NPC deputy urges deeper cooperation over green finance
Hong Kong and the mainland should enhance collaboration to support the development of green finance, said Lui Tim-leung, chairman of the city’s Securities and Futures Commission and a deputy to the National People’s Congress, the country’s top legislature.
He said there is still much work needed to fully link the mainland’s financial market with international ones, due to differences in systems and infrastructure construction, while Hong Kong, as an international financial center, could act as a bridge between the two.
During the annual two sessions of the NPC and the Chinese People’s Political Consultative Conference National Committee in Beijing, Lui met with Yi Huiman, the newly appointed chairman of the China Securities Regulatory Commission. They agreed to deepen cooperation and expand cross-boundary connections to more capital products, according to Lui.
He mentioned the development of green finance in particular needs more cooperation in order to jointly participate in establishing international standards and rules and increase the country’s voice on the world economy stage.
In addition, Lui said, the rapid increase in recent years in the number of companies listed both on the mainland and in Hong Kong has elevated the urgency for the two capital markets to unify supervision standards of information disclosure.
For example, companies listed on the Shanghai and Shenzhen stock exchanges released far fewer environmental, social and governance (ESG) reports than their Hong Kong counterparts.
Therefore, Lui suggested in his proposal to the second session of the 13th NPC to further integrate information disclosure requirements step by step, such as the report mechanism of ESG.
Another aspect is the standardization of green bonds, which the mainland is exploring. The People’s Bank of China and National Development and Reform Commission have unveiled their own guidance documents.
Lui said the next step is to unify these evaluation standards, a process Hong Kong could help with based on its own experiences and practices.
Since 2016, the Hong Kong Quality Assurance Agency has developed the Green Finance Certification Scheme to provide third-party conformity assessments for green finance issuers, including bond products.
As a strategic tool for promoting the economic development and regional cooperation in the Guangdong-Hong Kong-Macao Greater Bay Area and along the Belt and Road Initiative, the plan was mulled with reference to both widely recognized international and national standards, as well as consideration of features in these green finance markets.
Lui hoped the two sides could promote green certification schemes together.
The national strategy to develop the Bay Area could be a new chance to deepen cooperation in the industry. Its outline development plan released last month by the central government calls for supporting Hong Kong to grow into a green finance center in the area.
According to a report by Hong Kong Quality Assurance Agency, the potential growth opportunity of sustainable financing in the Bay Area is huge as green bonds issued in the area account for only 5.6 percent of the total in China, the world’s secondlargest issuer, while the GDP percentage in global total is 12 percent.
The report finds the key investment directions in the Bay Area are energy efficiency, resource conservation, recycling and clean transportation.
The SAR government also has shown its firm support for the development of green finance, such as a HK$100-billion government green bond program announced last year.
The development of green finance in particular needs more cooperation in order to jointly participate in establishing international standards and rules.’’ Lui Tim-leung, chairman of the Securities and Futures Commission and NPC deputy