Beyond Climate Change

Karen Ho, Green Finance Advisor of Friends of the Earth (HK)

The Stock Exchange of Hong Kong Limited (HKEX) just published last Friday its Consultation Paper “Review of the Environmental, Social and Governance (ESG) Reporting Guide and related Listing Rules”.

One of the key focus of its consultation paper is climate change. HKEX proposed to require disclosure of policies on measures to identify and mitigate the significant climate-related issues which have impacted, and those which may impact the issuers, and the action taken to manage them. It proposed to revise the Environmental KPIs to require disclosure on a description on target set regarding emissions, energy use and water efficiency, waste reductions etc and steps taken to achieve them. It also proposed to require disclosure of Greenhouse Gas Scope 1 and Scope 2 emissions. All of disclosure mentioned are subject to “comply or explain”.

Better Disclosure means Better Market Efficiency

As we discussed in our blog last week, HKSAR Government is catching up on Green Finance and we are pleased to see that HKEX is seeking to strengthen its ESG rules. Whilst the Task Force on Climate-related financial disclosure (TCFD) Recommendations focus on material risks and opportunities from climate change perspectives, HKEX’s Guide applies more broadly across all environmental and social areas.

It is clear that climate change has already begun to affect global business, with extreme weather, threatening company assets and supply chains. As the environment evolves, companies that improve their energy efficiency and create new products and services will survive and companies that are slow to change will struggle.

Investors rely on ESG data to identify which companies may be best positioned to succeed in a sustainable world. FoE welcomes HKEX’s commitment in strengthening disclosure on ESG and climate-related information as it would help to drive better market efficiency. 

Green of Green – are you ready?

Si Ling Wong, Green Finance Advisor of Friends of the Earth (HK)

The theme of this Blog is “Green Finance”. So what is Green Finance actually? One could google and get a very detailed definition from the website. My simple interpretation is “Responsible Investment”.

When we talk about finance or investment, the first thing that comes into mind would be money making – this is very true and fair. Everyone works to earn and support living and if an investment is not going to bring any benefit, who will be doing it?

That’s why we may need more incentive/ pressure from the government. Hong Kong has been a bit behind our peers in this area but the government is trying to catch-up. Starting from 2017, listed companies are required to follow the comply-or-explain obligations from the Hong Kong Stock Exchange in making their Environment, Social and Governance (“ESG”) reporting. The HKSAR Government announced the launch of the Green Bond Grant Scheme in June 2018 to subsidize eligible green bond issuers in obtaining certification under the Green Finance Certification Scheme established by the Hong Kong Quality Assurance Agency. The Securities and Futures Commission (“SFC”) issued a circular to provide guidance to management companies of SFC-authorized green or ESG funds on enhanced disclosures last month. A roadshow for the HKSAR Government’s first green bond under its HK$100 billion green bond program was also kicked-off last Tuesday.

More information on the latest HKSAR government’s green initiatives could be read here: https://www.hkma.gov.hk/eng/key-information/press-releases/2019/20190507-4.shtml

While the government is picking up the pace, general public could also contribute via “Responsible Investment” – buying shares/ bonds issued by companies that pay effort in managing ESG, allocating assets into funds that incorporate ESG in their investment decision-making process, etc. No big money is needed – every penny counts.

One last reminder: watch out for “Greenwashing”. Some corporates might use “green” deceptively just to promote their products/ brands. It will always be good to take a closer look at these “green” labels to avoid being fooled and dumping money into something actually evil and not sustainable.

Friends of the Earth (HK)’s Response to the HKMA’s Measures on Green Finance / 香港地球之友回應金管局的綠色金融措施

Hong Kong is the leading asset management centre in Asia. FoE (HK) is pleased to see that HKMA will adopt a principle that priority can be given to Green investments. The government should demonstrate its green finance leadership by not only investing in green projects but also divesting from fossil fuels, and also encourage asset owners and investors to do so. Over 1,000 institutions with almost USD $8 trillion have committed to divest in fossil fuels.

The Hong Kong Monetary Authority (HKMA) today unveiled three sets of measures to support and promote Hong Kong’s green finance development. Climate change is universally regarded as the biggest threat to humanity. Friends of the Earth (HK) [“FoE (HK)”] lauds these measures and believes that they will help alleviate climate change.

Hong Kong is one of the top three international finance centres. However, the city ranks poorly compared to its traditional peers and even neighbouring cities on green finance, being placed 31st on the Global Green Finance Index. FoE (HK) welcomes the establishment of the Centre for Green Finance (CGF) under the HKMA Infrastructure Financing Facilitation Office (IFFO) to strengthen our position as a global green finance hub. 

To promote Green Finance in Hong Kong, FoE (HK) launched a “Green Finance Blog” on Earth Day 2019 (https://www.foe.org.hk/greenfinanceblog/). FoE(HK) will also announce our Green Finance Roadmap for Hong Kong on the World Environment Day, 5 June 2019. 

