【Join us!】Green Finance Connect Forum – ESG Implementation in Hong Kong / 綠色金融論壇 – ESG在香港的實踐

Coming up in Nov, Friends of the Earth (HK) and PolyU Economic Sustainability & Entrepreneurial Finance (CESEF) will jointly hold an online Green Finance Forum regarding ESG development in Hong Kong. We are delighted to announce that JP, Under Secretary, Financial Services and the Treasury Bureau and Head of Markets, Hong Kong Exchanges and Clearing Limited will be joining us for the event. Other details of the symposium are as follow:

Title: “Green Finance Connect Forum- ESG Implementation in HK”
Panel Discussion Topic: Opportunities & Challenges of ESG Integration in HK
Date: November 2, 2020 (Mon)
Time: 2:30 pm – 4:40 pm
Organisations: Friends of the Earth (HK), Center for Economic Sustainability and Entrepreneurial Finance, The Hong Kong Polytechnic University
Language: English

**The session will be conducted online via Zoom.

If you are interested, please register HERE to reserve your seat. For more information, please visit HERE.

香港上市公司在推行ESG的過程中會遇到什麼問題?ESG又能夠為企業帶來什麼機遇呢?香港地球之友將於11月2日夥拍香港理工大學,舉辦一場網上綠色金融論壇,主題為《綠色金融論壇 – ESG在香港的實踐》,當天我們邀請財經事務及庫務局副局長與香港交易所管理層出席,本會主席吳方笑薇女士及行政總裁洪藹誠博士亦會出席論壇,機會難得,切勿錯過!

主題:綠色金融論壇 – ESG在香港的實踐
日期:2020年11月2日(星期一)
時間:下午2時30分至下午4時40分
主辦機構: 香港地球之友、香港理工大學可持續經濟與創業金融中心
語言:英語

**論壇將於網上以zoom形式進行

報名表格>>https://bit.ly/35h8med
了解更多>>https://bit.ly/34hC3fT

The Call for Green Premiums and Carbon Taxes

Green Finance Advisor of Friends of the Earth (HK)

In a previous article The Financialization of Negative Externalities, this blogpost argued for an adoption of Coasean bargaining in attaching a measurable, fair and standardized financial cost to negative externalities that leads to global warming in the normal course of economic activity. In attaching a financial cost, the market mechanism takes over, leading to incentives for economic participants to adapt, innovate, and wean itself from fossil fuel energy sources, and provide a real and quantifiable economic basis for moving towards a carbon neutral economic system. Often times the theoretical basis for such arguments are sound, however when it comes to application, regulators and industry participants often cite lack of evidence or impracticality or other unforeseen difficulties such as unequal impact to lower income countries or demographics. Taken together, there is considerable inertia in implementing policies that can mitigate the effects of global warming which in order to meet targets of carbon neutrality, ought to be implemented as early as possible. It is therefore encouraging that Goldman Sachs and Bill Gates recently published articles citing the practicality of quantifiable financial measures of negative externalities as one of the tools to tackle the immense challenge of climate change.



Exhibit 1: The Cost Curve of Decarbonization Shows Many Low-Cost Investment Opportunities, but Quickly Becomes Steep

Source: Goldman Sachs Global Investment Research



Exhibit 2: A Carbon Tax of $50 Would Lower Emissions by Around 25%

Source: Goldman Sachs Global Investment Research



Exhibit 3: Empirical Studies Find Similar Effects of Carbon Taxes on Emissions

Source: Goldman Sachs Global Investment Research



In the Goldman Sachs research, the team finds that the marginal cost of replacing current power generation in the United States from fossil fuels to gas & renewable alternatives to be low and represents one of the low hanging fruits in the first steps towards reducing carbon emissions. The team also modelled a mere $50 per metric ton of carbon tax would have the effect of reducing CO2 emissions at 2018 levels by 25% and a tax of $100 per metric ton would lower this further by 45%. Moreover, these estimates are supported by empirical studies from jurisdictions that implemented carbon taxes in Europe and Canada (Hatzius, J., Struyven, D., Bhushan, S., Milo, D., 2020).

Similar to the carbon tax argued by the Goldman Sachs team, Bill Gates advocates for a Green Premium as a measure of our progress toward eliminating carbon emissions as well as a guide to action to identify where the biggest gaps are and thus where innovation is needed. Gates defines the Green Premium as the difference between the cost of the existing fossil fuel source of energy and its clean alternative. One notable study Gates cited is that decarbonizing Europe’s power grid by 90 to 95% would only cause rates to increase around 14 euros per month for a typical household in the European Union. In the United States, the cost would be an increase of $18 per month for the average home. These are striking findings as it suggests only incremental increases of costs will have a significant reduction in carbon emissions. Gates suggests three levers to reduce Green Premiums and thus the adoption of the clean alternative. (i) Governments to use policies to increase the cost of the carbon-based production method, similar to the carbon tax proposed by the Goldman Sachs team and or to make the clean alternative cheaper; (ii) Companies and investors to commit to buying an using cleaner alternatives, invest in research and development, and support for clean-energy entrepreneurs and startups; (iii) Individuals can help by choosing the cleaner alternatives, thereby incrementally increasing the market and demand, encourage innovation and ultimately reduce the price and increase affordability of clean alternatives (Gates, B., 2020).

