Building a World Top Green and Sustainable Bond Hub

36 Hong Kong’s Transition Towards a Green and Sustainable Finance Center: Building a World Top Green and Sustainable Bond Hub 4.5 Action 5: Strengthen Infrastructure with Fintech In view of its role as the world’s leading offshore Renminbi green bond center, Hong Kong should give priority to improving the infrastructure for issuance and the listing of Renminbi offshore green bonds. As early as 2018, the HKEX pointed out that the lack of Exchange- Trade Fund aligned with the mainland Green Bond Index is due to be filled, so that investors can trace and lift the fluidity of mainland green bonds. This is highly practical. Mainland China has launched the China Bond Indices for its green bonds and carbon neutrality green bonds. The HKEX can develop its own index to capture information about Renminbi offshore green bonds and help investors trace their performances. Besides, the HKEX can consider giving public listing guidance for mainland issuers and streamlining the offshore bond issuance procedure, in order to attract more mainland players. In terms of long-term strategy, Hong Kong can use financial technology (fintech) to facilitate green transformation. The development of fintech has driven continuous innovation of global financial services, and the Hong Kong Government attaches great importance to promoting the fintech industry. The HKMA announced the Fintech 2025 Strategy in June 2021, driving the financial industry to fully apply fintech by 2025. At the same time, the government launched the world’s first batch of tokenized green bonds in February 2023, and the second batch in February 2024. The initiative strives to facilitate industry innovation, a comprehensive and balanced regulatory framework, and a risk-based regulatory direction. Through these measures, the industry has created stable and favorable conditions for fintech development. The latest version of the Report of the Steering Committee of Bond Market Development in Hong Kong suggests that one of the focuses of global attention in the next few years will be fintech. Therefore, Hong Kong should strive to be at the forefront of fintech-integrated international green bond hubs. It is recommended that the Hong Kong Government uses financial technology to help the city become the world’s top green bond center. Currently, Project Genesis, initiated by the Bank of International Settlement and the HKMA, has lowered the investment threshold for green bonds through green bond tokenization, which is an excellent example of this strategy. The Hong Kong Government should further promote relevant work and use financial technology to improve its database to effectively solve the problem of opaque information between investors and financing parties in the current green bond market, and provide more support in supervision, information disclosure, and product innovation, in order to guarantee the healthy development of green bond financial products in Hong Kong.