香港金融管理局 (金管局)今日公布三項措施以支持及推動香港綠色金融發展。氣候變化已被全球公認為對人類最大的威脅,香港地球之友歡迎相關措施並認為有助緩減氣候變化。

香港是亞洲領先的資產管理市場,本會樂見金管局優先考慮綠色投資。政府除了投資綠色項目,同時應向化石燃料撤資,並鼓勵其他資產擁有人及投資者跟隨,以展示出綠色金融領導地位。現時全球已有擁有約8萬億美元資產的超過1,000個機構承諾向化石燃料撤資。

香港是全球三大國際金融中心之一,可惜在全球綠色金融指數(Global Green Finance Index)只排行31名,綠色金融發展不敵傳統金融中心以及鄰近城市。本會歡迎在金管局基建融資促進辦公室下成立綠色金融中心,以鞏固香港綠色金融中心的地位。

為了推動綠色金融發展,香港地球之友在2019年世界地球日推出綠色金融網誌(https://www.foe.org.hk/greenfinanceblog/) ,並會在2019年6月5日世界環境日宣布本會提出的香港綠色金融路線圖。

Message from Chairperson Green Finance Blog Launch

Message from Chairperson Green Finance Blog Launch / 主席的話 啟動綠色金融網誌

Mei Ng – Chairperson of Friends of the Earth (HK) / 吳方笑薇 – 香港地球之友主席

The greatest threat to our planet is the belief that you can only do little.

One Note, one Vote, one Share, one Care, everyone can make a world of difference with the dollar note we spend, the vote we cast, the share we buy and the care we commit for the planetary health that we all depend upon for our common existence and that of our future generations.

In a flatter, hotter, bitter and litter world, we are being naïve if we think we can achieve a sustainable future without harnessing the best of the corporate world to these ends.

Green Finance

If economics is somehow to blame for environmental problems, shouldn’t that means that the cure for those problems must also lie in the economy?

Can “enlightened accounting” catalyze revaluation of true long-term value of natural systems to become “common currency” for sustainable growth?

Can “enlightened investment “ catalyze paradigm shift for reappraisal of “Natural Capitalism”?

Can Green Finance & Green Economy catalyze the adoption of Green GDP?

Green manufacturing, green farming, green building, green transport, green industry, green technology, green consumption, green services bring social, environmental and health benefits to ensure sustainable wellbeing?

No more fossil fools. No more carbon debt. Finance policy-makers and finance sector practitioners, stakeholders and investors can play an important role by divesting in fossil fuel to reduce carbon emission and to adopt green and responsible investing to promote renewable energy and green technology.

Global trends, research, analysis, forecasts and interests in green and responsible investing are growing. Over 1,000 institutions with almost USD $8 trillion have committed to divest in fossil fuels.

Hong Kong needs to catch up

Hong Kong is a global financial hub and a late-comer in promoting Green Finance, lagging behind London, Shanghai, Tokyo, Singapore and Korea.

Hong Kong needs to catch up to assume climate responsibility and green finance leadership to gain back top spot in the Global Green Finance Index (GGFI).

FoE Green Finance Blog on Earth Day

To celebrate Earth Day, Friends of the Earth(HK) launched a “Green Finance Blog” on its website to harness collective wisdom to catalyse Hong Kong policy makers and asset managers’ interest and commitment to adopt green finance and responsible investing.

Friends of the Earth (HK) believes that each one of us in our small ways and examples can generate positive changes to save Planet Earth and our common future.

Visit the Green Finance Blog on
https://www.foe.org.hk/greenfinanceblog/ .

對於地球最大的威脅,正在於我們相信,能夠改變的只是微乎其微。

鈔票、選票、股票、飯票,四票就在你手!每個人都可以通過我們的決定改變地球,包括我們如何消費、如何投票、如何投資股票市場、如何對地球的健康作出關注的承諾,我們以至未來新一代的存亡正繫於此。

我們生活在一個更平坦、更炎熱、更痛苦並充滿垃圾的世界,如果我們仍相信不用商界精英的參與亦可以達至一個可持續的未來,未免太天真了!

綠色金融

當大家都將環境問題歸咎於經濟時,為何大家在考慮補救方法時不向經濟方面入手?

「開明的會計學」能催化人們重新評估自然生態系統的真正長遠價值,從而成為可持續增長的「共同貨幣」嗎?

「開明的投資」能催化重新評估「生態資本主義」的範式轉變嗎?

綠色金融和綠色經濟能催化「綠色國內生產總值」的接受與應用程度嗎?

綠色生產、綠色農業、綠色建築、綠色交通、綠色產業、綠色技術、綠色消費與綠色服務,能帶來社會、環境和健康效益從而促成可持續福祉嗎?

