How Hong Kong can step up the fight against climate change

【意見交流園地 Idea Exchange】

Hong Kong, an international financial centre and bustling metropolis, is grappling with the monumental task of battling climate change. Recognising the urgency, the government launched the Climate Action Plan 2050 back in 2021. 

The plan featured four primary strategies for carbon reduction: achieving net-zero electricity generation, promoting energy-efficient and green buildings, advancing green transport, and pushing for territory-wide waste reduction. 

Despite the city’s commendable strides in recent years, more concrete steps are necessary. Hong Kong must consider introducing a carbon tax. Putting a price on carbon emissions effectively factors in the environmental cost of pollution. Such a scheme could spur businesses and individuals to diminish their carbon footprints and channel their resources towards cleaner technologies. 

Given its robust economy and significant carbon emissions per capita, Hong Kong is in a unique position to set a precedent. It is worth noting, however, that a carbon tax is no long-term solution to climate change. 

To truly turn the tide against climate change and secure a brighter future for subsequent generations, the city must embrace research and innovation. Hong Kong must prioritise investment in the development of clean energy technologies, sustainable urban planning and climate adaptation strategies. 

Through the fostering of partnerships among academic institutions, government bodies and the private sector, Hong Kong could emerge as a nexus for pioneering research and innovation in climate change mitigation and adaptation. 

Moreover, Hong Kong must bolster its adaptive measures to weather the impacts of climate change. The city faces considerable threats from rising sea levels, severe weather patterns and heatwaves, which could wreak havoc on both infrastructure and people. By integrating climate resilience into urban planning, Hong Kong could devise innovative solutions like green infrastructure, strategies for mitigating the urban heat island effect, and designs for sustainable built environments. 

The Netherlands’ Room for the River programme, a design plan that successfully addressed flood prevention, serves as inspiration. Investment in early warning systems and disaster preparedness could also help alleviate the potential human and economic toll of climate-related catastrophes. 

In light of the urgency and scale of the global environmental crisis, Hong Kong’s climate policies require significant enhancement. By enforcing a carbon tax, fostering research and innovation, and strengthening adaptive measures, Hong Kong has the potential to emerge as the vanguard in the fight against climate change. The moment for decisive action is upon us, and Hong Kong has the opportunity to sculpt a greener and more prosperous future for the generations to follow. 

(*Reposted from South China Morning Post – LETTERS published on 21 Dec 2023) 
https://www.scmp.com/comment/letters/article/3245690/3-ways-hong-kong-step-climate-action 

COP28 氣候大會:為何淘汰化石燃料那麼難?

【意見交流園地 Idea Exchange】

「聯合國氣候變化框架公約」第 28 次締約方大會(COP28)上週閉幕,最終達成的協議呼籲全球擺脫化石燃料,實現能源轉型。在今屆充滿爭議的氣候峰會,化石燃料的未來成為焦點。到底為何一直難以淘汰化石燃料?

分析師仍在拆解 COP28 發佈的文件。目前的關鍵之一,是起草者在談判後決定廢除「逐步淘汰」化石燃料的概念,轉為只強調「過渡」措辭。英國雜誌「經濟學人」指出,有些人會對協議感到失望,小島嶼國家的聲音被忽視,協議只規定「有增無減」的煤電要被淘汰,只要國家使用碳捕集與封存(CCS)技術減排,就可以繼續燃燒化石燃料。

全球協議只是一小步,更難的任務是行動。這次達成的協議向石油公司發出一個信號,例如勘探許可證面臨的法律挑戰;但要減少對化石燃料的依賴,最終需要使其失去競爭力。結合碳價格和針對清潔技術的補貼,或能在富國實現這一目標。

COP28 基本上迴避了窮國需要支援這個問題。擁有化石燃料儲備的發展中國家認為,期望它們在沒有援助的情況下放棄收入來源並不公平。智庫能源轉型委員會表示,要盡早擺脫煤電,富國需要在 10 年內每年向窮國提供約 250 億至 500 億美元的贈款和其他融資。

但若然逐步淘汰化石燃料,對石油市場有何影響?「華爾街日報」分析,COP28 的聲明沒有具體提及石油,但該協議標誌著化石燃料時代「開始終結」。替代能源資產管理公司 Ecofin 高級基金經理 Matt Breidert 認為,要理解協議對石油意味甚麼,要看市場在哪些領域有化石燃料的「合適替代品」,海上風力發電可取代煤炭、陸上風能和太陽能可取代部分天然氣,但有些化石燃料暫未有合適替代品,例如在現代經濟和社會中廣泛使用的一些石油產品。

