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Opinion | Why the Asia-Pacific needs Hong Kong’s help to fight climate change
- As the effects of climate change start to take hold, Hong Kong’s role as a leading green and sustainable finance hub is increasingly important
- Hong Kong is well-positioned to channel investment to those who need it most and provide the opportunity of a lifetime to potential investors
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Climate change is the challenge of our time, and the stakes are especially high in the Asia-Pacific. The region is home to about 4.7 billion people, accounts for three-fifths of global emissions from power generation and includes many countries vulnerable to global warming.
Extreme weather is causing widespread deaths in India and fuelling forest fires in Indonesia and Thailand, and the small island nation of Tuvalu is expected to be submerged by the end of the century. Around 13 per cent of Asia’s GDP is at risk from the adverse effects of climate change, four times higher than the global average.
As top decision-makers in global business and finance gather for Hong Kong Green Week, the role of the city as a leading green and sustainable finance hub in addressing the climate challenge at home and abroad will be top of mind given the significant financing gaps that exist in the Asia-Pacific region.
Take clean energy as an example. To meet rising energy needs in ways that align with the Paris Agreement, annual public and private investment in clean energy in emerging and developing markets in Asia will need to nearly triple to as much as US$1.7 trillion by 2035.
Hong Kong is well-positioned to channel the required investment into countries that need it most, particularly through participation by its financial institutions in green financing transactions in the wider Asia-Pacific region. Hong Kong is a leading international bond market, and it has one of the world’s most active equity markets.
The Hong Kong Monetary Authority is making great strides in promoting the city as a green finance hub, too. It captured more than a third of Asia’s green and sustainable bond issuance in 2022, and about 200 environmental, social, and governance (ESG) funds are registered here.
Riccardo Puliti is the International Financial Corporation's regional vice-president for Asia and the Pacific and oversees all investment and advisory operations across the region. He was previously vice-president for infrastructure at the World Bank.
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