Ripple Effect: From regulator to financial institutions, corporates and individuals – across Hong Kong and beyond
Introduction
Good morning.
It’s my pleasure to join you as one of the keynote speakers today. And thank you to BOCHK and all of you for your support to the Hong Kong Green Week 2026.
I have spoken many times about green and sustainable finance; indeed, I spoke just yesterday at another event of the Green Week. Very often, given my role at the HKMA, it would be easy to assume our journey in this field is a story about banks and financial markets alone. But it is more than that. It is a story about how a regulator’s actions travel — from a single institution, through the financial system, into the real economy, and ultimately to the corporates and individuals.
Let me start with a timely illustration. Just yesterday, we launched the public consultation for Phase 2B of the Hong Kong Taxonomy for Sustainable Finance. Since its launch in 2024, the Taxonomy has become an important market-enabling tool: by giving the market clear, transparent, and robust definitions of what counts as green, transition, and adaptation activities, it lets financial institutions work with their clients — corporates and individuals alike — to identify real opportunities and channel capital to where the economy is transitioning.
Ripple effect
The Taxonomy is one pebble among many the HKMA has cast into the financial system over the years. What matters is not any single pebble, but what happens after it lands. These ripples do not fade — they reinforce one another, gather momentum, and grow into waves that reach further than any one initiative could alone. That is precisely the logic behind our Sustainable Finance Action Agenda: to consolidate Hong Kong’s position as the region’s leading sustainable finance hub, while supporting sustainable development across Asia and beyond.
Now, let me now take you through how we have thrown pebbles and the chain of ripples to see how they relate and reinforce one another.
As a banking regulator, our instinct is to begin with risk. To enhance the resilience of and future-proof the banking sector, we began with initiatives to raise awareness and strengthen banks’ readiness. Climate risk unfolds over long, uncertain horizons, so banks need to understand not only what climate change means for their clients today, but how that exposure will evolve.
This is why we have prioritised transition planning: issuing high-level guidance, sharing good practice, and now developing guidelines that make client engagement central to the process. The logic is simple — the better a bank understands its clients’ transition pathways, the more it can help those clients mitigate the risk, and the further the ripple of awareness travels from the institution into the real economy. We will reinforce this further by embedding the transition planning efforts of banks into our Supervisory Review Process.
But awareness alone is not enough. Both the bank and the market need to see well in order to manage risks well. The Government’s roadmap on sustainability disclosure sets a well-defined pathway for the market, and we have completed a landscape study to prepare the banking sector for what lies ahead, with a policy consultation to follow later this year.
Disclosure, simple as it sounds, is not an easy act in the context of climate change. One of the prominent challenges to disclosure is the lack of data, and it is why closing the data gap has been just as much a priority as raising the awareness. Our Physical Risk Assessment Platform, launched in 2024, has already analysed close to two million assets, and this year we expanded its coverage from Hong Kong to a global scale. Alongside it, the Cross-Agency Steering Group, which we co-lead, has built practical tools banks and corporates actually use day to day: a GHG emissions calculator and estimator, and sustainability questionnaires designed specifically for smaller, non-listed companies. Together, these tools turn abstract risk into something measurable.
Risk and opportunity are two sides of the same coin. With a clearer understanding of risks and better visibility through data, banks and their clients are better positioned to act on the vulnerabilities and turn them into opportunities. Realising these opportunities would require financing at scale.
And that is the next focus to incentivise financing and create broader ripples of impact. Hong Kong has led the regional league table for arranging international green and sustainable bonds in Asia for eight consecutive years running — a strong foundation, but one we cannot be complacent about given how large the region’s financing gap remains.
That is why the Taxonomy I mentioned at the very beginning will keep expanding. That’s also why we offer incentives through the Green and Sustainable Finance Grant Scheme to fuel the momentum. Subsidies had been granted to over 700 green and sustainable debt instruments issued in Hong Kong, with a total underlying issuance volume of over US$200 billion.
Additional forces
Two forces make all the ripples I mentioned travel further and faster: technology and collaboration.
Technology is a powerful multiplier. By anchoring finance in green fintech, technology turns a single ripple into many at once. Green fintech lets us manage climate risk and surface new investment opportunities at a pace and scale manual processes cannot match. You will see this in action this Friday at the Green Fintech Symposium, themed “Smarter Finance for a Greener Transition.”1 The event will show how home-grown technology solutions carry the ripples further.
Collaboration with like-minded partners is another catalyst. Our partnership with the Asian Infrastructure Investment Bank is a prime example. Together, we have invested in a portfolio of venture-capital funds supporting innovative technologies and business models for green, technology-enabled infrastructure across Asia2.
Concluding remarks
I hope you can now see how the pebbles have helped get the ball rolling, setting off cascading ripples of awareness, readiness, and financing. And most important, for us to recognise the role each of us can play in amplifying them. Today’s forum in itself is a powerful ripple that can generate fresh momentum for the next. By bringing together leaders from the Chinese Mainland, Hong Kong, and Southeast Asia, we can turn shared ambition into collective action.
Together, the pebbles we cast today will create the ripples that expand into powerful waves, shaping a sustainable tomorrow for Asia and the world.
Thank you.