5th June – World Environment Day’s Special. Green Finance: What’s the Point? / 6月5日 — 世界環境日特刊 :為何需要推行綠色金融?

Special commissioned by Alexandra Tracy, President of Hoi Ping Ventures / 特約撰稿Hoi Ping Ventures主席 Alexandra Tracy

Green finance in Hong Kong has really started to take on some momentum over the past few months, with a raft of announcements from policy makers which will have an impact across a range of financial sectors.

In a bold signalling move, Hong Kong has become the first Asian government to sign up to the Green Bond Pledge, while issuing its first tranche of sovereign green bonds in May. In a similar vein, the Hong Kong Monetary Authority will reportedly soon become a signatory to the United Nations Principles of Responsible Investing, and is looking at joining the central banks’ Network for Greening the Financial System.

More tangibly, on the ground, HKMA has also announced a new sustainable bank initiative for Hong Kong banks, aiming to push them towards greater “greenness” and will create a Centre for Green Finance to provide technical assistance. On the investment side, HKMA’s Exchange Fund is looking to incorporate more ESG principles into its activities, while the Securities and Futures Commission and the Hong Kong Stock Exchange are looking to heighten ESG disclosure by listed companies and fund providers.

So, green finance in Hong Kong is moving forward, and this is a good thing. Financial markets must evolve to keep ahead – Hong Kong can’t play the “offshore RMB” card for ever – and competence in this area is likely to be essential to maintaining global market competitiveness.

What is green finance for?

But let’s look at the bigger picture for a moment: not so much, “what is green finance?” (and how do we get really good at it ?), but also, “what is green finance for ?”

There is a huge demand for financing for green and sustainable development, infrastructure and business. Trillions of dollars need to be invested in our region every year to achieve the Sustainable Development Goals. Construction of cclimate smart infrastructure alone in developing Asia is likely to cost nearly US$2 trillion annually.

Much of that investment, over time, will increasingly come from so called “mainstream” investors, as we see business practices shifting towards more green and sustainable norms. Where green finance is needed – in the short to medium term – is to fill market gaps and to fund projects and businesses that traditional fund managers and banks currently won’t touch.

When this is done correctly, it can be incredibly powerful and transform local markets.

For example, the Connecticut Green Bank in the US has implemented one of the most successful commercial building energy efficiency programmes in the world, creating a structure for long term financing of energy upgrades, which was not then available from banks in the state. The positive performance of loans under the programme has since attracted several private funders into this sector.

Similarly, the Indian Solar Loan Programme transformed the market for solar home systems in Southern India from a small, cash only business into a thriving sector which was able to attract significant bank capital. With initial support from the UN, local banks could become familiar with the potential risks of funding solar and appreciate the opportunities in this growing business line. They are now lending on purely commercial terms.

Transforming business as usual

Green finance plays a crucial role in financing businesses that struggle to raise funding from traditional sources. Its value lies in transforming “business as usual” – enabling green and sustainable activity that might not otherwise be able to succeed.

At the same time, green finance is itself a business, which can generate substantial rewards both for its proponents and for the wider economy. Growing the pool of capital available in Hong Kong to green businesses will create new opportunities for the financial services sector, as well as supporting the low carbon technology, construction and supply chain sectors.

在過去數月,綠色金融的勢頭在香港逐漸成形,政府宣布的多項措施將為整個金融業界帶來重大的影響。

今年5月,香港成為首個亞洲城市簽署綠色債券誓約,並發行第一批主權綠色債券。與此同時,據報導,香港金融管理局日內將成為聯合國負責任投資原則的簽署者,並正考慮加入中央銀行的綠色金融體系網絡。這些都是大膽而顯著的行動!

在切實執行方面,金管局還宣布了一項針對本地銀行業可持續發展的新計劃,旨在推動各銀行邁向更「綠」,另外亦將成立綠色金融中心以提供技術支援。在投資方面,金管局外匯基金希望將更多ESG (環境、社會與管治) 原則納入其運作當中,而證券及期貨事務監察委員會及香港交易所則建議加強上市公司及基金服務供應商的ESG披露規定。

由此可見,香港在綠色金融上正迅速發展,這絕對是一件好事。金融市場必須與時並進才能保持國際領導地位。香港不能永遠只依靠「離岸人民幣」這張王牌 — 發展綠色金融的能耐可能對香港能否維持全球市場競爭力至關重要。

綠色金融有何用處?

