Building a World Top Green and Sustainable Bond Hub

120 100 80 60 40 20 0 2014-2019 2020 2021 2022 2023 Billion US dollars 8 Hong Kong’s Transition Towards a Green and Sustainable Finance Center: Building a World Top Green and Sustainable Bond Hub in early 2024, the HKMA and PBoC announced measures to deepen cooperation, including expanding collateral range. Third, Mainland China takes the largest proportion of the green bond issuance market, bringing vast opportunities for Hong Kong’s green and sustainable financial transition. China’s issuance of green bonds has been steadily increasing since 2014, with a slight slowdown only in 2020. In 2022, China issued over 86.6 billion US dollars green bonds that meets the Climate Bonds Standard, making it the largest issuer worldwide. In 2023, China’s issuance was 83.5 billion US dollars, slightly lower than the previous year (Figure 1). While the issuance volume has slightly narrowed, China has maintained its position as the world’s largest green bond issuance market for the second consecutive year and has further integrated with the international market. China’s rules for green bonds were updated in mid-2022 to align further with the Green Bond Principles of the International Capital Market Association (ICMA), requiring issuers to use 100% of proceeds on environment-protection projects, up from 70% previously. Notably in 2023, Hong Kong experienced the largest increase, growing by 173.3% year over year and making it to the top ten leaderboard for the first time. As of the end of 2023, China had issued in total 372 billion US dollars which meets the Climate Bonds Standard; the volume of labelled green bonds in domestic and overseas markets reached 616.2 billion US dollars. China Green Bond Issuance Figure 1: China Green Bond Issuance Aligned with the Climate Bonds Standard from 2014 to 2023 (Source: By the research team based on the China Sustainable Debt State of the Market Report 2023. Note: The data from 2014 to 2019 is presented in an aggregated format due to the lack of annual data.) We believe that further positioning Hong Kong as a premier global green bond hub represents a pivotal transformational step for the city to gradually build up its green finance system. Then the question is how can Hong Kong realize this goal? What is the market like now? What are the actions that Hong Kong needs to take?