Hong Kong’s stock exchange has introduced what it says is Asia’s first multi-asset sustainable investment product platform, a one-stop shop for investors that is aimed at supporting the government’s plan to develop the city into a hub for green finance.
It’s the latest move by the Hong Kong Exchanges and Clearing (HKEX) to facilitate sustainable investing. The bourse made environmental, social and governance (ESG) reporting mandatory for all listed companies in 2016, and amended listing rules earlier this year to require the boards of companies to incorporate ESG into their business strategies.
According to HKEX, the new platform, known as Sustainable and Green Exchange or STAGE, has an online product repository covering 29 locally listed sustainable-themed products, including ESG related exchange-traded funds and green bonds.
The platform will allow issuers to provide investors with more information on their sustainable products, promoting transparency and facilitating access to these investments, the exchange says in a statement on December 1.
“STAGE is Asia’s first multi-asset sustainable investment product platform,” it says. “The platform aims to support Hong Kong’s government commitment for the city to become the green finance hub of the Greater Bay Area and beyond.” The Greater Bay Area is a masterplan to develop Hong Kong, Macau, and nine cities in southern Guangdong province into an integrated technology, business and finance hub by 2030.
The platform “will connect market participants, issuers and investors, providing a one-stop shop for reliable green data and products, helping to drive growth potential, transparency and access to Asia’s exciting green and sustainable financial market”, Wilfred Yiu, HKEX’s head of markets, says in the statement.
Grace Hui, the head of green and sustainable finance, adds that the bourse is “actively encouraging all regional issuers of green and sustainable products to consider application for inclusion on STAGE, in turn helping to build Asian financial markets’ own sustainability”.
A centralised sustainable investment product platform is an important step for the development of ESG investing in Hong Kong, especially for green bonds, according to a portfolio manager based in the city.
As of last year, he says total green bond issuance in Hong Kong was US$100 billion, a three-fold increase from 2017 when the government first outlined plans to develop the city as a regional green bond hub.
“The HKEX’s new platform will further promote green bond investment activities with its high accessibility and transparency,” he tells Asia Asset Management, speaking on condition of anonymity.
According to HKEX, even though Asia accounts for less than 1% of the $30 trillion investments in the global sustainable finance market, “with increasing government and policy support, the business and investment case for sustainable finance in Asia is stronger than ever”.