The Hong Kong Monetary Authority (HKMA) has initiated a public consultation to expand its taxonomy for sustainable finance.
The move is designed to solidify Hong Kong’s position as a global leader in green and sustainable finance by providing clearer, more robust definitions for sustainable activities.
By doing so, the HKMA aims to boost capital flows toward green projects while combating greenwashing concerns. The new phase builds on the initial taxonomy, which was published in May 2024.
Scope and international alignment:
The proposed Phase 2A prototype expands the taxonomy’s sector coverage from four to six, now including manufacturing and information and communications technology.
The number of economic activities has also grown from 12 to 25. Crucially, the updated framework introduces “transition elements” with interim decarbonization targets and a new environmental objective focused on climate change adaptation.
This expansion, and the inclusion of transition finance and adaptation measures, will align Hong Kong’s framework more closely with international standards, including those from mainland China and the European Union.
A tool for climate goals:
According to Financial Secretary Paul Chan, the updated taxonomy will be pivotal to scaling up capital flows toward sustainable projects.
The framework provides a common language for investors and issuers, enabling them to make more informed decisions and direct capital toward projects that help Hong Kong meet its climate goals of cutting carbon emissions in half by 2035 and achieving carbon neutrality by 2050, he said.
The public consultation is open until October 8, 2025, providing an opportunity for stakeholders to offer feedback and help shape the final framework.
