Green bonds after the virus – Hong Kong can lead the way

Alexandra Tracy, Green Finance Advisor of Friends of the Earth (HK)

In the midst of the enormous credit boom around the world, fuelled by the coronavirus panic, green bond markets have been largely closed for business from new issuers. As a response to the virus, several governments and multilaterals have issued social bonds, but choice for investors has been limited.

Happily, green bond sales are now rebounding in Europe. Six companies have launched bonds this month, including Credit Suisse Group, E.On and Swisscom, while Belgian waste water company, Aquafin, is expected to follow soon.

Secondary trading (bonds already out in the market) has held up better, with demand for green bonds holding firm, even among the dramatic sell off seen in recent weeks. There are very few green issues so far from corporates which have particularly suffered in the downturn – such as the oil and gas or consumer sectors – which has helped the asset class as a whole.

Hong Kong’s green bond market was doing quite nicely before the coronavirus hit. Hong Kong issuers raised a total of HK$20 billion during 2019, with companies coming to market including both financial and non-financial corporates. The Hong Kong government was also a major participant, launching the first tranche of its HK$100 billion sovereign green bond programme.

It is to be hoped that Hong Kong will resume its activity in this space as markets settle. As well as being a centre for banks, multilaterals and blue chip corporates to raise funds, the expertise we have locally should enable Hong Kong to be a centre of innovation in the green bond sector. Using the financial markets to refinance and recycle capital, especially for smaller businesses, will be essential to accelerating the flow of funding to green activities. And moving away from “vanilla green” bonds to more diversified products, such as project, resilience and transition bonds may attract both new investors and more varied issuers. Hong Kong can lead the way.

What the pandemic shows us about the economy and our lifestyle?

Green Finance Advisor of Friends of the Earth (HK)

While the current public health situation has induced a temporary shutdown of the world’s major economies leading to significant economic stress for governments as well as substantial segments of the world’s population, it has also showed us how changing some of our habits can lead to a greener world.

For example, the BBC reported in February of NASA satellite images showing a dramatic decline in pollution levels in China as a result of the lockdown that bound ordinary citizens to their home and led to temporary closure of all non-essential businesses (BBC News, 2020).

BBC News, 2020

Separately, the FT reported that while air travel has grounded to a halt and risk affecting many livelihoods in the industry, the upshot is that air pollution has also fallen significantly (, 2020).

While the impact on the aviation, oil & gas, travel, and retail industries are regrettable, the health pandemic does show us if we adjust our lifestyle to adopt greener living practices, such as:

  1. Reduce non-essential air travel: the no-fly movement is at the forefront to practice travel by avoiding flying altogether (Timperley, J., 2020). While this may be a drastic goal for many of us, we can always begin by cutting non-essential business trips for example from four trips a year to two trips a year and making more use of video conferencing tools that are getting better by the day.
  2. Reduce the amount of fast fashion we purchase: with the lockdown comes reduced social gatherings, which also reduces the need for us to dress to impress. But do we really need so many pair of jeans, or so many different pairs of shoes? The pandemic should help us to see what is essential in our wardrobe and figure out how to dress smartly but reducing waste at the same time.
  3. Finally, this natural experiment of working from home has shown that for certain industries, it is possible to function at normal capacity (, 2020). If employers can learn from this experience and adopt a flexi-approach to working from home, such as half the workforce works from home half the week and rotates onsite with the other half working from home in the second part of the week. This can reduce the carbon footprint of the daily commute, as well as less requirement for office space, which in turn reduces the pollution generated from construction and the day to day pollution from operating the lighting and ventilation provisions for offices.

If these practices are widely adopted as societies emerge from the pandemic lockdown, the investment implications should benefit those companies who score strongly in ESG compliant measures, and overtime, ESG investing will not only be seen as allocation of capital to mitigate against unsustainable practices, but instead as a wholistic investment in the economy of the future.


