Hong Kong government leads Asia in green-bond issuance, becomes fifth largest worldwide

The Hong Kong government has become the largest source of climate-aligned government bonds in Asia and the fifth largest cumulative issuer of government green bonds in the world, according to a new report from the Climate Bonds Initiative.

The city’s sustainable debt market achieved its largest growth yet in 2023, increasing by 236 per cent year on year to US$18.2 billion, according to the non-profit’s report on Monday.

Green-theme debt made up most of the market, at US$15.6 billion, with the social theme accounting for US$2.6 billion. Social and sustainability issuance volumes from Hong Kong grew for a third consecutive year, increasing by 29 per cent to US$2.56 billion.

“Transition finance is a significant trend in global sustainable finance development, offering tremendous growth opportunities in financing the transition of high carbon emitting industries in Asia,” said Ma Jun, chairman and president of the Hong Kong Green Finance Association.

“Hong Kong can capture this opportunity by expanding its local [Common Ground Taxonomy] to include transition activities, to mitigate greenwashing and to facilitate capital flows across jurisdictions.”

Green bond issuance grew 173 per cent year on year in 2023, and the Hong Kong government was the world’s fourth-largest source of aligned government green bonds, behind the United Kingdom, Germany and Italy.

“As the leading Asian government issuer of green debt, Hong Kong can further pioneer transition products linked to decarbonisation performance and incentives, develop transition-related disclosures, and foster a science-based transition approach, solidifying its position as a leading sustainable financing hub for Asia,” Ma said.