Financial Secretary Paul Chan on Wednesday said Hong Kong should position itself as Asia's leading green financing hub due to it making significant strides in green and sustainable finance.

Citing the size of green bonds and debts, and the number of green funds setting up in Hong Kong over the past three years, Chan expressed optimism about the city's potential to emerge as a leading hub in Asia for transition finance -- which seeks to support high-emission sectors in their journey towards sustainability.

"Hong Kong already has a very strong foundation to develop the transition finance market – including a robust regulatory framework, the necessary financial infrastructure, a well-developed market, and expertise on standard-setting and compliance. What we need now is to raise the awareness of the necessity of transition finance and the potential it offers," Chan said.

He also addressed the importance of developing a taxonomy for sustainable finance. He said the Hong Kong Monetary Authority (HKMA) is working on a taxonomy that will incorporate transition activities, with plans for public consultation in early 2025.

Chan emphasised the need for improved sustainability disclosures at the company level to enable investors to evaluate corporate commitments to environmental standards. He said Hong Kong aims to align its local sustainability disclosure requirements with those set by the International Sustainability Standards Board (ISSB).