Hong Kong Monetary Authority Moves to Broaden Sustainable Finance Standards

Key Takeaways

• Expanded Scope for Sustainable Activities: Phase 2A broadens the Hong Kong Taxonomy’s coverage, reflecting growing market demand for clearer definitions of what qualifies as green and sustainable finance.
• Transition and Adaptation Brought Into Focus: The update formally introduces transition elements and a climate change adaptation category, addressing areas that stakeholders flagged as critical gaps.
• Strong Market Support Through Consultation: Banks, asset managers, corporates, NGOs, and public-sector bodies broadly backed the proposed expansion during the 2025 public consultation.
• Greater Practical Clarity: Feedback led to refinements aimed at improving usability and consistency, making the taxonomy more operational for real-world financial decision-making.
• Living Framework, Not a Final Rulebook: The HKMA confirmed that further phases are already underway, with future updates tied to market developments, policy direction, and technological change.

Deep Dive

Hong Kong’s push to position itself as a hub for sustainable finance took another step forward this week, as the Hong Kong Monetary Authority (HKMA) published Phase 2A of the Hong Kong Taxonomy for Sustainable Finance.

The updated taxonomy, released on 22 January, expands the framework first introduced in May 2024 and is intended to make it easier for banks, investors, and corporates to identify economic activities that genuinely contribute to green and sustainable development. It also reflects growing demand for clearer guidance on how transition activities and climate adaptation fit into sustainable finance classifications.

Phase 2A follows a public consultation launched in September 2025 on a prototype version of the expanded taxonomy. That consultation drew responses from a wide cross-section of the market, including financial institutions, asset managers, professional bodies, corporates, non-government organisations, think tanks, and public-sector stakeholders. According to the HKMA, feedback was broadly supportive of widening the taxonomy’s scope and of adding explicit transition elements alongside a new climate change adaptation category.

Respondents also pushed for greater clarity and practicality, a theme the HKMA says directly shaped the final version now being published. Based on that feedback, the authority refined the prototype and released it as Phase 2A, alongside a consultation report detailing stakeholder input and the HKMA’s responses.

The central bank framed the taxonomy as an evolving tool rather than a finished product. Further phases are already in development and will continue to be shaped by market conditions, policy priorities, industry needs, and technological progress. The HKMA said it plans to maintain active engagement with market participants as the framework develops.

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