Explainer | Hong Kong’s Retail Green Bond 2022: how does your investment help fight climate change?
- The bond proceeds will be used to fund nine types of projects that fight climate change and help transition Hong Kong to a low-carbon economy
- There is no guarantee on the environmental benefits for projects funded by the bonds, as each has varied sustainability attributes and carries different implementation risks
The Hong Kong government’s inaugural Retail Green Bond drew enthusiastic response from investors when it opened for subscription last week. The bond has an initial tranche of HK$15 billion (US$1.9 billion), with the option to increase to HK$20 billion if there is demand.
The government last July doubled the size of its green bond programme, initiated in 2017, to HK$200 billion. After selling just over HK$57 billion to institutional investors since 2019, the investment product is now available to small investors.
Besides supporting sustainable development, the proceeds will be used to combat climate change through initiatives to transition Hong Kong to a low-carbon economy.
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But which projects qualify, how is the money allocated, and how can investors know the environmental benefits they will generate?
Here is what you should know about the government’s green bond programme.
What type of projects are funded by the bond proceeds?
The bond proceeds fund nine types of projects. They are renewable energy, energy-efficiency upgrades, pollution control, waste reduction and recycling, water and waste-water management, biodiversity conservation, clean transport, green buildings and climate-change adaptation.