整體而言,溫室氣體排放分為 3 大範圍,企業若想制定減少排放及使用化石燃料之目標,都柏林城市大學助理教授 Fabiola Schneider 在 The Conservation 撰文稱,企業對範圍 3 排放負責任的第一步,是提高透明度。公司在採購決策中應對上游供應鏈排放確實有些進展,但使用產品時的排放難以解決。自願性碳抵消市場上出售的碳信用額,用於抵銷化石燃料排放,然後再於產品貼上「碳中和」標籤並出售,但只有不到 5% 的抵銷額能真正消除大氣中的二氧化碳。因此,將焦點放在範圍 3 排放,可鼓勵企業在實現淨零目標時顧及整個業務模式,更重要的是,這將使多年來一直從污染中獲利的企業承擔責任。

*原文刊登於CUP媒體。

ESG 抗跌力應驗與否在於信念?

【ESG分析師洞見分享】Ryan Fung, CESGA

沒有信念,ESG 投資就失靈?第三季 ESG 基金統計數據顯示,ESG 的抗跌能力和跑贏大市能力幾乎只在歐美股市場奏效,在一些 ESG 重視程度沒有那麼高的國家卻「不靈光」,跑輸大市,活像一場信者得救的救贖。

在高利率和通脹的環境下,第三季數據顯示,MSCI ESG Leaders 指數略為跑贏大市 0.3 個百分點,但在其他 ESG 退潮的國家卻失去魔力,不論是專注於氣候解決方案,抑或是綠色交通的投資主題,齊齊無運行。

雖然這是戰火紛飛和政治先行的年代,不過在吸金能力方面,ESG 基金在歐美仍一直吸納資金,在第三季度的資金流入主要來自歐洲,但相較於前一個季度和去年同期有所下降。歐洲擁有最大的 ESG 資金管理規模,其次是美國,亞太地區就落後於這兩個地區。

事實上,ESG 本身是因氣候危機應運而生的概念,「經濟學人」智庫發佈的 2024 年風險展望,其中有兩點跟氣候變化有關,第一點是全球供應鏈恐受氣候風險影響,第二點是歐美的綠色經濟補貼恐會爆發成貿易戰。

值得憂慮的是,現在發生於世界各地的極端天氣事件,一直是「個別事件」且地理上孤立,但報告估計,未來有可能會以更同步的方式發生,比如嚴重的乾旱和熱浪可能會嚴重影響生產,導致糧食短缺,使全球供應鏈緊張並推高家庭成本;而在一些物理風險較高的地區,糧食短缺或會導致大規模移民,甚至戰爭,波及更多其他國家。

畢竟資本市場現在講求「去風險化」,西方經濟體可能會提高對中國進口產品的現有關稅,或加快對懸而未決的反傾銷和反傾銷調查的決定。客觀效果除了是推動高價格,還有就是換來中國的報復,比如會提高綠色經濟重要資源的出口(詳見「歐美要搶電動車電池生意,中國石墨不會墨守成規?」)。

由此可見,現在 ESG 在地緣政治也扮演著一定角色,成為發展中國家被撤資的催命符,到底碳排放大國可以如何應對呢?

強積金基金可以自行選擇投資恒指基金或恒指ESG基金嗎?

香港地球之友綠色金融顧問

近年ESG越來越受全球的重視,而港府與積金局亦鼓勵強積金計劃(MPF)的受託人在計劃中加入與ESG相關的成份基金。香港部份MPF受託人亦宣布推出ESG相關基金,但並非成立新產品,而是於強積金計劃旗下的成份基金作出變更,成為持有ESG主題的基金產品。

舉例來說,其中一個是由「恒生指數追蹤MPF基金」變更為「恒生指數ESG MPF基金」。基金的投資目標、政策及投資均衡性亦相應變更,並於近幾個月前生效。

 為方便讀者了解變動前後的差別,筆者嘗試作個比較:

(數據截至2023年10月31日)

恒指有80隻成份股,而恒指ESG只得68隻,剔走的主要是能源公司或電力公司,比如恒指裡的三桶油(即中石油、中石化、中海油)在恒指ESG裡就一桶都沒有保留。另外中電、電能等亦在恒指ESG中被消失了。

