The Hong Kong Monetary Authority (HKMA) launched on Monday a public consultation on the next phase of development of the Hong Kong Taxonomy for Sustainable Finance as the city moves to expand definitions for green and transition activities.

The taxonomy is designed to provide clear, transparent definitions for what constitutes green and sustainable activities with the aim of scaling up capital flows while addressing greenwashing concerns, the HKMA said.

Phase 2B prototype adds 10 new economic activities that, together with the recategorisation of some phase 2A activities, brings the total from 25 to 39 and introduces technical criteria for both green and transition measures.

The updates focus on enabling technologies such as battery manufacturing and recycling, as well as low-carbon technologies.

They also provide transition pathways for hard-to-abate sectors, including air transport and iron and steel.

The prototype also enhances the methodology for climate-change adaptation by introducing a process-based approach, given the location-specific nature of such measures.

The initial focus is on shoreline protection and flood management, which are closely tied to key climate risks facing Hong Kong.

The consultation runs until October 7.


Edited by Edmond Fong