Lawrence Jengar
Jan 30, 2026 04:30
HKMA and SFC unveil three-year strategy to cement Hong Kong as Asia’s sustainable finance hub, expanding taxonomy to 25 economic activities across six sectors.
Hong Kong’s top financial regulators have mapped out an ambitious three-year plan to capture Asia’s growing sustainable finance market, with cross-border carbon trading and mandatory climate disclosures at its core.
The Green and Sustainable Finance Cross-Agency Steering Group, co-chaired by the Hong Kong Monetary Authority and Securities and Futures Commission, released its 2026-2028 strategic priorities on January 29 following its 12th meeting since formation in 2020.
Two Pillars Define the Strategy
The roadmap centers on consolidating Hong Kong’s existing sustainable finance infrastructure while pushing into emerging areas like transition and adaptation finance.
On the consolidation front, regulators are tightening sustainability disclosure requirements. Large publicly accountable entities must fully adopt International Sustainability Standards Board (ISSB) standards by 2028, per a December 2024 government roadmap. The Accounting and Financial Reporting Council kicked off a consultation on sustainability assurance frameworks in late December 2025.
“Hong Kong’s sustainable finance market has witnessed significant development in the past few years,” said Eddie Yue, HKMA Chief Executive. The new priorities aim to position the city “to capture the emerging opportunities in Asia’s transition to a low-carbon and climate-resilient economy.”
Expanded Taxonomy Now Covers 25 Activities
The HKMA published Phase 2A of its Hong Kong Taxonomy for Sustainable Finance on January 22, 2026. The update expands coverage from 12 to 25 economic activities across six sectors—up from the original scope. Notably, it introduces transition elements and adds climate change adaptation as a new environmental objective, addressing physical climate risks and extreme weather challenges facing the region.
Cross-border carbon market collaboration sits high on the agenda. Hong Kong has been positioning itself as a gateway for international carbon credit trading, with the expanded taxonomy providing clearer definitions for what qualifies as sustainable investment.
Transition Finance Gets Practical Guidance
The second pillar targets transition and adaptation finance—areas where Asian markets lag behind Europe. Regulators plan to release practical guidance, enabling tools, and case studies to scale transition finance adoption. For adaptation finance, the focus falls on building market readiness and supporting product innovation.
SFC CEO Julia Leung emphasized the importance of “enhancing disclosures and scaling transition finance” to support “credible outcomes, transparent and science-based pathways across the financial system.”
The Steering Group includes the Financial Services and Treasury Bureau, Environment and Ecology Bureau, Insurance Authority, Mandatory Provident Fund Schemes Authority, and Hong Kong Exchanges and Clearing Limited. This multi-agency approach reflects the breadth of Hong Kong’s push to become the sustainable finance gateway for mainland China and broader Asian markets.
For digital asset firms operating in Hong Kong, the tightening ESG disclosure regime signals that sustainability credentials will increasingly matter for regulatory approval and institutional capital access. The 2028 ISSB compliance deadline creates a clear timeline for market participants to prepare.
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