Building a World Top Green and Sustainable Bond Hub

24 Hong Kong’s Transition Towards a Green and Sustainable Finance Center: Building a World Top Green and Sustainable Bond Hub Table 2: Procedure for Green Bond Issuance and Listing in Hong Kong Issuance procedure Listing procedure 1. Issuer-defined green bonds framework • Purpose: to define how the project satisfies the “recognized green project category” • Evaluation and selection: to judge if the project complies with the above-mentioned green project category evaluation standards, and elaborate the selection process • Fund management: to set the account and procedure to direct and distribute earnings • Report: to establish reporting procedures 2. External review of issuers • Second party’s advice/authentication/ certification/green ranking (not mandatory, multiple options) 3. Work after issuance • External review after issuance (not mandatory) • Sustainability-related information disclosure (not mandatory) • Environmental impact report release (not mandatory) 1. Settle bonds category 2. List international principles or standards for bonds 3. Provide bonds issuance notice and additional pricing document if any 4. Provide framework for bonds 5. Provide external inspection report for bonds framework 6. Provide annual report during bonds annual term and elaborate the distribution and expected impact of funds (if any) However, there are differences among specific requirements of the above-mentioned principles or standards for green bonds. The general GBP designed by the ICMA plays a crucial role in providing basic principles, as most other standards are based on how it is designed. It includes two main parts: a framework and an external review. The framework consists of four core elements: fund use, project evaluation and selection process, fund management and reporting, providing voluntary requirements for (1) a recognized scale and percentage of green projects; (2) a selection and decision-making procedure for green projects; (3) management requirements for green bonds and (4) information disclosure of green bonds. In the External Review section, the GBP strongly recommends that issuers appoint an external review agency to confirm that green bonds or green bond plans or frameworks follow the above four core elements. The China GBP and European Green Bonds Standards are designed on the basis of the GBP. On the other hand, the CBS by