BBC News. 2020. Polluting Gases Fall Rapidly As Coronavirus Spreads. [online] Available at: <> [Accessed 11 May 2020]. 2020. The ‘Unprecedented Natural Experiment:’ Stay-At-Home Order Reduces Air Pollution, Offers Clues In Climate Change Fight. [online] Available at: <> [Accessed 11 May 2020]. 2020. Aircraft Emissions Fall Sharply As Pandemic Grounds Flights. [online] Available at: <> [Accessed 11 May 2020].

Timperley, J., 2020. Why ‘Flight Shame’ Is Making People Swap Planes For Trains. [online] Available at: <> [Accessed 11 May 2020].

Green Bond in Brown Market

Mostafa Monira Firdouse, Green Finance Advisor of Friends of the Earth (HK)

Green bonds are becoming top investment vehicle of choice for the private and public sectors to finance projects. On March 2019 Hong Kong government issued Green Bond Framework, specified eligible categories in the Hong Kong SAR. such as renewable energy, waste management and resource recovery, water and waste water management etc. Sectors are attractive to the growing number of investors with an interest in sustainable investment options and are generally oversubscribed. While most green bonds are issued by banks, it is increasingly common for corporations to issue their own bonds. Big brands in the technology, utilities, automotive and consumer products sectors are among those that have done so.

Along with the advantages, there are also challenges and uncertainties for green bond issuers as the market is still new. Besides, green bond investors are becoming more demanding and increasingly want independent assurance that bond proceeds have been monitored and managed appropriately. Considering the crucial importance, it is necessary to develop local expertise in green certification services. The HKSAR Government has been encouraging the Hong Kong Quality Assurance Agency (“HKQAA”) to develop a Green Finance Certification Scheme (“GFCS”), which provides third-party conformity assessment on green financial instruments by making reference to a number of international and national standards.

There are number of things should be discussed about the framework. However, I wanna start with GREEN BUILDING category, which immediately caught my eyes, specially, project eligibility, which includes: construction of new government buildings/ facilities and renovation/ retrofitting of existing government buildings/ facilities that have received or are expected to receive a recognised green building certification. We all know, the Hong Kong’s public housing supply will be ramped up to account for 70 per cent of the target for the next decade, the government announced on Dec. 20, 2018 in a major policy change to provide more affordable homes. The move is a departure from a policy adopted in 2014, where public rental housing and subsidised flats accounted for 60 per cent of the total housing supply target, while the remaining 40 per cent would be private flats.

My questions:

  • Green Building category covers public housing, educational institutions, hospitals etc.?
  • How about financial markets and banks, any new product coming to serve green financing needs?
  • What is the competitive advantage for existing private housing, while government is taking over 10% of more share?
  • Besides, why social benefits are not included in this framework?


張振宇 香港地球之友榮譽司庫






GSF Steering Group: An important and exciting step for Hong Kong

Mr. Anthony Cheung, Board Governor of Friends of the Earth (HK)

FoE (HK) applauds the news published yesterday regarding the establishment of the GSF Cross-Agency Steering Group. The Steering Group was reported to aim at co-ordinating the management of climate and environmental risks to the financial sector and accelerating the growth of green and sustainable finance in Hong Kong.

Mr. Anthony Cheung, Board Governor of Friends of the Earth (HK) welcomes this launch. “It is truly an important step for Hong Kong, and we are delighted that it responds to our Green Finance Policy Address issued last year which recommended a co-ordinated effort to provide leadership and oversight for the development of green finance industry in Hong Kong”.

“Hong Kong has great potentials to be the world’s top green and sustainable financial centre, and the establishment of this Steering Group marks an exciting step for our city. We are hopeful and look forward to see a range of effective and co-ordinated policy responses, which will be crucial to foster a stronger green finance ecosystem allowing Hong Kong to excel in this global movement.”

*Link to the Joint statement on the establishment of the Green and Sustainable Finance Cross-Agency Steering Group:

*Link to the Friends of the Earth (HK) Green Finance Policy Address: Catching up with the World:’s%20Submission%20on%20the%20Policy%20Address%20(Green%20Finance)%202019.pdf