Hong Kong firms showcase local Green Bond market development

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PolyU’s Green Finance Symposium gave attendees an insightful look at the role of Green Finance in Hong Kong and Mainland China.

Photo Credit: Jasmine Lee

On 4 July, the School of Accounting and Finance at Hong Kong Polytechnic University hosted a Green Finance Symposium. This half day event featured keynote speaker Professor Sheridan Titman (Walter W. McAllister Centennial Chair in Financial Services) at University of Texas, Austin, USA, where he presented his speech entitled “The Transition to Clean Energy”. His research focuses on the banking, capital markets, energy and investment banking industries. He has published academic articles on asset pricing, corporate finance and real estate and energy finance. He was the recipient of the Batterymarch Fellowship, and has also received awards such as the Smith-Breeden Prize, the GSAM best paper award for the Review of Finance.

Large amounts of resources are spent on going “green”; US$7.7 billion has been spent in clean energy research and development in the US in 2017, with a plan to double that expenditure in the next five years. In his speech, Titman stated that these spendings clearly indicate that renewable energy research is a big issue, and the finance sector needs to be thinking about it from their perspective. He discussed the role that financial economists can contribute to the renewable energy debate, such as their influence in encouraging policies to promote innovation, facilitate co-ordination, and discourage carbon emission.

Panel speakers on the topic of Green Bonds included Jonathan Drew (Managing Director, Infrastructure and Real Estate Group, Global Banking and Markets, HSBC), Professor Louis Cheng (School of Accounting and Finance, PolyU), David Pang (Treasurer, MTR Corporation Limited), and Keith Ng (Head of Capital Markets, Link REIT). Each of the panelists discussed why people issue Green Bonds, and why they are important investments to their companies.

Jonathan Drew’s presentation gave an in-depth market overview and update on Green Bonds. He discussed the imminent need for climate finance, noting the global support for Green Bond regulation/guidance/issuance plans and its development over the years. He also detailed the advantages of Green Bonds over an ordinary bond issuance; not only are they simple to issue, but they come with numerous benefits such as investor diversification and the increase of investor loyalty. He depicted a rather positive outlook for Green Bonds in the coming future, including a market growth to US$1 trillion in five years.

David Pang delivered his presentation, focusing on the benefits of the MTR as a “green” transport system. He spoke about their motivations for issuing Green Bonds as aligning with the green nature of their sustainable industry. As a large supporter of developing Hong Kong into a green finance hub, Pang emphasised the benefits of the Green Bond/MTN issuance, which includes improving long-term business sustainability and enhancing the environmental-conscious culture.

Keith Ng shared Link’s relationship with Green financing and their US$500m Green Bond offering. He discussed Link’s Green Bond framework that promotes an eligible green project which includes utilising green building standards and achieving 15% improvement in energy efficiency. Link also adopts business practices to improve climate change, such as promoting low carbon transportation (i.e. electric vehicles) and improving water efficiency. Link’s green initiatives are all-encompassing, ensuring that their company and its projects match the sustainable ethics which it promotes.

This Green Finance Symposium was an engaging event for those who attended, giving them an insightful look at the role of Green Finance in Hong Kong and Mainland China.