International Experiences in Green Finance Development

12 International Experiences in Green Finance Development: Lessons for Hong Kong London is a leading green finance center in the world and one of the top international financial centers. The United Kingdom has set the goal of net-zero carbon emission in 2050 and developed a series of green finance policies progressively to ensure legitimacy. The UK government’s policy process involves collaboration among various departments, regulators, and the private sector. Working groups and task forces are formed to address specific issues, and the government actively seeks input from private finance experts. There is a cultural affinity for environmentalism in the UK, reflected in consumer and business demand for climate-friendly actions and the prioritization of climate change and environmental issues in political voting patterns. The involvement of businesses is driven by their awareness of climate change risks and opportunities. The presence of political leadership and clear regulatory direction further motivates businesses to engage and shape policies that are practical and beneficial for them. At themacroeconomic level, the two foundations of green finance in the UK are the government’s strong promotion and the steering power of the laissez-faire market. The former is top-down legitimacy, the latter is bottom-up mobilization. At the microeconomic level, the UK has built a multi-agent model of wide and sufficient participation. A solid culture and belief in environmental protection and the nature-human relationship has long been rooted in UK society, which has laid the foundation for a social consensus. The political parties’ promises regarding climate change are in compliance with this environmental consensus. In addition, the institutional transformation, talent pool of diverse sectors as well as national energy security have also laid the ground. Actors of civil societies have shown a strong interest in green finance. In addition, enterprises pay a lot of attention to climate risk mitigation, reputation, peer influence, income, opportunities and alternative costs. 2.1 The UK Has Regulated Green Finance Through Legalization and Public Policy The legalization of green finance can be traced back to 2008 when the Climate Change Act was issued, which set the basis for the UK’s approach to tackling and responding to climate change. The practical strategy for green finance started in 2019 (Table 1) and developed further into different policies targeting specific topics related to green taxonomy, sustainable investment and government framework. It focuses on the roadmap and the mobilization of green investment to enable growth. Table 1: Key Green Finance Policies in Last Three Years in the UK Time Policy Content Institution Jul 2019 Green Finance Strategy: Transforming Finance for a Greener Future The Strategy explains how the British government should promote green finance through three aspects: macro strategy formulation, practical operation, and international cooperation. HM Government