International Experiences in Green Finance Development

14 International Experiences in Green Finance Development: Lessons for Hong Kong There are 3 pillars of green finance strategies in the UK including (1) greening finance, to mainstream climate and environmental factors as a financial and strategic imperative; (2) financing green, to mobilize private finance for clean and resilient growth; (3) capturing the opportunity, to cement the UK’s leadership in green finance. The importance of high-level economic policy signals has been highlighted as a key driver in shaping the green financial framework, and ensuring the alignment of economic signals with the goals of transition is critical to fostering strong conviction and commitment. Firstly, the British government has incorporated climate financing into the law. The introduction of the British Climate Change Act clarified the British government’s commitment and goals in addressing climate change, providing a legal basis to support the development of green finance. Secondly, the government has also issued a series of strategic documents and policy documents to ensure the successful implementation of the green finance development strategy. This Strategy, released by the British government in 2019, expounds how the British government should promote the development of green finance from three aspects: macro strategy formulation, practical operation, and international cooperation; the document Greening Finance: A Roadmap to Sustainable Investing assesses the progress based on the 2019 strategic design and develops a three-stage roadmap; the UK Government has updated its 2019 strategic plan to outline how it will mobilize the necessary investments to meet climate and nature goals in the current context. Thirdly, independent regulatory agencies responsible to the public sector of the government are in charge of supervising different sectors of the financial market to ensure an orderly situation. They also play an important role in the process of building a green finance hub. Among them, the Financial Conduct Authority (FCA) is responsible for regulating and supervising financial markets, including banks, insurance companies and other financial institutions; the Financial Reporting Council (FRC) formulates and enforces accounting, auditing and corporate governance standards; the Pensions Regulator regulates and supervises corporate pension schemes in the UK; the Prudential Regulation Authority (PRA) regulates and supervises the stability and risk management of banks, insurance companies and financial markets. 2.2 Market, Government and Civil Society All Play Indispensable Roles What deserves special attention is the UK government’s policymaking process which brings together stakeholders across different sectors. Ideas and voices outside the government often can be well integrated into the policy. Such an approach is critical to provide infrastructure to support the development of a sound green finance ecosystem. Below is a table that shows some of the key stakeholders that we observed in the green finance ecosystem in London (Table 2).