Hong Kong finalises Taxonomy Phase 2A with strong focus on adaptation and transition

As sustainable finance markets mature, attention is increasingly shifting from ambition to implementation. Across Asia, investors and policymakers are looking for practical, credible tools that can guide capital towards activities that support climate transition and resilience in real-world conditions. 

Building on the publication of Phase 1 of the Hong Kong Taxonomy, the Hong Kong Monetary Authority has now finalised and published Phase 2A of the Hong Kong Taxonomy for Sustainable Finance, following the conclusion of a robust public consultation process. 
 

A robust and well-supported consultation 

The Phase 2A prototype was released for public consultation to ensure the framework reflects market needs and practical considerations. The consultation ran for a month between 8 September and 8 October 2025 and attracted wide engagement from financial institutions, corporates, investors, industry and professional associations, and non-governmental organisations.  

Feedback demonstrated strong and broad-based support for the direction of the updated Taxonomy. Respondents welcomed the expanded scope, improved usability, and the inclusion of new elements designed to better reflect both transition dynamics and physical climate risk. A comprehensive consultation report has since been published, setting out how feedback was assessed and addressed in finalising Phase 2A. 

The consultation and refinement process was supported technically by Climate Bonds Initiative, helping ensure the framework remains science-based, practical, and aligned with international best practice. 
 

Market momentum and implementation focus 

The finalisation of Phase 2A comes at a time when sustainable finance discussions in Hong Kong are increasingly focused on delivery. During Hong Kong Green Week 2025, market participants consistently highlighted the need for clearer guidance on transition, resilience, and capital allocation as institutions move from commitments to implementation. 

The strong engagement throughout the Phase 2A consultation reflects this momentum, reinforcing demand for a taxonomy that is not only credible, but operational – capable of supporting real investment decisions across financial markets and the real economy. 
 

What’s new in Phase 2A 

Phase 2A significantly strengthens the Hong Kong Taxonomy by expanding coverage and enhancing its relevance for market participants: 

• Expanded sector coverage, including the addition of Manufacturing and Information and Communications Technology (ICT), alongside deeper coverage of sectors introduced under Phase 1.
• Transition activities and transition measures, recognising the need for credible, time-bound pathways towards decarbonisation where activities are not yet fully aligned with long-term climate goals.
• A new environmental objective on climate change adaptation, initially focused on water-related activities, reflecting the growing importance of managing physical climate risks. 

Together, these updates reinforce the Taxonomy’s role as a systematic framework for defining and classifying environmentally sustainable economic activities. 
 

What Phase 2A means for the market 

• Supporting credible transition: By introducing transition activities and measures, Phase 2A recognises both the challenge and opportunity of steady decarbonisation in sectors where emissions are more difficult to reduce.
• Responding to climate realities: Increasing exposure to physical climate risks has reinforced the importance of embedding adaptation considerations into financial decision-making.
• Scaling sustainable finance: An enhanced taxonomy strengthens confidence and supports the continued growth of sustainable capital flows across Hong Kong and the wider region.
• Advancing global alignment: Phase 2A reflects international best practice and contributes to broader efforts to improve coherence and interoperability across taxonomy frameworks globally. 

Looking ahead 

The Hong Kong Taxonomy is designed as a living framework. With Phase 2A now finalised, work will move into the next phase of development, further expanding coverage and deepening both mitigation and adaptation activities and measures in response to evolving market needs and climate priorities. 

By closing the consultation loop and moving decisively into implementation, Hong Kong reinforces its role in shaping practical, forward-looking tools that help channel capital towards a low-carbon, climate-resilient future. 

‘Till the next time,  
Climate Bonds