Out-Law News | 11 Nov 2020 | 9:31 am | 1 min. read
The Hong Kong Monetary Authority (HKMA) has joined the Alliance for Green Commercial Banks by signing a new agreement with the International Finance Corporation (IFC).
The initiative aims to develop green commercial banks and encourage more green finance to address climate change. It also aims to encourage commercial banks in Asia to "adopt strategies and targets to become greener", statement said.
Being Hong Kong’s central banking institution, the HKMA is the first partner to work with IFC on the initiative and will serve as the hub for green finance among commercial banks in Asia.
The HKMA and IFC intent to bring together financial institutions, banking industry associations, research institutions, and innovative technology providers across Asia to develop, build, and boost the capacity for green finance and promote climate investments.
The HKMA's senior executive director Edmond Lau said, about $18 trillion in green and climate-related financing opportunities are expected to emerge in Asia in the next decade, according to a report from South China Morning Post.
IFC research evaluates that cities in emerging markets alone have the potential to attract more than $29 trillion in climate-related investments by 2030, its press release said.
John Yeap, an infrastructure expert at Pinsent Masons, the firm behind Out-Law, said, "Green financing will be increasingly important in the coming decade, driven by not just corporate level ESG agendas but also national carbon neutrality targets of major economies in the region. Given the need for significant further infrastructure development across the region, including for instance the Greater Bay Area initiative, Hong Kong is well placed to help embed green financing into all such developments. "
"Our ready access to relevant expertise, international debt and capital markets and of course a respected legal system all point towards the key role that Hong Kong is able to play in this regard, and HKMA’s partnering with this alliance reinforces this message."
"However, given that there is currently no universally understood standard for green eligibility, and given also the fact that elsewhere in the region have already sought to position themselves as Asia’s green financing hub, it will be in the interest of all stakeholders to ensure collaboration across the region so that the various initiatives amplify each other in seeking to achieve the common aim of a more sustainable environment for all."