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.


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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。


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