, dental, and healthcare for employees and their eligible family members. The HKMA values diversity in the workforce, with a balanced gender ratio among employees and representation from different age groups. As of January 2024, male employees at the HKMA accounted for 43% of the workforce, while female employees accounted for 57%, with female employees at the assistant vice president level or above representing 28.6%. In terms of social responsibility, the HKMA encourages employees to participate in volunteer and charity activities; considers using social enterprises in procurement, purchasing goods and services from suppliers that uphold sustainable values; promotes financial consumer education through various media channels, and collaborates with the banking industry to ensure equitable access to basic banking services for all sectors of society. HKMA Chief Executive Eddie Yue stated that economies worldwide are moving towards a more sustainable future, which is expected to bring significant changes to financing activities and asset allocation. The HKMA will fully support the industry in providing financing for low-carbon transitions, continue to act as a responsible investor and sustainable institution, lead by example, and collaborate with like-minded partners to advance this crucial global agenda. (ESG Researcher Deng Shixia, Link)