Regulatory Alerts2020-06-30
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White Paper on Green and Sustainable Banking
The Hong Kong Monetary Authority issued the White Paper on Green and Sustainable Banking to outline its supervisory approach to climate-related risks for authorized institutions. The document requires financial institutions to prepare for physical and transition impacts of climate change on their operations and clients. The regulator intends to engage in further industry discussion before establishing formal supervisory requirements for a more climate-resilient banking system.
Banking Policy Department Our Ref: B1/15C B9/197C 30 June 2020 The Chief Executive All Authorized Institutions Dear Sir / Madam, White Paper on Green and Sustainable Banking The HKMA has published the White Paper on Green and Sustainable Banking today. Climate change is one of the major risks threatening the well-being of mankind, and the financial sector is no exception. Authorized institutions (AIs) should gear up to meet the possible challenges arising from climate change, including the physical and transition impacts on their own operations and their clients. The white paper aims at, through providing some background on climate and environmental issues, discussing the initial thinking of the HKMA about its supervisory approach to addressing climate-related issues, and to a lesser extent, broader sustainability issues. The HKMA hopes that the white paper can enable AIs to have a grasp of the issue and help shape a greener, better and more climate-resilient banking system. The HKMA appreciates further discussion with the banking industry about our thinking presented in the white paper before proceeding with a formal consultation of our supervisory requirements. Yours faithfully, Daryl Ho Executive Director (Banking Policy) Encl
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