不應再有愚昧的化石!不應再有碳債務!財務政策制定者、金融業從業人員、持分者以及投資者可以在當中扮演重要的角色,包括通過撤離化石燃料投資能減少碳排放,並採用綠色和負責任的投資來推動可再生能源和綠色技術。

綠色和負責任投資在全球的趨勢、研究、分析、預測和興趣都正在增長中。超過1,000家擁有近8萬億美元的機構已承諾向化石燃料撤資。

香港必須從後趕上

香港是全球金融中心,可惜在推動綠色金融方面卻只是剛起步,落後於倫敦、上海、東京、新加坡和韓國。

香港必須從後趕上承擔氣候責任,並爭取在全球綠色金融指數中奪魁,重奪綠色金融領導地位。

世界地球日啟動綠色金融網誌

為了慶祝世界地球日,當天香港地球之友網頁上推出了綠色金融網誌,通過集體智慧提升香港政策制定者和資產管理者對採用綠色金融和負責任投資的興趣從而作出相關承諾。

香港地球之友認為,我們每個人都可以通過我們自己微小的想法及方式,為拯救地球和我們共同的未來作出積極的改變。

歡迎透過
https://www.foe.org.hk/greenfinanceblog/ 瀏覽「綠色金融網誌」。

How does Green Finance impact you? / 綠色金融會如何影響你?

Green Finance may sound like a remote concept, however it is closer to our everyday lives than we think.

In promoting Green Finance, we are helping to channel investments into opportunities which has both a good rate of return and also has a positive impact to the environment.

In the long run, it will promote more accountability from the financial industry across the ecosystem of banks, insurance companies, investment companies, corporates seeking financing, etc, to price such sustainability in their products, creating a win-win situation for both investors and for the planet.

In Hong Kong, there is a framework for Green Bonds.

Hong Kong is Asia’s fourth largest bond issuance center (Source: SCMP, June 2018) so us at FoE (HK) believes that we can do more to promote and encourage the issuance of such Bonds across corporations and investors. In addition to Green Bonds, there are other investment vehicles that we would like to introduce in this blog so you can also be aware of the types of Green Financing opportunities available to you.

As an additional reference material, the UN has also mentioned Green Financing as one of their regional initiatives in Asia Pacific, and you can read more about it in their website: – https://www.unenvironment.org/regions/asia-and-pacific/regional-initiatives/supporting-resource-efficiency/green-financing.

Furthermore we would like to share the view from practitioners in Hong Kong (Prof. Entela Benz-Saliasi – Adjunct Associate Professor of The Hong Kong University of Science and Technology, Ms. Alexandra Boakes Tracy – Founder and President of Hoi Ping Ventures), please enjoy the interview video.

綠色金融聽起來像一個遙遠的概念,但近年此議題已愈來愈靠近我們的現實生活。

推廣綠色金融,能令投資轉化為機遇,獲得高額回報之餘,對環境更具有正面幫助。長遠來說,綠色金融將可促使銀行、保險公司、投資公司、尋求融資的企業等金融機構負上更多責任,積極推出具可持續性產品,為投資者和地球創造雙贏局面。

在香港,我們已有綠色債券。

而香港更是亞洲四大債券保險市場之一 (資料來源: 南華早報, 2018年6月),因此香港地球之友相信應在企業及投資者間廣泛推廣此類債券。

除綠色金融外,這個網誌將介紹更多投資工具,請密切留意著我們,亦希望你能找到適合自己的綠色投資類型。

順帶一提,聯合國已把綠色金融訂為亞太區重點關注議題之一,想了解更多,可瀏覽以下網址: https://www.unenvironment.org/regions/asia-and-pacific/regional-initiatives/supporting-resource-efficiency/green-financing.

現在,請各位觀賞兩位金融從業者對綠色投資的分享。

Welcome Message / 歡迎辭

Welcome to the first Green Finance blog post from Friends of the Earth (HK). We would like to be pioneers to promote Green Finance in Hong Kong – through this blog, we will share both our views and relevant publications around this topic.

The Earth Day is the best day for us to start this blog. We believe that Green Finance has a great value proposition – both from an investment perspective and from an environmental sustainability perspective.

We hope this blog would be interactive with the viewers so we welcome any comments and suggestions.

As the first introduction, we would like to invite you to view the following interview with Mr. Robin How, independent analyst and Mr. James A Maguire, Partner of Sustainable Development Capital LLP.

歡迎大家瀏覽香港地球之友首個關於綠色金融的博客,香港地球之友希望成為在港推動綠色金融的先導者,而我們亦會透過這個博客傳播關於綠色金融的資訊和分享我們對這個議題的看法。

今天是地球日,我們覺得這是一個和大家一起開始探索此重要議題的最佳日子,綠色金融不單是我們對環境保護的承諾,也可以成為具有充份投資價值的項目。

我們特意選取了獨立分析員Robin How先生和Sustainable Development Capital LLP合伙人James A Maguire先生的訪談去作為這個博客的第一個篇章,歡迎各位觀賞並提出意見。