Signifying the major research collaboration across the two HKUST campuses in Clearwater Bay and Guangzhou, a joint research report series by The Hong Kong University of Science and Technology (HKUST) and The Hong Kong University of Science and Technology (Guangzhou) (HKUST(GZ)) analyzes Hong Kong’s progress and outlines steps to enhance its role as a green finance leader. The research team, composed of experts from both campuses, underscores the necessity for Hong Kong to refine its strategies. By doing so, the city could bolster its competitiveness in the international green finance landscape, thereby positioning itself as a preeminent center for green and sustainable bonds.
Titled “Hong Kong Green Finance Policy Research Series”, this three-part research report draws on a longitudinal study on Hong Kong and a large-scale field study in leading global green finance centers undertaken by the research team. Despite launching initiatives such as the Green and Sustainable Finance Grant Scheme and the Hong Kong Taxonomy for Sustainable Finance, Hong Kong's path to becoming a global green finance hub is at risk without a cohesive strategic narrative and systematic planning, noted the research team.
The study draws on a three-year analysis and field studies in global financial centers like London, Singapore, and New York. It suggests Hong Kong can improve its standing by articulating its strategic role as a bridge between Mainland China, the West and emerging economies, aligning with international trends, and adopting best practices from leading green finance hubs.
Extracting lessons for Hong Kong from these green finance centers, the research team identifies four critical imperatives for Hong Kong's transformation into a leading green finance hub:
1. Policy Formulation: formulating clear policies to articulate its green finance objectives and devise actionable plans to achieve them. The experience of global financial centers shows that the government should play a leading role in green finance reform and give clear policy messages about its decisions.
2. Collaboration Mechanisms: establishing coordinated mechanisms at all levels to foster collaboration and synergy across stakeholders. Such mechanisms need to balance the roles of government and the market. Regular meetings that invite stakeholders from both public and private sectors should be organized. Working groups with different purposes at different levels should be formed to create solutions to problems which emerge in the process of enhancing green and sustainable finance.
3. Financial Diversification: diversifying the financial system by tailoring green standards to its unique socio-economic landscape, and promoting interoperability with other markets.
4. Talent Cultivation: cultivating talent by prioritizing incentives for green finance education and engagement with international initiatives. The Government should formulate policies to directly stimulate the demand for green finance-related training, including both professional training and degree programs, and at the same time work with various institutions in and outside Hong Kong to provide relevant study courses and degree education to narrow the skills gap and strengthen capacity building.
The research team views positioning Hong Kong as a premier global hub for green and sustainable bonds as pivotal for its transformation into a green finance center. Specific actions Hong Kong can take to accelerate this transition include formulating a Hong Kong-labelled framework that provides guidance on harmonizing taxonomies, creating an integrated framework for green bond principles, increasing incentives for green bond issuance, developing a skills framework for green bond and green finance talent, and strengthening green bond infrastructure.
Prof. TAM Kar-Yan, Vice-President for Administration and Business, HKUST, added, "Our collaborative research offers crucial insights for positioning Hong Kong as a leading green finance center. By leveraging the expertise and perspectives of stakeholders across the region, we aim to build robust foundations for green finance in Hong Kong and the broader Greater Bay Area."
Prof. QI Ye, Acting Dean of Society Hub, HKUST(GZ), and Principal Investigator of the report series, stated, "Hong Kong is at a pivotal moment in its evolution as an international financial center. By embracing the global green agenda, we can enhance competitiveness and contribute to global sustainability efforts."
Prof. Christine LOH, Chief Development Strategist of the Institute for the Environment, HKUST, emphasized, "Collaboration is key to advancing Hong Kong’s green finance development. Aligning academic research with practice generates impactful recommendations, especially if efforts are focused on Hong Kong’s own opportunities, such as in buildings, energy, maritime, and nature-based sectors. These sectors also have enormous global relevance."
Prof. Coco DU, Associate Professor of Practice of the Carbon Neutrality and Climate Change Thrust, HKUST (GZ), and lead author of the report series, noted, "Our research strengthens the connection between science and policy, aiming for closer collaboration with the Hong Kong Government to enhance the green finance ecosystem."
Supported by the Strategic Public Policy Research Funding Scheme, which is administered by the Chief Executive’s Policy Unit, and the Theme-based Research Scheme by the Research Grants Council, this joint research continues to develop actionable strategies for Hong Kong and the Greater Bay Area’s green transition. HKUST and HKUST(GZ) will continue to support this mission through research as well as workshops and engagement activities across sectors in the region.
Read the full three-part report at the following links:
1. Hong Kong in Transition: A Paradigm Shift Towards a Green and Sustainable Finance Center
2. Hong Kong’s Transition Towards a Green and Sustainable Finance Center: Building a World Top Green and Sustainable Bond Hub
3. International Experiences in Green Finance Development: Lessons for Hong Kong
About The Hong Kong University of Science and Technology
The Hong Kong University of Science and Technology (HKUST) (https://hkust.edu.hk/) is a world-class university that excels in driving innovative education, research excellence, and impactful knowledge transfer. With a holistic and interdisciplinary pedagogy approach, HKUST was ranked 3rd in the Times Higher Education’s Young University Rankings 2024, while 12 of its subjects were ranked among the world’s top 50 in the QS World University Rankings by Subject 2024, with "Data Science and Artificial Intelligence" being ranked first in Hong Kong and 10th in the world. Our graduates are highly competitive, consistently ranking among the world’s top 30 most sought-after employees. In terms of research and entrepreneurship, over 80% of our work was rated “internationally excellent” or “world leading” in the latest Research Assessment Exercise 2020 of Hong Kong’s University Grants Committee. As of October 2024, HKUST members have founded over 1,800 active start-ups, including 10 Unicorns and 14 exits (IPO or M&A).
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