In summary, the basis for applying Coasean theorem to tackle the challenges of climate is not only theoretically sound but also has practical basis. Of course, for large economic polities such as the United States and the European Union, it is understandable that incorporating Carbon Taxes or Green Premiums may encounter more political hurdles to achieve implementation as the potential cost for ill-conceived or poorly implemented policies may be quite significant. However, for us in Hong Kong, we have prided ourselves as a highly developed and nimble economy, the costs of missteps will be manageable given our relatively small economy. Moreover, seeing the success achieved in Canada and Scandinavian countries with the implementation of the carbon tax in achieving reduction in carbon emissions, the likelihood of not achieving carbon emissions reduction should be relatively low. Thus, our government should adopt measures of carbon taxation and or green premiums and serve as a leading example in the Asia-Pacific region in the global charge towards carbon neutrality, the eventual success will only serve as another case study for global leaders to take reference and further push the needle towards the full adoption of green policies.

REFERENCES

Gates, B., 2020. Introducing the Green Premiums, Gates Notes

Hatzius, J., Struyven, D., Bhushan, S., Milo, D., 2020. Mitigating Climate Change via Taxes and Subsidies, Goldman Sachs Global International Research


Visit www.foe.org.hk for more news about Friends of the Earth (HK)!
Green Finance Facebook page: https://www.facebook.com/greenfinancefoehk/
FoE (HK) LinkedIn page: https://www.linkedin.com/company/friends-of-the-earth-hk/

網上研討會 – 在ESG大潮下,中小企如何承擔社會責任/ Online Webinar – Under the trend of ESG, how do the SMEs practice social responsibility?

自2013起香港聯合交易所(聯交所)已推出了《環境、社會及管治報告指引》(ESG Reporting Guide),為上市公司提供框架,並要求它們每年匯報在ESG方面的工作。因此,近年來越來越多中小企的業務加入環境(Environment)、社會(Social)及管治(Governance)元素,以提升生產力。長遠來說,ESG會為中小企維持業務增長,更能拓展新市場。

香港地球之友連同中小企可持續發展學會將舉辦網上研討會,讓中小企更能詳細了解ESG「環境、社會及管治」的相關內容及如何尋找機遇,以達至企業履行企業社會責任並創造可持續發展的未來。

主辦機構:香港地球之友及中小企可持續發展學會
日期: 2020年10月20日 (星期二)
時間:下午2時半 至 下午4時正
語言:廣東話
*會議將於網上透過Zoom進行。

主持人:
麥沛霖先生 – 香港地球之友董事局副主席
連舜香女士 – 香港地球之友董事局成員

程序:
下午2:25      登入
下午2:30      主題分享   (楊孝文先生 – 香港地球之友綠色金融顧問)
下午3:30      總結          (洪藹誠博士 – 香港地球之友行政總裁)
下午3:40      問答環節
下午4:00      完結

有興趣參加者,請於2020年10月19日(星期一)或之前按此報名參加。

如有查詢,請致電(852)3184 1510與葉小姐聯絡。


瀏覽香港地球之友網頁 www.foe.org.hk 了解更多
綠色金融 Facebook 專頁: https://www.facebook.com/greenfinancefoehk/
香港地球之友 LinkedIn 專頁: https://www.linkedin.com/company/friends-of-the-earth-hk/



Since 2013, The Stock Exchange of Hong Kong Limited (SEHK) has launched the ESG Reporting Guide, which provides a framework for listed companies and requires them to report on ESG work annually. Therefore, in recent years, more and more SMEs have incorporated Environment, Social and Governance into their businesses to improve productivity. In the long run, ESG will maintain the business growth of SMEs and will be able to assist them to expand into new markets.

Friends of the Earth (HK) will be organising an online webinar with SME Sustainability Society to enable SMEs to learn more about ESG (Environmental, Social and Governance) related content and how to look for opportunities so that they can fulfil their corporate social responsibilities and create a sustainable future.

Organiser: Friends of the Earth (HK), SME Sustainability Society
Date: 20 Oct 2020 (Tue)
Time: 2:30-4:00pm
Language: Cantonese
*The session will be conducted online via Zoom. 

Host:
Simon Mak, Vice-Chairperson of Friends of the Earth (HK)
Ophelia Lin, Board Members of Friends of the Earth (HK)

Rundown:
2:25pm check in
2:30pm Sharing Session: Hauman Yeung – Green Finance Advisor of Friends of the Earth (HK)
3:30pm Closing remarks: Jeffrey Hung – CEO of Friends of the Earth (HK)
3:40pm Q&A session
4:00pm End

Interested parties please register online (https://bit.ly/376Ebcn) on or before 19 October 2020 (Monday).

For enquiries, please contact Tiffany Yip at (852) 3184 1510.


