Financial Secretary Paul Chan on Monday said that initiatives by the Hong Kong Monetary Authority (HKMA) to expand the taxonomy for sustainable finance are pivotal to scaling up capital flows to accelerate green transformation.

The HKMA launched another phase of public consultation on Monday aimed at supporting Hong Kong's decarbonisation efforts, facilitating the region's transition to a low-carbon economy, and reinforcing the city's position as an international financial centre and a leading green finance hub.

"By providing clear, transparent, and robust definitions of what constitutes green and sustainable activities, the taxonomy aims to scale up relevant capital flows while addressing greenwashing concerns," the HKMA said.

"Today, the Hong Kong Monetary Authority (HKMA) begins a public consultation to expand this taxonomy to cover transition finance. Other elements include expanding sector coverage and introducing climate change adaptation. These are pivotal to scaling up capital flows to accelerate green transformation," Chan told a green finance forum.

He said Hong Kong remains steadfast in its commitment to climate action, citing the city is on track to cut carbon emissions in half by 2035, and achieve carbon neutrality by 2050.

"There is only one earth, one planet that we all share. While the world may be facing substantial geopolitical challenges, Hong Kong is fully committed to becoming a reliable and resourceful partner in the global green transformation," he said.