Climate Change: Net Zero Organisation GFANZ to Open Hong Kong Chapter to Support Asia’s Green Finance Development

The Glasgow Financial Alliance for Net Zero (GFANZ), the world’s largest coalition of financial institutions committed to the goal of net zero emissions by 2050, will open a chapter in Hong Kong to accelerate decarbonisation in the Asia-Pacific region, the organisation announced on Thursday.

The Hong Kong chapter, as part of GFANZ’s broader Asia-Pacific network launched last June, will collaborate with financial institutions in China on net-zero efforts, including transition planning and building the scale of transition finance. It will work with local sustainable finance initiatives such as the Hong Kong Green Finance Association (HKGFA) and will be advised by Eddie Yue Wai-man, CEO of the Hong Kong Monetary Authority, and Ma Jun, chairman of the HKGFA.

“With Hong Kong’s unique role as a gateway to mainland China and our vibrant green finance ecosystem, I am confident that the chapter will contribute meaningfully to GFANZ’s efforts in building capacity among financial institutions in this part of the region to support their net-zero transition,” Yue said.

GFANZ will open a physical office in Hong Kong in late 2023 or early 2024 and form a consultative group of leaders from the region to convene financial institutions from Greater China to support their work on transition planning and scaling transition finance, according to the group.

“Transition finance will be the next big theme for sustainable finance development globally, especially in Asia,” Ma said. “Effective delivery of transition finance solutions requires collective efforts to raise awareness and develop tools and methodologies.”

Founded in April 2021 during the COP26 climate conference in Glasgow by Mark Carney, UN special envoy on climate action and finance, GFANZ aims to expand the number of net zero-committed financial institutions and to establish a forum for addressing sector-wide challenges associated with the net-zero transition. It now has over 650 institutions across the financial sector, including banks, insurers, asset owners, asset managers, financial service providers and investment consultants, spanning 50 countries and representing 40 per cent of global private financial assets.

Hong Kong, which has declared an ambition to become an international green tech and green finance centre, aims to attract green enterprises and start-ups to set up operations in the city, build a green technology ecosystem and encourage academic as well as industry research. The government plans to issue at least HK$15 billion (US$1.9 billion) in retail green bonds during 2023, Financial Secretary Paul Chan Mo-po said in February. The government raised HK$20 billion from the sale of such debt last year.

China, which is the world’s largest greenhouse-gas emitter and has committed to peak its national emissions by the end of this decade and reach net-zero emissions by 2060, has led global energy transition investment, spending US$546 billion in 2021, according to research firm BloombergNEF. It was also the largest green bond issuer last year, with US$85.4 billion of offerings, according to the non-profit Climate Bond Initiative.

The country also leads the world in renewable energy development, having promised to get 80 per cent of its total energy from non-fossil fuel sources by 2060 and to have 1,200 gigawatts of solar and wind capacity by 2030. In 2022, China contributed almost half of all global deployment in renewable capacity, according to the International Energy Agency. Analysts expect China to hit its renewable capacity target five years early.

The worldwide sustainable finance market amounted to US$1.37 trillion last year, according to data provider Refinitiv. Hong Kong accounted for US$46.8 billion of this, mainland China US$93.9 billion and Asia-Pacific, excluding Japan, US$263.4 billion.

“Home to many of the world’s largest and fastest-growing economies, the Asia-Pacific region is central to the world’s efforts to achieve a net zero global economy,” said the UN’s Carney. “And those efforts rely on the availability of large-scale finance.”

The new Hong Kong chapter will build on GFANZ’s ongoing work in Asia-Pacific and create tools and tailored guidance for local financial institutions to support their net-zero transitions, he said.

Learn more: South China Morning Post