International Experiences in Green Finance Development

6.1 Top-level Policy Design: Incorporate Sustainable Development into the Green Policy System, and Release Clear High-level Policy Signal The practical experience of Singapore, London and New York shows that the government should play a leading role in green finance reform and give clear policy messages about its decisions. The government is placed at the central position to systematically design top-level policy, no matter what type of regime it is. At the same time, it is important to combine the concept of natural value with the idea of natural capital. That is to say, the sustainable development concept – development that meets the needs of the present without compromising the ability of future generations to meet their own needs – must be integrated into the design of green finance policy and implemented consistently at all levels. The ideology that green finance serves the actual needs of sustainable development should never be overlooked. In addition, the government should continue to strengthen the delivery of its policy message in order to activate various departments’ participation in the green transition on the one hand, and signal these policies to the market and the public on the other. Incentives and workable mechanisms thus can be arranged in a way that suits the specific region’s governance style. In Singapore’s case, the MAS clearly stated the goal of building Singapore into an Asian and international green finance center in its 2019 Green Finance Action Plan. Moreover, the organization proposed the Net Zero Financial Action Plan in 2023, which incorporates transition finance into the framework of green finance policy to further strengthen the green finance ecosystem in Singapore. It is worth noting that the Singapore government has made it clear that it is committed to the development of green finance with a deeper level intention to accelerate Singapore’s green economic transition. Such a signal has prompted stakeholders, regardless of their roles in the green finance ecosystem, to firmly believe that their work in this type of finance is on the right path. At the same time, Singapore has supplemented a series of economic incentives to induce sustainable investment, including mobilizing state-owned enterprises to lead and setting up funds to drive changes across the entire financial sector. In the case of London, the development of green finance system relies on a mechanism that combines top-down direction and policies with bottom-up participation. The UK is the first country in the world to enact a climate change bill and enshrine net zero emissions into law, and London has been a pioneer and leader in green finance policy. Its top-level design comes in a “One Bill and Two Strategies” structure. In terms of the bill, the British government passed the Climate Change Act in 2008 and revised it in 2020, which incorporated the goal of “achieving net zero emissions by 2050” into the legal framework. This shows the determination of the country to achieve sustainable development and also provides legal basis for the development of green finance. In terms of strategies, the British government clearly proposed three green finance goals, and they are greening finance, financing green and capturing the opportunity in the Green Finance Strategy: Transforming Finance for a Greener Future, released in 2019. Furthermore, the British government updated its strategic plan of 2019 and released Mobilizing Green Investment: 2023 Green Finance Strategy in 2023, which assessed the phased progress and updated the strategic design. Under the two pillars of “Align (greening finance)” and “Invest (financing green)”, specific action plans have been formulated to work with various stakeholders and improve all aspects of green finance development. The UK government’s emphasis on the relationship between people and nature has been reflected across its 50 International Experiences in Green Finance Development: Lessons for Hong Kong