From left: The moderator and Chief Executive Officer of HKEX Nicolas Aguzin, Co-Chief Executive Officer of KKR Joseph Bae, President, Chair of the Board of Directors of Asian Infrastructure Investment Bank Jin Liqun, Chief Executive Officer of Personal Banking & Wealth Management of Citigroup Anand Selvakesari, and Chief Executive Officer of BNY Mellon Investment Management Hanneke Smits, pose for a photo after a panel discussion on sustainable finance. (ANDY CHONG / FOR CHINA DAILY)
The development for sustainable finance in Asia is catching up fast with the rest of the world, injecting new momentum into Hong Kong as a financial center, experts told the Global Financial Leaders’ Investment Summit on Wednesday.
Hong Kong has the vision to become a premier center for green and sustainable finance, serving the green transformation in the Chinese mainland, the region and the world, Financial Secretary Paul Chan Mo-po said in his keynote speech at the summit.
“We are seeking to adopt a green classification framework along the Common Ground Taxonomy. Green bonds issued in Hong Kong are trusted by global investors,” he said.
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Green and sustainable debts issued or arranged in Hong Kong reached more than $56 billion in 2021, four times that of the previous year, and the highest in Asia. Chan vowed to encourage the development of green finance, saying, “we continue to provide expenses subsidies for eligible issuers and borrowers for their borrowings in Hong Kong.”
Financial Secretary Paul Chan Mo-po delivers a speech during the Global Financial Leaders’ Investment Summit on Wednesday. (ANDY CHONG / FOR CHINA DAILY)
Hong Kong aims to achieve carbon neutrality by 2050 as part of the surge to reduce global carbon emissions. With its unique connectivity with the Chinese mainland and the world, Chan said he has full confidence in the development of Hong Kong as a green financial center.
In a panel discussion at the same summit, experts said that sustainable financial development in Asia is breeding rising investment opportunities.
Although some in the sustainable investment community point out that Asia is lagging behind other regions when it comes to promoting sustainable investment practices, Hanneke Smits, CEO of BNY Mellon Investment Management — a leading wealth management and investment servicing firm — said the region is feeling the effects of climate change and is catching up at a fast pace.
“Both from an investment-required perspective as well as what we’re seeing from our clients, we are seeing an increasing desire and need for sustainable investment objectives to be integrated into portfolios,” Smits said.
HKMA Chief Executive Eddie Yue Wai-man welcomes guests to the summit. (ANDY CHONG / FOR CHINA DAILY)
Asia’s economies are projected to grow faster than elsewhere in the world. Because of their dependence on energy, they will need more capital than developed markets do to truly achieve a greener future, she said. Smits said she believes an opportunity exists in Asia to make some investments that are less carbon intensive and that provide good opportunities in a sustainable chain.
Joseph Bae, co-CEO of US-headquartered alternative investment firm Kohlberg Kravis Roberts, agreed with Smits. He said there are incredible investment opportunities today when the focus is on sustainability, and this brown to green transition is going to create tremendous value.
Bae predicts that Asia will be the world’s leading force in making real progress around carbon and decarbonization. “Given the growing energy consumption, the demographics and the young populations, this is going to be both an enormous challenge for Asia, but also a tremendous opportunity for investment,” Bae said.
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As countries are at different stages of development and social and energy needs vary from country to country, Anand Selvakesari, CEO of personal banking and wealth management at Citigroup, believes that sustainable development should be compatible with the local environment, and that energy needs vary from country to country.