Source: Hong Kong Government special administrative region – 4
Following is the speech by the Financial Secretary, Mr Paul Chan, at 2025 Hong Kong Green Finance Association (HKGFA) Annual Forum “Navigating Climate Finance and Geopolitics: Strategies for Transition” today (September 8):
Dr. Ma (Chairman and President of HKGFA, Dr Ma Jun), Professor Li (Professor of Political Science and Founding Director of the Centre on Contemporary China and the World of the University of Hong Kong, Dr Li Cheng), Dr. Berglöf (Chief Economist, Asian Infrastructure Investment Bank, Dr Erik Berglöf), distinguished guests, ladies and gentlemen,
Good morning. It is a great pleasure to join you today at the eighth edition of the Hong Kong Green Finance Association Annual Forum.
This year’s Forum marks the opening of Hong Kong Green Week. This week, leading voices from global financial institutions, corporations and policy circles will engage in essential discussions on sustainable finance, climate technologies, impact investing and regional green co-operation. They’ll share knowledge, experiences and explore how green transformation can create fresh opportunities, particularly in the face of a volatile geopolitical landscape.
A world of contrast
Let me begin by acknowledging some uncomfortable realities. The urgency of the climate crisis is clearer than ever, and we are all witnessing it and feeling it first-hand, in the unprecedented heatwaves from Europe to Japan and the numerous black rainstorms that have battered our city this summer.
This devastating reality is compounded by rising unilateralism. The US’ withdrawal from the Paris Agreement, and an overt policy shift back to fossil fuels, are disappointing. It weakens the collective commitment to climate action and, no less important, complicates the US$1.3 trillion annual climate-finance target for developing countries, reached at COP 29 (the 29th Conference of the Parties to the United Nations Framework Convention on Climate Change).
Still, we must not lose hope. Many countries remain firmly committed to net-zero transition, in particular our country, China, which stands by its 3060 goals. According to estimates, our country’s CO2 emissions in the first quarter this year fell by 1.6 per cent year on year. This is the first time that clean-energy expansion is leading the fall in CO2 level, and that’s despite rapid growth in power demand. China is expected to invest some US$820 billion in energy transition this year, accounting for nearly 40 per cent of the global total.
Moreover, its national emissions trading scheme continues to expand, now covering 70 per cent of the country’s emissions, including key polluting sectors such as cement, steel and aluminium.
Across Asia and the Global South, the progress is also encouraging. In the Asia-Pacific region, investment in energy transition, last year, surpassed US$1 trillion for the first time. That’s more than double the amount invested in the Americas. ASEAN (Association of Southeast Asian Nations) member states reaffirmed their commitment to climate resilience at their recent summit, underscoring the priority the region has accorded to climate action. For Belt and Road economies as a whole, renewable energy now constitutes 30 per cent of their total energy investments, up from less than 5 per cent just a decade ago.
Technological advancements are also offering new hope. Beyond solar power and electric vehicles, artificial intelligence (AI) is emerging as a transformative force. The International Energy Agency predicts that, by 2035, the widespread use of AI could reduce global energy consumption by an amount greater than the total energy usage of Mexico.
How Hong Kong can contribute
Here in Hong Kong, we remain steadfast in our commitment to climate action. We are on track to cut our carbon emissions in half by 2035, and achieve carbon neutrality by 2050. This goal is anchored in four key strategies: decarbonising power generation, improving energy efficiency in buildings, promoting green transport and reducing waste.
In power generation, we are making pleasing progress. By 2026, with the completion of enhancements to the cross-boundary Clean Energy Transmission System, the share of zero-carbon electricity in our fuel mix is expected to rise from 25 per cent to 35 per cent. We are also planning for the construction of new facilities in Tseung Kwan O to further expand our capacity to import zero-carbon energy. Upon completion of the project, the share of zero-carbon energy in our fuel mix could increase to about 60 to 70 per cent.
