December 2020 – FoE(HK) Green Finance Blog 香港地球之友綠色金融網誌

December 28, 2020December 28, 2020 foehk@foe.org.hk

Natural capital is underpriced/ 自然資本被低估

Green Finance Advisor of Friends of the Earth (HK)/ 香港地球之友綠色金融顧問

The Green and Sustainable Finance Cross-Agency Steering Group of Hong Kong recently announced its green and sustainable finance strategy. This is an important step for nurturing Hong Kong to become a green finance hub. One of the five near-term action points of the plan is making climate-related disclosure mandatory for banks and asset managers by 2025. With better information on climate-rated risks capital (hopefully) will act more responsibly and direct to companies and activities that are more friendly to our environment.

Understanding climate risk is important but building a sustainable world we need to have assessment of other aspects outside of climate. We need assessment of natural capital – the world’s natural resources including water, air, soil and living things. It is these assets that enable us to survive and thrive yet we are obviously not preserving them as good as we should. Why? Because we are spoiled and these assets are underpriced in the world of finance.

Let’s take water for example. Ones may argue that water is not free as households and companies are paying for water bills. However, many of these water bills are just based on the cost of transmission and treatment of water. No or very limited value is attributed to water itself. This applies to many other types of natural capital. Among all living things (other than human) in the natural environment are what we see as the most neglected. Should there be methods of estimating natural capital costs and linking those to specific economic activities in our financial system? A proper accounting of the economic value of natural capital seems needed to accelerate our path of sustainability.

We need to treasure and save our natural capital to speed up the sustainable development of the world.

香港政府綠色與可持續金融跨機構督導小組，最近宣布了其綠色與可持續金融的策略計劃及其五個主要行動綱領。這是培育香港成為綠色金融中心的重要一步。該五個短期行動綱領之一為要求相關金融行業必須在2025年或之前按照氣候相關財務披露工作小組（Task Force on Climate-related Financial Disclosures）的建議，就氣候相關資料作出披露。有了有關更多氣候風險的披露，希望資金能投入綠色和可持續發展的業務，令我們的環境變得更好。

了解氣候風險很重要，但是要建立一個可持續發展的世界，我們需要對氣候以外的其他方面進行評估。我們需要評估自然資產, 包括水，空氣，土壤和生物等自然資源。正是這些資產使我們得以生存和發展，但顯然我們並未盡所能保存它們。為什麼？因為我們被寵壞了，這些資產在金融世界中被低估了。

讓我們以水為例。有人可能會爭辯說，水不是免費的，因為家庭和公司都在支付水費單。但是，這些水費賬單很多時候只是基於水的輸送和處理成本。可以說非常有限的價值歸因於水本身。許多其他類型的自然資本也面對同樣的現實。在自然資本中，除人類以外的所有生物的價值最被忽視。是否應該有估算自然資本成本並將其與我們的金融體系中特定經濟活動聯繫起來的方法？

似乎我們需要對自然資本的經濟價值進行適當的核算，以加快世界在可持續發展道路上的步伐。

Reference 資料來源:

Cross-Agency Steering Group Launches its Strategic Plan to Strengthen Hong Kong’s Financial Ecosystem to Support a Greener and More Sustainable Future (17 Dec 2020)

Recognizing the value of natural capital by Lombard Odier (10 Dec 2020)

Clear and practical guides to natural capital management published by ACCA (26 Nov 2020)

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December 21, 2020 foehk@foe.org.hk

BONDS: How far we are to be the Global Green Bond Hub

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

As I am writing this article in late 2020, the world is fighting with COVID-19 Pandemic, Europe and USA remain gripped in health system in living memory. Sure, we will bounce back. Jingle bells ringing and VACCINE is on the way.

The pandemic is driving a boom in investments to fix the climate crisis pandemic has created. It seems, the arrow is in flight. The value of green bonds issued in the first nine months of 2020 surged 12% over the previous year to more than $200 billion, according to research company BloombergNEF. Though, there are questions and concerns on whether the green bonds are more about marketing than helping the environment and we cannot ignore the greenwashing issue. However, I believe, at this moment, we need to think about capturing the momentum and carefully move forward to develop more transparent ESG reporting and to strengthen city’s status as an international financial centre.