因ESG考量而被踢走的成份股有12隻,合共比重8.4%,這些比重就分配到剩餘的成份股。從行業分佈圖中可見,重新分配後的大赢家明顯是地產建築業,比重比在恒指高出了接近11個百份點。比較表現的話,由年初開始,雖然兩個指數都下跌,但原恒指比恒指ESG輸少約4個百份點(恒指-13% vs恒指ESG-17%)。

其實筆者對MPF選擇追蹤恒指或恒指ESG沒有特別意見。然而在整個轉換投資ETF(或背後追蹤指數)的過程中,相關MPF持有人到底有否被咨詢過或是否同意此變動,我實在不確定。

聽說還有其他MPF受託人計劃類似的變動,把追踪恒指的MPF換成追蹤含ESG考量的指數,以迎合市場重視ESG的要求及監管機構的計劃。此舉對在港推動ESG固然非常有用,目前強積金總淨資產約1.1兆港元(截至今年3月底),追蹤恒指MPF產品大概5-6%,即接近600億港元。不過作為MPF持有人,我們亦需要多留意市場變化及MPF受託人作出的通知。這樣才能有效管理MPF的資產及穩定性,以免被換了個投資標的也懵然不知。

COP28 – Will it be a successful year?

Green Finance Advisor of Friends of the Earth (HK)

It is very clear that humanity closes the books on the hottest year in 2023 on record, it’s worth asking whether the strategy is still working — and what might be lost by continuing to embrace it.

At COP28 in Dubai, 1.5°C will be front and center — in part because this year has offered a sobering glimpse of it. By early November 2023 had seen more than 80 days with temperatures at least 1.5°C above pre-industrial levels, according to the UN, along with second-order effects that include deadly wildfires, damaging flooding and historic drought.

“We are already unsafe and we have not reached 1.5°C yet,” says Rachel Cleetus, the policy director of the non-profit Union of Concerned Scientists’ Climate and Energy program. COP28 will also include the first “global stocktake,” a rigorous review of how country-level climate efforts are stacking up against Paris goals. The process, intended to inform the next round of national climate pledges due in 2025, is sure to highlight how few countries are moving as quickly or aggressively as is needed to keep 1.5°C within the realm of reality.

Never before has the finance industry attended a United Nations Conference of the Parties in such vast numbers, according to provisional registration data from the UN’s Framework Convention on Climate Change. Attendees include BlackRock Inc. Chief Executive Officer Larry Fink, as well as HSBC Holdings Plc CEO Noel Quinn and Brian Moynihan of Bank of America Corp.

They will be rubbing shoulders with numerous oil executives, which is another notable feature of this year’s talks. Sultan Al Jaber, president of the COP28 summit and head of the Abu Dhabi national oil company, Adnoc, has said he wants as many interests as possible represented to ensure a “successful” outcome. Against that backdrop, Darren Woods just became the first ever Exxon Mobil Corp. CEO to attend a COP since the summits started in the 1990s.

The mantra of this year’s summit is fast becoming that finance needs to go where emissions are, meaning it’s no longer feasible to blacklist firms that pollute, according to Huw van Steenis, vice-chair and partner at Oliver Wyman Inc. It’s about “financing emissions reductions” rather than just “reducing financed emissions,” he said.

Attendees will also turn their attention to the voluntary carbon market, which has been hit by a string of scandals that have raised serious questions as to the validity of the offsetting claims made by those buying carbon credits. Discussions on how to overhaul the voluntary carbon market come as executives from the world’s biggest banks and investment firms explore new funding structures and partnerships, as they use finance day at the COP28 climate summit in Dubai to devise viable pathways to a low-carbon economy.

Beijing ‘attaches great importance’ to COP28 decision to have 2035 carbon goals laid out within two years, climate envoy Xie Zhenhua says in Dubai. China will set up new emissions reduction targets for 2030 and 2035 as part of global pledges to fight climate change, the country’s top climate envoy said, while urging a greater push for methane control. On methane emissions, Xie says China is ‘willing to act’ but still lacks the capabilities, as he calls for global joint efforts.

Meanwhile, on December 6, Hong Kong hosted its first forum at the United Nations climate talks to promote the city as a green and sustainable financial centre. The event was co-hosted by the Financial Services Development Council and Friends of the Earth at the COP28 summit.

“We will co-host a forum at the China Corner side event of COP28,” said Plato Yip the chairman of Friends of the Earth in Hong Kong. “This marks a significant and meaningful milestone for our Hong Kong-based NGO Friends of the Earth as it is our first opportunity to deliver our message directly.”

We are looking forward to seeing a meaningful and fruitful outcome of COP28!