Transition, resilience, and growth: Hong Kong’s Sustainable Taxonomy Phase 2A

Hong Kong now stands at the intersection of climate urgency and financial leadership. This summer, the city experienced its heaviest August rainfall since records began in 1884, with over 350 mm of rain flooding critical infrastructure and triggering multiple "black" rainstorm warnings, stark evidence of the intensifying risks it must face. 

Yet, such rising climate threats not only highlight risks but also underscore opportunities for sustainable investment. Hong Kong is well placed to respond: In 2024, it issued USD 43.1 billion in international green, social, sustainability, and sustainability-linked (GSS+) bonds, representing 45% of Asia’s cross-border sustainable bond market. This strong performance provides a solid foundation for the Hong Kong Taxonomy, which serves to further direct capital towards both transition and resilience priorities. 

To provide a common, credible standard for sustainable investments, the Hong Kong Monetary Authority (HKMA), with strong technical support from Climate Bonds Initiative (Climate Bonds), has launched Phase 2A of its Sustainable Finance Taxonomy for public consultation, which will be open until 8 October 2025, 12pm (HKT). Drawing on experience supporting over 30 national and regional governments, Climate Bonds has helped design taxonomies that align with the Paris Agreement and national priorities, ensuring frameworks are both science-based and interoperable. 
 

What’s new in phase 2A? 

Phase 2A of the Hong Kong Taxonomy introduces a series of important updates that build on the foundation set by Phase 1.  It enhances comprehensiveness and usability, making the framework more practical and inclusive for stakeholders across financial institutions, corporates, and investors. 

The scope has been broadened by adding two new sectors – Manufacturing and ICT, while including new activities and expanding the coverage of existing sectors in Phase 1. It also introduces transition elements, with criteria developed for both transition activities and measures. A further milestone is the inclusion of a new environmental objective: climate change adaptation, reflecting the need to manage the physical risks of extreme weather and build resilience. 
 

Why it matters 

• Financing the transition: Phase 2A introduces categories for transition activities and measures, highlighting a strong need for steady decarbonisation in hard-to-abate sectors.
• Resilience amid real risks: The unprecedented rainfall this August vividly underscores the urgency of embedding climate adaptation into financial decision-making.
• Sustaining capital flow: Hong Kong’s dominance in sustainable debt issuance, combined with taxonomy evolution, boosts investor confidence and broadens the reach of sustainable capital across Hong Kong, Mainland China, Asia and beyond.
• Regional and global synergy: From China’s unified catalogue to Hong Kong’s taxonomy updates, Asia is converging on coherent, interoperable frameworks, propelling the region as a global sustainable finance leader.  

How to get involved 

The consultation paper is available on the HKMA website. Stakeholders across finance, business, academia, and civil society are encouraged to share feedback and help shape a taxonomy that channels capital where it is most needed, driving decarbonisation, building resilience and unlocking sustainable growth. 
 

'Till next time, 

Climate Bonds