The minute
- The Hong Kong Monetary Authority (HKMA) released draft Phase 2A of the Hong Kong Taxonomy, expanding the sustainable finance classification from 25 to 39 activities across new sectors including transportation, manufacturing, and waste.
- The update adds transition pathways for hard-to-abate industries such as air transport and iron and steel, climate adaptation measures for shoreline protection and flood management, and four new environmental objectives covering biodiversity, water conservation, pollution prevention, and circular economy.
- Public consultation on Phase 2A is open until October 7, 2026, building on the initial taxonomy published in May 2024.
Why it matters: Hong Kong is positioning itself as a regional hub for sustainable finance in Asia. By broadening its taxonomy to include transition activities for carbon-intensive sectors, the city signals that credible decarbonization pathways, not just “green” activities, deserve structured financing frameworks.
The Phase 2A expansion introduces key enabling technologies such as battery manufacture and recycling and low-carbon technology manufacturing. It also moves beyond climate-only criteria by adding environmental objectives for biodiversity and ecosystem protection, water resource conservation, pollution prevention and control, and resource efficiency. The consultation period gives market participants until October 7 to provide feedback before finalization, via ESG Today.
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