Trailblazing for Change: Hong Kong, the Impact Investing Hub of Asia
27 Sep 2024
The global financial landscape has witnessed a significant paradigm shift with the rise of sustainable finance. Impact investing, among other means, is a powerful catalyst aligning investor capital with societal and environmental values. This some US $1.2 trillion-worth market reflects investors’ growing interest in tackling critical issues like climate change, poverty, and inequality through their investments.
As a sizeable economy, Mainland China holds vast potential for impact investing, with Hong Kong well-positioned to facilitate this growth due to its deep understanding of the Chinese market and financial expertise. China’s ambitious carbon peaking and neutrality targets require an estimated annual funding of RMB 2.6-4.2 trillion, with over 80% predicted to come from social capital. Hong Kong can play a crucial role in bridging this funding gap and channelling impact capital towards China’s sustainability efforts. The city’s reputation as a green finance hub, its regulatory environment, and the government’s commitment to sustainable finance create an ideal ecosystem for impact investing to thrive.
To this end, the Financial Services Development Council (FSDC) sees now as an opportune moment to accelerate the development of impact investing, leveraging its potential to drive positive change and address pressing societal challenges in the city. As such, the FSDC has formed a dedicated Working Group comprising industry experts with a view to gathering market feedback and formulating policy recommendations for the Government’s and public stakeholders’ consideration. This study aims to identify measures to promote impact investing in Hong Kong, encourage corporate and institutional participation in impact investing, and ultimately establish the city as a regional hub for impact investment.