Visit www.foe.org.hk for more news about Friends of the Earth (HK)!
Green Finance Facebook page: https://www.facebook.com/greenfinancefoehk/
FoE (HK) LinkedIn page: https://www.linkedin.com/company/friends-of-the-earth-hk/

Final Call for CESGA! / CESGA最後召集!

Jointly presented by FoE (HK) and EFFAS, the Certified ESG Analyst Programme (CESGA) will be closing for registration for Nov 2020 intake tomorrow. If you are a financial analyst, a portfolio manager or others specialists who are interested in ESG and corporate sustainability, you must not miss this chance to upgrade yourselves with internationally recognised ESG♻️ qualification. For registration and more information, please browse️ the link here.

我們與歐洲金融分析師聯合會(EFFAS)合作推出的「環境、社會與管治分析師認證計劃」(CESGA),將會於明天截止報名。如果你的企業有意可持續性發展、加深對ESG的認識、或在環境保護上出一分力,請記得把握最後機會報名!詳情請按此了解更多。


iBond looks good but sBond could be even better / iBond看起來不錯,但sBond可能更好

Green Finance Advisor of Friends of the Earth (HK)

Last week the Hong Kong government has announced a new round of issuance of iBond, an inflation linked bond as part of the Government Bond Programme for retailers like you and me to subscribe. As we are in the near-zero interest rate environment the offer of a minimum 2% of interest payment every six months for 3 years by the latest iBond is certainly attractive.

Disclaimer: this is not an investment advice from the Green Finance Advisory or Friends of Earth (Hong Kong) and we are not saying that you should subscribe to these bonds. And we remind you that prices of assets, including the iBond, can go up and down… 🙂

That being said, iBond only gives us financial return. Will there be sustainability contributions by investing our money in iBond? Will the proceeds be used to improve our environment and society? We do not know the answer as the money raised from the iBond will go to the government’s bond fund, which does not have a specific tie to sustainability development.

In our view, the Hong Kong government should consider evolving the iBond into sustainability-linked bonds (sBond) of which the proceeds should contribute to sustainable development and the interest rate should adjust with key sustainability performance indicators (KSPI). Echoing to our response to the government’s 2020-2021 budget, here are some of our suggestions for the use of proceeds and the KSPI for interest rate adjustment.

Embracing a sustainable world should be the job of every government regardless of population and scale of economy. There are many things Hong Kong government can do to achieve this and sustainable financing is certain a tools that it can use wisely. In our view, the issuance of sBonds can demonstrate Hong Kong’s innovation in sustainable finance and its commitment to sustainability development. At the same time sBond could also perform the basic duties of iBond – raising capital from retail investors and offering them a minimum return. An innovative design of sBonds may even have the potential to lower the government’s longer term cost of funding. We encourage the HK government to take a closer look of this financing option.


Visit www.foe.org.hk for more news about Friends of the Earth (HK)!
Green Finance Facebook page: https://www.facebook.com/greenfinancefoehk/
FoE (HK) LinkedIn page: https://www.linkedin.com/company/friends-of-the-earth-hk/

上週,香港政府宣布了新一輪的iBond發行。iBond是與通脹掛勾的債券,是政府零售債券計劃的一部分,可供個人大眾認購。在處於接近零利率的環境下,這一輪iBond能連續3年每6個月支付至少2%的利息,對追求低風險穩定回報的投資者無疑有一定吸引力。

(免責聲明:這不是我們綠色金融顧問或地球之友(香港)的投資建議,我們並不是說應該認購這些債券。而且我們提醒您,資產價格(包括iBond)可升可跌… 🙂 )

話雖如此,iBond僅給我們帶來財務回報。通過iBond投資,是否會對可持續發展做出貢獻?政府會將從iBond獲得的資金用於改善我們的環境和社會嗎?我們不知道答案,因為從iBond籌集的資金將流向政府的債券基金,該債券與可持續發展沒有必然的聯繫。

我們認為,香港政府應考慮將iBond轉變為與可持續發展相關的債券(sBond),其收益應為可持續發展做出貢獻,利率應根據關鍵的可持續發展績效指標(KSPI)進行調整。按照我們香港地球之友對2020-21年度財政預算案的回應,以下是一些對iBond資金用途和和相應的KSPI利率調整建議。

不論人口和經濟規模如何,擁抱可持續世界是每個政府的工作。香港政府可以做很多事情來實現這一目標,而可持續融資無疑是可以明智使用的工具。我們認為sBonds的發行可以證明香港在可持續金融方面的創新及其對可持續發展的承諾。同時,sBond還可以履行iBond的基本職責 – 從散戶投資者籌集資金並為他們提供最低回報。 sBonds的創新設計甚至有可能降低政府的長期融資成本。我們鼓勵香港政府仔細研究這種融資方案。


瀏覽香港地球之友網頁 www.foe.org.hk 了解更多
綠色金融 Facebook 專頁: https://www.facebook.com/greenfinancefoehk/
香港地球之友 LinkedIn 專頁: https://www.linkedin.com/company/friends-of-the-earth-hk/