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The Hong Kong Monetary Authority ( HKMA ) has launched on September 8 a public consultation on its update of the territory’s sustainable finance taxonomy, which regulates sustainable activities and is a key enabler for the city to scale up sustainable capital flows.
This, phase 2A prototype of the Hong Kong Taxonomy for Sustainable Finance, is the first major update since the taxonomy’s initial launch in May 2024. The proposed update brings a series of enhancements, including:
The consultation will run for one month until October 8.
Phase 1 of the taxonomy covered the four key sectors with the greatest decarbonization needs – energy, transportation, construction and waste. And phase 2A now proposes the addition of two more sectors – manufacturing, and information and communications technology.
The new sectors will set clearer pathways for economic activities, such as hydrogen and alumina production, and data-driven decarbonization solutions, such as green data centres.
As well, some new activities are also added to the original four sectors, such as transmission and distribution of electricity, and low-carbon transport infrastructures. This will see the number of sustainable economic activities increase to a total of 25, up from the original 12, and many of them are transition activities, activities that are less straightforward than traditional green activities, but are still essential to achieve sustainability.
Finally, the role of climate-change adaptation is accentuated as a new environmental objective in the taxonomy, facilitating Hong Kong's effort to establish a pragmatic, locally relevant and scalable foundation to define adaptation-related investments.
The water sector will be a priority focus in phase 2A, given the city’s susceptibility against storm damages and water stresses.
September 8 also marks the opening of Hong Kong’s Green Week with the eighth Hong Kong Green Finance Association ( HKGFA ) Annual Forum, a flagship event that brings together global leaders with the aim of accelerating climate action and sustainable finance. The forum kicked off on the very same day the city was hit by a Tropical Cyclone Warning Signal No 8 – the third such alert this year – underscoring the stark reality of climate change and its escalating threats, and the necessity of transition acceleration.
“Hong Kong obviously has the potential to become a [global] transition finance hub by helping hard-to-abate sectors to decarbonize.” says Paul Chan Mo-po, the territory’s financial secretary, speaking during his opening remarks at the HKGFA forum, emphasizing that the updated taxonomy will be “pivotal to scaling up capital flows”.
Despite the geopolitical uncertainties, Hong Kong is still well-positioned Asia’s sustainable finance hub. In the first half of 2025, Hong Kong, according to HKMA data, issued more than US$34 billion in sustainable debt, representing a 15% year-on-year growth.
