lawrence jenga
January 30, 2026 04:30
HKMA and SFC have launched a three-year strategy to solidify Hong Kong as Asia’s sustainable finance hub, expanding the classification to 25 economic activities across six sectors.
Hong Kong’s top financial regulator has set out an ambitious three-year plan to capture Asia’s growing sustainable finance market, with cross-border carbon trading and climate obligation disclosures at its core.
The Green and Sustainable Finance Inter-Institutional Steering Group, co-chaired by the Hong Kong Monetary Authority and the Securities and Futures Commission, released its strategic priorities for 2026-2028 on January 29, following its 12th meeting since its formation in 2020.
Two pillars define the strategy
The roadmap focuses on consolidating Hong Kong’s existing sustainable finance infrastructure while also driving emerging areas such as transition and adaptive finance.
On the integration side, regulators are strengthening sustainability disclosure requirements. Large public accountability bodies must fully adopt International Sustainability Standards Board (ISSB) standards by 2028, according to the government’s roadmap for December 2024. The Accounting and Financial Reporting Committee began consultations on the sustainability assurance framework at the end of December 2025.
“Hong Kong’s sustainable finance market has made significant progress over the past few years,” said Eddie Yue, CEO of HKMA. The new priorities aim to position cities to “seize new opportunities in Asia’s transition to a low-carbon and climate-resilient economy.”
The expanded taxonomy now covers 25 activities.
The HKMA published Phase 2A of the Hong Kong Taxonomy for Sustainable Finance on 22 January 2026. The update expands the original scope from 12 to 25 economic activities across six sectors. In particular, it addresses the physical climate risks and climate extremes facing the region by introducing a transition element and adding climate change adaptation as a new environmental objective.
Cross-border carbon market cooperation is high on the agenda. Hong Kong has positioned itself as a gateway to international carbon emissions trading, with expanded classifications providing clearer definitions of what qualifies as sustainable investments.
Transition Finance Gets Practical Guidance
The second pillar targets transition and adaptation finance, where Asian markets lag behind their European counterparts. The regulator plans to publish practical guidance, support tools and case studies to expand the adoption of transition finance. For adaptive finance, the focus is on building market readiness and supporting product innovation.
SFC CEO Julia Leung emphasized the importance of “strengthening disclosure and scaling transitional finance” to support “trustworthy outcomes, transparent and science-based pathways across the financial system.”
The operating group includes the Department of Financial Services and Treasury, the Department of Environment and Ecology, the Insurance Authority, the Mandatory Provident Fund Scheme Authority and the Hong Kong Exchange and Clearing Limited. This multi-agency approach reflects Hong Kong’s broader efforts to become a sustainable financial gateway for mainland China and broader Asian markets.
For digital asset companies operating in Hong Kong, the strengthening ESG disclosure regime is a sign that sustainability credentials will become increasingly important for regulatory approval and access to institutional capital. The 2028 ISSB compliance deadline creates a clear timeline for market participants to prepare.
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