Can Hong Kong play the role of next 007, in international green bond market?

As we know, Bond Connect played an active part in the development and liberalisation of Mainland bond market. The launch of Bond Connect by the HKMA and the People’s Bank of China in 2017 accelerated and deepened the open-up process. It’s accounted for 52% of foreign investors’ total turnover in the Mainland interbank bond market in the first eight months of 2020 through Hong Kong financial infrastructure. Which establishing Hong Kong’s position to become a green bond financing hub for the Greater Bay Area.

However, according to the Green Bond Survey report by Hong Kong Academy of Finance, it showed; potential issuers and potential investors alike rate having external reviews and improved quality of ESG information disclosure as key factors that make green bonds issued in Hong Kong more attractive. From the think-tank’s point of view, which should be an immediate priority to take immediate action by HKMA and participatory financial institutions.

December 14, 2020December 14, 2020 foehk@foe.org.hk

我們每人都有一顆自私的心

香港地球之友綠色金融顧問

說到綠色金融，我們可能會想到各種不同的金融產品，例如綠色債券，ESG基金等等不同的花巧名稱與產品，但我們是否買了所謂綠色金融產品，就真真正正支持到地球生態，然後就可心安理得的生活？要回答這個問題，首先我們必須回歸本質，看看所謂綠色金融產品的結構。

在眾多綠色金融產品中，綠色債券顧名思義，是購買者以小債權人的身份，貸款出來支持綠色項目，而ESG基金，則是通過投資基金，期望基金經理以符合自己理念的投資方式，來選擇投資項目，以改善地球生態，表面看來故事簡單，但現實的故事發展，又是否真如我們所願？

很多朋友問筆者，電動車何時才能全面取代石化能源車。記得2006年時，筆者是一個綠色私募基金的投資基紀，當時Tesla 的電動車快將推出，傳媒的消息遮天蓋地。當時除了Tesla外，筆者手頭上收到的電動車初創企業商業計劃書就有十多個，到2008年Tesla第一款電動車正式面世，當時我們跟蹤的其他電動車項目，每天都發新消息給我們，今天是電機的功耗又提升了多少，明天是電池的放電能力又提升了多少，有投資銀行出了行業報告，預計2012年，電動車就會大爆發，全面代替傳統汽車，現在回顧，究竟發生了甚麼問題，令電動車到今天市佔率仍如此偏低，電動車企業仍只是那三數家？

要剖析這個問題，我們必需從各個層面深入了解，首先是生產者的層面，要令一位用戶很方便地使用到電動車，統一制式非常重要，就如我們從前的錄音機錄影機，每個生產商的產品都是統一制式，每個供應商都提供一模一樣的產品，你不會擔心買回來的錄音帶，插不進家中的錄音機，但電動車到現在，各個汽車生產商、電池生產商，從來沒有意欲坐下來開會討論統一制式，如果有統一制式，我們買車不買電池，只到換電站換電池，則完全沒有我家的屋苑是否有充電器，充電時間要多長，不同汽車的充電器又不一樣，汽車維修是否有各個牌子的統一代理等問題。他們為甚麼不坐下來談？若你是Tesla, 你願意分享部分技術機密嗎？你是比亞迪，你願意公開你部分的電池核心技術？

從消費者層面，除了上述問題令消費者難以下決心購買外，消費者通常亦會對新產品有一些不合理的期望，例如不少消費者會認為，鋰電池會有爆炸危險。但這個擔憂又是否合理？簡單地說，我們現在使用的鋰電池普遍包括錳酸鋰，鈷酸鋰，或磷酸鋰鐵，當中沒有一種是有爆炸成分的，它們之所以有機會爆炸，是因為電池一般以鋁包密封，電池內因短路會引至高熱而谷爆鋁包，引出物理爆炸而不是化學爆炸，可以說，這種爆炸的機率，遠遠比現在內燃機汽車出意外的機率為低，但我們一般人或監管機構，對新事物卻往往有毫不合理的標準要求，但從來無法用對等的比較法作清楚對比。

