Good practices of green finance in Southeast Asia

Reporting by Bank for International Settlements - SpeechesRead the original at bis.org

Executive Summary

The framework for sustainable finance in Hong Kong involves a cascading effect, where regulatory actions create ripple effects across the financial system to the real economy through the involvement of corporates and individuals. The launch of the Hong Kong Taxonomy for Sustainable Finance serves as a market-enabling tool by providing clear definitions for green, transition, and adaptation activities, allowing financial institutions to channel capital toward sustainable opportunities. This process is supported by data initiatives, such as the Physical Risk Assessment Platform and tools like the GHG emissions calculator, which aim to convert abstract climate risk into measurable data. The strategy moves from regulatory awareness to risk planning for banks, followed by market disclosure requirements, and finally, the incentivization of financing through mechanisms like the Green and Sustainable Finance Grant Scheme, all amplified by technological advancements and collaboration.

Facts Only

* A public consultation for Phase 2B of the Hong Kong Taxonomy for Sustainable Finance was launched.
* The Taxonomy provides definitions for green, transition, and adaptation activities to enable financial institutions to work with clients on opportunities.
* The process demonstrates a "ripple effect" where initial actions lead to reinforcement across the system.
* Banks prioritized transition planning by issuing guidance and developing guidelines that make client engagement central.
* A data gap was addressed through the Physical Risk Assessment Platform, which analyzed close to two million assets, expanded from Hong Kong to a global scale.
* Practical tools include a GHG emissions calculator/estimator and sustainability questionnaires for smaller companies.
* Hong Kong has led the regional league table for arranging international green and sustainable bonds in Asia for eight consecutive years.
* Incentives are offered through the Green and Sustainable Finance Grant Scheme, which funded over US$200 billion in green and sustainable debt instruments.
* Technology is viewed as a multiplier by enabling green fintech to manage risk and surface investment opportunities at scale.
* Partnerships exist, such as with the Asian Infrastructure Investment Bank, supporting venture-capital funds for green infrastructure technologies.

Full Take

The narrative establishes a clear structure: starting with regulatory action (the pebble) and demonstrating its systemic spread via layered mechanisms of awareness, data collection, risk management, disclosure, and financing. The core implication is that achieving sustainable finance requires moving beyond single-sector focus; the actual leverage point is in the feedback loops between institutions and the real economy. The reliance on "ripples" suggests an acknowledgement that linear cause-and-effect models are insufficient for complex systemic change. The reliance on practical tools like calculators and platforms highlights a critical tension: bridging high-level regulatory ambition with the messy, data-intensive reality of implementation. The acceleration provided by technology and collaboration suggests that institutional alignment alone is not sufficient; successful transition hinges on creating scalable, measurable pathways that connect risk visibility directly to capital deployment. The challenge lies in ensuring that the intended "ripples" translate into equitable and broad-based impact rather than simply reinforcing existing financial structures.

From the original · Bank for International Settlements - Speeches

Ripple Effect: From regulator to financial institutions, corporates and individuals – across Hong Kong and beyond Introduction Good morning. It’s my pleasure to join you as one of the keynote speakers today.

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