現在讓我們先討論一些基本問題,除了問「綠色金融究竟是什麼?」(以及我們如何能在此方面做得好?)之外,我們還需要了解「綠色金融到底有何用處?」。

現今社會對綠色金融和可持續發展、基建及商業的資金需求巨大。我們的地區每年均需要投入數以萬億計的資金才能實現可持續發展的目標,例如僅是在亞洲發展中國家興建氣候智能設施便每年耗資近2萬億美元。

隨著時間的推移,隨著商界採納綠色和可持續的標準規範,以上所述的投資項目資金將會越來越多來自所謂的「主流」投資者。而推動綠色金融的作用 — 在中短期內 — 便是填補市場的空白,為傳統基金經理和銀行目前不會參與融資的項目和業務提供資金。

若這個計劃順利進行,將會為香港金融市場帶來改造性的變化。

例如,美國康涅狄格州綠色銀行推行了世界上其中一個最成功的商業建築節能計劃,為這種升級節能設備項目的長期融資建立了一個獨特的系統,當時全美國其他銀行都無法做到。這項計劃在回報上表現優秀,自此吸引了多個私人投資者加入融資的行列。

無獨有偶,印度太陽能貸款計劃將印度南部的太陽能家庭系統市場從小型的、以現金為基礎的業務,轉化為一個能夠吸引大量銀行資金的系統。初時,計劃得到聯合國的支持,他們協助當地銀行去逐漸了解投資太陽能的潛在風險,並認識這個不斷發展的市場機遇。現時,當地銀行已經對這個行業有充份的認識, 並已經能夠從純商業角度批核貸款。

改變「金融常態」

綠色金融在難以從傳統投資者當中籌集資金的企業項目上,發揮著至關重要的作用。它的價值在於改變「金融常態」— 為比較難在傳統融資渠道集資的綠色及可持續發展計劃提供所需的資金。

與此同時,綠色金融作為一項業務,也能為其支持者及為整體經濟帶來豐厚的回報。在香港,增加綠色企業融資將能為金融業製造新的機遇,並進一步支援低碳技術、建築與供應鏈等行業。

ESG不單是報告,而是承諾

香港地球之友綠色金融顧問

ESG報告不應被視為短期的、Box-ticking的任務,更絕不是促銷活動的工具。ESG報告是企業對社會、對股東的長期承諾,認知自身業務在持續發展方面所需下的功夫,指定關鍵績效指標(KPI),製定計劃和改進目標,不僅對股東創造財務回報,而且對環境和社會創造效益。可持續發展報告是企業與其內部和外部利益相關者(stakeholder)之間最重要的溝通渠道。

儘管香港交易所在處理ESG報告方面的歷史相對較短,但一些公司在ESG報告和相關的工作一直走在前列,中華煤氣便是其中之一。自2007年以來,該公司已開始發布可持續發展報告,該報告遵循GRI標準,這是可持續發展報告的第一個全球標準。訂立這些標準是GRI作為獨立國際組織的一項工作,它幫助企業和政府了解和傳達其對氣候變化、人權、治理和社會福祉等關鍵可持續性問題的影響。中華煤氣在報告質量和ESG方面的表現值得作為其他上市公司的參考。這方面的工作或許也有助影響公司的業績和股價表現?

中華煤氣可持續發展報告

大快活ESG報告披露不足

香港地球之友綠色金融顧問

大快活ESG報告披露不足

港交所強制要求香港上市公司披露環保、社會及管治報告, 今年已經是第三年。在下研究了超過兩百分報告, 水準極度參差。

看看2017/18大快活的報告, 集團使用了極大量的天然氣, 但卻因天然氣而產生的硫氧化物, 氮氧化物及PM, 亦是港交所要求強制披露的指標, 卻沒有披露。另外大快活理應有一大隊車隊, 理應披露用油量, 在報告內完全沒有提到。最令人氣結的, 是大快活每天所用的包裝品總量, 包括餐盤上的即棄包裝, 以及外賣包裝, 數量十分驚人, 但也沒有在報告內披露。以上所說的, 全是屬港交所強制披露的要求指標。

看了全份報告, 不合規的問題太多, 難以勝數。如此水平, 強制披露這份報告又有甚麼意義? 如果港交所不願執法, 報告水平一定只會永遠停留在塗脂抹粉, 沒有人會願意認真看待, 綠色投資者又怎樣找到可靠的資料? 看來我們還有漫漫長路要走。

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。