Despite the challenging market environment, the Hong Kong sustainable finance market remained strong and continues to grow. Various initiatives were launched in Hong Kong in 2024 and early 2025 by different stakeholders, including the government, regulators, industry bodies and financial institutions, and we set out below key highlights of such initiatives.

A key highlight is the issuance of the world’s first-ever multi-currency tokenized green bonds of around HK$6 billion ( US$772.08 million ) by the Hong Kong government in February 2024, which attracted an overwhelming subscription by global institutional investors.

The Hong Kong Mortgage Corporation also issued Hong Hong Kong’s second infrastructure loan-backed securities, which covered 28 projects across the globe, totalled approximately US$423.3 million and had a sustainability tranche of US$107 million. 

Other governmental support

In the 2024-25 budget, the government expanded the scope of the existing Government Green Bond Programme, and renamed it as the Government Sustainable Bond Programme ( GSBP ) to cover sustainable projects. In May 2024, the Hong Kong Legislative Council approved a new borrowing ceiling totalling HK$500 billion for GSBP and a new infrastructure bond programme. As of August 31 2024, the government has successfully issued almost HK$220 billion worth of green bonds under the GSBP.

Industry standards for sustainable finance

In 2024, the Asia Pacific Loan Market Association ( APLMA ) published model provisions for green loans, a sustainability coordinator mandate letter and a term sheet ( with sustainability-linked loan appendix ), and the Loan Market Association ( LMA ) also published the draft provisions for green loans. 

In March 2025, APLMA, LMA and the Loan Syndications and Trading Association jointly issued further updates to the principles and guidance on three types of sustainable loans: green, sustainability-linked and social. The updates were intended to provide drafting clarifications, reflect the latest global sustainable finance developments and to expand the scope of the principles to apply equally to all loan transactions.

Together, these guidance materials set the latest industry standards for sustainable lending within the Asia-Pacific region.

ESG disclosure requirements

Effective from January 1 2025, Part D was added to the ESG Reporting Code ( within the Rules Governing the Listing of Securities on the Stock Exchange ). This entails an expanded scope of disclosure, in addition to an increased disclosure threshold in relation to climate-related risks and opportunities for listed companies.

Part D categorizes disclosures into four core pillars:

• Governance – issuers to set out responsibilities of the governance bodies or individuals, as well as controls and procedures to monitor and manage climate-related risks and opportunities
• Strategy – issuers to disclose the impact of climate-related risks and opportunities on its financials, business model, value chain, strategy and decision-making, as well as its responses and transition plans in order to cope with the impact and assess its climate resilience
• Risk management – issuers to disclose the process undertaken to assess and manage climate-related risks and opportunities
• Metrics and targets – issuers to disclose Scope 1, 2 and 3 greenhouse gas ( GHG ) emissions, climate-related transition and physical risks and opportunities, capital deployment, cross-industry metrics, internal carbon prices, remuneration, industry-based metrics and climate-related targets.

Issuers that face reporting challenges may be granted implementation reliefs, including those related to reasonable information, capabilities, commercial sensitivity and financial effects.

It should be noted that other than for Scope 1 and 2 GHG emissions, which are required to be disclosed on a mandatory basis for all issuers, mainboard and large-cap issuers are still required to report the new climate requirements on a ‘comply or explain’ basis, and large-cap issuers will be required to report on a mandatory basis for financial years commencing on or after January 1 2026. Growth Enterprise Market, or GEM, issuers are able to report on such requirements on a voluntary basis.

Hong Kong taxonomy

The Hong Kong Monetary Authority ( HKMA ) published the Hong Kong Taxonomy to facilitate informed decision-making on green, sustainable and relevant finance flows in May 2024. It enables easy navigation among the Common Ground Taxonomy, China’s Green Bond Endorsed Projects Catalogue and the European Union’s Taxonomy for Sustainable Activities, and currently encompasses 12 economic activities under four sectors – power generation, transportation, construction, and water and waste management. The HKMA seeks to expand the coverage of the taxonomy to include more sectors and activities, including transition activities in the future.

Conclusion

With efforts from different stakeholders – such as the government, regulators and financial institutions – we believe that the steady increase of sustainable finance locally in Hong Kong, and regionally within the Greater Bay Area and China, the increasing global demand for sustainable finance products, and Hong Kong’s commitment to fulfil its climate goals by 2050 collectively push forward Hong Kong towards becoming an international sustainable finance hub.

Francis Chen, Dion Yu, Angie Chan are banking and finance partners, and Chester Wong is a corporate and securities partner at law firm Johnson Stokes & Master.