從政府的層面，除了在稅收及補貼方面工作外，有沒有主動研究解決充電站問題，法例問題（如允許更多的不同電動行車器如電單車），或支持更多的邊際研發？

直到今天，若你問生產商，他們會說，早在2010年，我們已能生產充電後走四百公里，技術完全成熟的電車。但你問消費者，他們會說，充電最快也充個多兩個小時，入油只要幾分鐘，屋苑沒有充電位，有充電位又長期給非電動車佔用，我怕它會爆炸，不安全，維修很困難，全港只有一兩個維修商，出事可能要等兩個月……., 問政府，他們會說，我們當年已給出很大的稅務優惠，但效果欠理想。

現時各個政府都定下碳中和時間表，但我只舉例一個行業，我們面對的困難就是如此的多。看來要一個綠色行業生存，只支持綠色金融，是遠遠不足夠的，我們不論是生產商，消費者，政府，如果每個持分者都不願意多走一步，想想辦法如何推動行業發展，就如電動車一樣，技術早已成熟，消費者又願意出錢買，政府又願意稅務政策鼓勵，但發展就是龜速，每人都只會「食花生」，看其他人向前走坐享其成，試問以這個心態，我們的2050或2060碳中和，又如何能真的做到？

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December 7, 2020December 7, 2020 foehk@foe.org.hk

After Covid, will there be more green development, or less?

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

Government around the region are scrambling to develop plans for recovering from the pandemic. Environmental champions have made much of the opportunities for moving away from business as usual and “building back better”. They point to research recently published by Oxford University, which suggests investment in climate friendly policy initiatives could also offer the best economic returns. Based on surveys of more than 200 senior economic officials, the research finds that interventions with the greatest environmental and economic impacts include investing in clean physical infrastructure, natural capital projects and clean R&D.

But is this all talk and no action ?

To some extent, in Asia, it would seem to be so. Even before the virus, ASEAN was not on track to meet its regional target of sourcing 23% of primary energy from renewables by 2025 – it looks as though that share will stay at around 15%. On top of that, the International Energy Agency predicts that oil will continue to dominate road transport demand in South East Asia.

Now, policy makers urgently need to attend to shocking economic downturns and to generate growth as rapidly as possible, especially in those regions which are struggling to tackle rising poverty. In these circumstances, it is understandable that short term decision making may overtake longer term green aspirations. This is hardly the time, for example, for dramatically rolling back the generous fossil fuel subsidies that allow access to energy and transportation for the poorest.

Most of the huge economic stimulus packages being developed by governments in the region make little mention of green priorities. Indeed, a recent study by ING Bank of these plans described most of their proposals as a “lamentable green response to Covid 19”.

Asia’s largest economies are proposing to make green investments, but are also supporting fossil fuel as part of their economic recovery plans. China has approved plans for new coal power plant capacity at the fastest rate since 2015, while India’s stimulus package contains support for both coal and oil industries, as well as allowing more deforestation for industrial development. And for all the talk of Korea’s Green New Deal, it is hard to find significant environmental measures in its proposals.

But there are reasons to feel positive. In the last two years, Vietnam has made enormous progress on increasing its solar and wind generating capacities, with a combination of well thought out policies and fiscal incentives. It now accounts for over 40% of South East Asia’s total solar capacity. Significant challenges remain for switching away from fossil fuels entirely, but the government is responding with sweeping changes to the power sector and moves to encourage direct corporate purchases of clean energy.

And New Zealand stands out in the Asia Pacific region for including in its economic recovery plans considerable spending on nature based solutions. The government has announced a NZ$1.3 billion programme that will invest in restoring wetlands and riverbanks, removing invasive species and improving tourism and recreation services on public lands. This is expected to create 11,000 new jobs.

Meanwhile, what of Hong Kong? In the Chief Executive’s Policy Address this week, there was mention of a number of environmental initiatives, such as more recycling and subsidies for electric vehicle charging infrastructure. These were somewhat outweighed, however, by ambitious planning for intensive development of the airport and expanded urban areas.