Hong Kong Exchanges and Clearing (HKEX), under the guidance of its chairwoman Laura Cha Shih May-lung, is ramping up its climate-related information disclosure standards. This move is aimed at bolstering China’s ambitions of achieving carbon neutrality. HKEX envisions providing a transparent platform where investors across the globe can seamlessly access comprehensive climate-related data.
During her speech at the 2023 Bund Summit in Shanghai, Cha stressed that HKEX’s disclosure rules will be synchronized with top international standards. HKEX aims to provide more innovative financial channels for green technology firms, though detailed strategies remain under wraps for now.
The primary goal, as outlined by Cha, is multifaceted. HKEX wishes to actively contribute to China’s carbon neutrality efforts by:
- Channeling investments into green tech entities,
- Bridging domestic companies with international firms and capital resources that can collectively champion a low-carbon future, and
- Driving forward technological advancements in green tech and championing sustainable growth.
The Bund Summit, an influential annual congregation organized by the China Finance 40 Forum, serves as a platform for global policymakers, finance professionals, and scholars. Here, they deliberate on China’s economic landscape, especially in the wake of uncertainties concerning the US-China relationship.
Hong Kong, a prominent hub for offshore yuan transactions, settlements, and risk management systems, is pivotal for China’s financial growth and resource allocation strategies. HKEX, being at the heart of Hong Kong’s financial landscape, already boasts a roster of significant Chinese green tech and new-energy automotive entities. Noteworthy names include car manufacturers like Nio, Li Auto, and Xpeng, and battery production giants such as China Aviation Lithium Battery.
Laura Cha, with her rich experience from her tenure as the vice-chairwoman of the China Securities Regulatory Commission between 2001 and 2004, pointed out that HKEX has emerged as the prime choice for mainland green tech firms looking to go public. This commitment aligns with Chinese President Xi Jinping’s 2020 promise at the United Nations General Assembly to peak the nation’s carbon emissions by 2030 and achieve carbon neutrality by 2060.
However, meeting these targets necessitates colossal financial backing. Estimates by the Beijing-based Institution of Finance and Sustainability in 2022 projected that China’s green projects would demand over 300 trillion yuan (approximately US$41 trillion) from 2021 through 2050. Responding to this, HKEX has floated the idea of introducing new reporting norms from the upcoming year, closely aligned with the International Sustainability Standards Board’s global baseline for disclosures.
This revised structure mandates firms to disclose their environmental, social, and corporate governance practices, shifting away from the current model where companies can opt to either comply or explain their stance.
Furthermore, insights from the Bund Summit revealed a broader perspective on China’s innovation path. Zhang Xiaojing, a professor at the Chinese Academy of Social Sciences, advocated for reduced governmental intervention in technological innovation sectors. He emphasized the importance of letting market dynamics dictate the pace and direction, arguing that governments should refrain from guaranteeing investment safety and instead allow the market to assess and price financial risks.