A Paradigm Shift Towards a Green and Sustainable Finance Center

32 Paradigm Shift and the Shared Belief 4.2 The Paradigm Shift and New Shared Belief Regaining the structural balance means preserving Hong Kong’s pivotal role for the most sophisticated financiers and traders from foreign and Chinese business networks. Hong Kong’s paradigm shift for green and sustainable finance represents an effort to realize a new balance that appeals to the international world again. 4.2.1 Global Consensus in Green Development In the waves of continued economic and political polarization, climate change stands as an indisputable fact. The report of the Provisional State of the Global Climate 2023 by the World Meteorological Organization (WMO) confirms that 2023 was set to be the warmest year in the 174-year observational record. Data until the end of October 2023 shows that the year was about 1.4 degrees Celsius (with a margin of uncertainty of ±0.12°C) above the pre-industrial 1850-1900 baseline. The past nine years, 2015–2023, will be the nine warmest years on record. In the World Economic Forum (WEF)’s Global Risk Report 2024 , extreme weather is ranked as the top risk in 2024. Such weather events are considered the 2 nd severest risk in the next two years and the severest risk in the coming ten years. In the long-term perspective of ten years, among the global top ten risks, there are four risks associated with changes in the environment. Action to tackle climate change is far fromadequate but it is fast developing. In September 2015, all members of the United Nations General Assembly signed the Sustainable Development Goals, aiming at promoting economic prosperity while protecting the planet and curbing climate change. The Paris Agreement, adopted in December 2015, sets the target to strengthen global capacity to respond to the threat of climate change, limit the rise of global temperature this century within 2 degrees Celsius compared to pre-industrial levels, and bring capital flows in line with the path of low greenhouse gas emissions and climate-resilient development. In December 2019, the European Union (EU) issued the European Green Deal , proposing to take the lead in achieving global carbon neutrality by 2050. In September 2020, President XI Jinping pledged to strive for China’s carbon dioxide emissions peak by 2030 and carbon neutrality by 2060. Hong Kong proposed its own plan to become carbon neutral by 2050. A growing coalition of countries, cities, businesses and other institutions is pledging to get to net-zero emissions. By mid-2023, 149 countries or territories have set a net-zero target, covering about 88% of global emissions. More than 9,000 companies, over 1000 cities, more than 1000 educational institutions, and over 600 financial institutions have joined the “Race to Zero”, pledging to take rigorous, immediate action to halve global emissions by 2030. In the coming decades, the world is ushering in an era of carbon neutrality. In the case of the EU, starting with the integration of sustainability principles into policies in the early 2000s and the launch of the Europe 2020 Strategy in 2010, it has steadily progressed towards a low-carbon economy. The introduction of the Sustainable Finance Action Plan in 2018 and the ambitious European Green in 2019 further emphasized sustainability goals. In 2020, the EU Taxonomy provided clarity for investors, while the 2021 Sustainable Finance Action Plan 2.0 reinforced the importance of considering environmental, social, and governance factors in investment decisions. In June 2023, the European Commission unveiled an updated sustainable finance package designed to bolster the current EU sustainable finance framework