Deeper GBA ties: key to green transformation

Liu Yifan and Li Xiaoyun

Deeper GBA ties: key to green transformation

As China goes all-out to forge a carbon-efficient economy, closer green financial ties among cities in the Guangdong-Hong Kong-Macao Greater Bay Area will play a vital role.

Experts made the prediction at a thematic workshop during the annual Asian Financial Forum on Thursday, as they called for deeper collaboration and strengthened education.

The development of green finance is a key factor necessary for Hong Kong to build a sustainable and livable city, said Zhou Li, deputy editor-in-chief of China Daily Group and publisher and editor-in-chief of China Daily Hong Kong, in his welcoming remarks at the China Daily-sponsored event, themed “Exploring Cross-border Green and Sustainable Finance Opportunities in the GBA”.

“Leveraging its robust financial infrastructure, Hong Kong is positioned to facilitate the issuance of green bonds within the GBA. This not only allows overseas investors to access mainland bonds via Hong Kong but also contributes to global progress toward carbon neutrality,” said Zhou, who is also chairman of the Asia Leadership Roundtable.

In this endeavor, “the Hong Kong Special Administrative Region government’s cooperation with financial authorities throughout the GBA is essential”, he said.

Hong Kong has been leading the pack in sustainable financing and investment, with green bond issuance accounting for about one-third of the market share in Asia. In 2022, total green and sustainable debt arranged or issued in Hong Kong topped $80 billion, a year-on-year increase of over 40 percent, according to official figures.

Echoing the central government’s “3060” decarbonization goal of reaching a carbon peak before 2030 and carbon neutrality before 2060, the HKSAR government launched the Climate Action Plan 2050 in October 2021, outlining the strategies and targets for combating climate change and achieving carbon neutrality in four aspects — net-zero electricity generation, energy saving and green buildings, green transport, and waste reduction.

Today, a focal point of the country’s climate drive is to boost cooperation between Hong Kong and the rest of the GBA, whose mainland cities’ economic prowess complements the SAR’s advantages in financial services, said Fei Lau, senior vice-president of sustainability strategy, economics and strategic planning department at Bank of China (Hong Kong).

Nevertheless, joint efforts are needed to overcome hurdles such as rising land demands for green energy production and a lack of universal standards to measure the performance of green transformation, Lau said.

“If we want to achieve carbon neutrality, we have to see ourselves (in the GBA) as one ecosystem and mutually dependent on each other so that we can actually connect all the dots from Hong Kong and the mainland,” Lau told the packed exhibition hall.

Echoing Lau’s remarks, Meng Meng, senior adviser at the Green Development Institute, said there are “abundant” investment opportunities in green finance brought about by both the establishment of bilateral and multilateral carbon markets amid the global climate drive.

The prospects are incredibly vast as the carbon market encompasses diverse industries, she said. “It is essential to leverage the advantages of the GBA and collaborate to promote broader cooperation in carbon markets.”

Stan Ho Ho-ming, academic dean of the Institute of Sustainability and Technology, and an adjunct professor of the Faculty of Business and Economics at the University of Hong Kong, approaches the collaboration between Hong Kong and other cities in the GBA in the field of green finance from an educational perspective.

“In terms of the education for ESG (environmental, social, governance), we notice that most of the universities in the undergraduate and postgraduate have already offered ESG courses, not just in finance, but also in business, energy or even engineering,” Ho said.

“As the only city in the world that has five universities ranking in the top 100”, Hong Kong holds a significant role in leveraging education for the development of green finance and the entire spectrum of ESG, Ho said.

He said he hopes that students in Hong Kong go beyond just taking one or two relevant courses and instead to “be fully proficient in all aspects of ESG”.

In terms of curriculum design, Ho said he believes that universities should not only offer courses taught by regular faculty members, but attract industry insiders to share their expertise.

Given a significant number of mainland students pursuing graduate programs in Hong Kong and the presence of Hong Kong universities establishing campuses on the mainland, Ho said these connections can serve as a gateway for more students, including prospective ones from the mainland, to gain exposure to international practices in green finance and ESG through Hong Kong’s internationalized platform.

Ho also shared his insights on a survey conducted by the Hong Kong Trade Development Council, which involved 300 companies in the GBA. The findings showed that 65 percent of the surveyed enterprises have already adopted green practices, while the remaining 35 percent have plans to do so.

The firms also expressed their expectations for support in green development, with more than two-thirds of them indicating a desire for green financial services and products. “This is encouraging,” Ho said, adding that this aligns with the offerings that the green finance sector in the GBA can provide.