Building a World Top Green and Sustainable Bond Hub

27 Challenges for Hong Kong’s Transition Towards the Green and Sustainable Bond Hub human capital to be implemented. The business sector players such as banks, listed companies, small and medium-sized enterprises also need green talent to help with complete green financial product design, ESG risk management, ESG information disclosure and so on. According to the Sustainable Finance and Investing Survey conducted by the HSBC, the lack of green expertise or staff is a barrier to broader and comprehensive ESG investing by Asian investors. In addition, human capital has always been regarded by market participants as an important factor in evaluating green financial centers. According to the GGFI, the availability of professionals, flexibility of the labor market and human capital governance are all considered important indicators for evaluating a green financial center. Hong Kong also suffers from green finance talent shortage. According to a survey on 55 senior green and sustainable finance executives conducted by the HKUST Business School, “talent recruitment and retention” is one of the most pressing issues that Hong Kong’s green finance industry is facing. A total of 80% of respondents agreed that recruiting green and sustainable finance talent is more difficult than recruiting people for other job positions. The shortage of green talent in Hong Kong is well reflected in the banking industry. According to the Banking Industry Talent Training and Development Survey released by the Hong Kong Institute of Bankers (HKIB) which sampled 1,000 stakeholders, a talent management and skill gap in Hong Kong’s banking industry is on the rise. Altogether, 85% of the stakeholders held the opinion that there is a gap in relevant skills related to green and sustainable finance. 3.5 Insufficient Infrastructure Financial market infrastructure includes the financial asset registration and depository systems, clearing and settlement system trading facilities, and basic credit investigation systems. The quality of such facilities and systems has made Hong Kong well-known for its infrastructure construction. According to the HKMA, Hong Kong’s financial infrastructure includes three categories: the payment and bond settlement systems, local and overseas system networking, covering settlement of inter-bank payment transactions, bond settlement and custody, domestic and external system linkages to provide payment-versus-payment and delivery-versus-payment services, locally and across the border respectively. The rise of green finance requires additional infrastructure which has led some financial centers to launch facilities such as green exchanges, green indexes, and green channels. As early as 2016, Luxembourg launched the Luxembourg Green Exchange, the world’s first platform dedicated to sustainable finance. This Exchange lists 50% of the world’s green bonds, and investors can freely access the documents of relevant green and sustainable products to make investment decisions. Currently, the coverage of the Luxembourg Green Exchange has expanded from green to green and sustainable and the information the platform provides has gradually been diversified. In addition to providing relevant information, other bond exchange platforms have launched green indexes and green channels to support local green and sustainable markets. The Singapore Exchange launched the low-carbon index in 2022, tracking 50 companies registered and listed in Singapore and globally, so as to provide investors with relevant