Beyond fulfilling our domestic commitments, Hong Kong has much more to offer the world. As an international financial centre and an innovation hub, we are well positioned to contribute to global green transition.
On green and sustainable finance
Hong Kong has long been Asia’s frontrunner in green and sustainable finance. In 2024, we issued more than US$80 billion in sustainable debts, with green bonds accounting for around 45 per cent of the regional total. Estimated issuances of sustainable debts in the first half of 2025 reached over US$34 billion, an increase of 15 per cent year on year. Over 200 ESG funds have been authorised by the Securities and Futures Commission, with an AUM (assets under management) exceeding US$140 billion, up more than 50 per cent in just three years. These figures speak volumes about our growing role as a green financing and investment hub.
And we have been doing more than that. For example, in the area of transition finance. While it still represents a small fraction of the sustainable finance markets, it is gaining a traction and offers considerable prospects. For instance, transition bonds account for only around 3 per cent of the sustainable bonds market in the ASEAN+3 Market. Hong Kong obviously has the potential to become a transition finance hub, helping hard-to-abate sectors to decarbonise.
Separately, last year, we issued the Hong Kong Taxonomy for Sustainable Finance, which aligns with the frameworks of both the Chinese Mainland and the European Union. Today, the Hong Kong Monetary Authority (HKMA) begins a public consultation to expand this taxonomy to cover transition finance. Other elements include expanding sector coverage and introducing climate change adaptation. These are pivotal to scaling up capital flows to accelerate green transformation.
Taking a broader perspective, setting and upholding international standards are important if we are to attract and channel more investments to green and transition projects. Hong Kong is proud to contribute to the setting of the ISSB (International Sustainability Standards Board) reporting standards and the related disclosure framework. As confirmed by the IFRS Foundation (the International Financial Reporting Standards Foundation) in June this year, Hong Kong is one of the few jurisdictions in Asia with a clear roadmap for full adoption.
We are also working to mobilise more capital across the public and private sectors. The HKMA has entered into strategic partnerships with multilateral organisations to co-invest in climate and development projects. And our vibrant venture capital and private-equity sector, plus the concentration of wealthy family offices and high-net-worth individuals, are great resources. A study shows that 87 per cent of high-net-worth investors are eager to support climate-focused investments. There is even stronger interest in transition investing than in sustainable investing.
In this regard, there is great potential in developing innovative, climate-focused financial products that cater to market appetite.
Expanding Green Innovation
Beyond finance, technological innovation is the engine that will drive green transformation. On this, Hong Kong is emerging as a green technology hub. Today, more than 250 green tech companies are based in Science Park and Cyberport. These firms are developing globally competitive solutions – from smart grid to carbon capture technologies. They are expanding rapidly into the Mainland and international markets.
And, through the coordinated efforts of the Innovation, Technology and Industry Bureau, OASES, Invest Hong Kong and the Hong Kong Investment Corporation, we are attracting prime green enterprises from around the world. These companies span a wide array of technologies – from AI-driven green solutions to sustainable aviation fuel, electric mobility infrastructure and next-generation power systems.
We are helping them to connect with Hong Kong universities and supply chains, identify more application scenarios and tap into markets across the Greater Bay Area, Asia and beyond.
Just as I said earlier, AI can power green transition. It can help traditional industries and sectors optimise production processes and energy consumption, thereby substantially reducing their carbon footprint. Hong Kong has prioritised AI as a core industry. I’m confident that many AI solutions for decarbonisation can scale here and make a lasting impact.
Closing
Ladies and gentlemen, there is only one earth, one planet that we all share. While the world may be facing substantial geopolitical challenges, Hong Kong is fully committed to becoming a reliable and resourceful partner in the global green transformation.
Through forums like this, we reaffirm our commitment to collaboration and partnership. In the space of sustainable finance, technology, talent and many other areas, we can work together to turn climate challenges into rewarding opportunities.
On this note, I wish the Forum and Hong Kong Green Week every success, and all of you the best of health and business.
Thank you.