9 October 2025 Mr Eddie Yue, JP Chief Executive Hong Kong Monetary Authority 55th Floor, Two International Finance Centre 8 Finance Street, Central Hong Kong
Dear Eddie,
Consultation Paper on Prototype of Hong Kong Taxonomy for Sustainable Finance
(Phase 2A) (“the Taxonomy”)
The Hong Kong General Chamber of Commerce welcomes the opportunity to express views on the captioned consultation.
We support the Taxonomy’s objective: to scale up sustainable finance and prevent "greenwashing" by establishing a common and credible language for investors. Advancements in this critical framework are vital for consolidating Hong Kong’s position as a low-carbon economy and leading green finance hub.
As to practical implementation, we respectfully propose a holistic and forward-looking approach that accommodates emerging industries and evolving market dynamics. It is equally important that the Taxonomy maintains global alignment while remaining attuned to Hong Kong’s distinctive local context, including its energy profile and decarbonisation pathway. Together with the adoption of practical and proportionate standards across sectors, and the continued positioning of the Taxonomy as a voluntary framework, such an approach would promote flexibility and encourage broad industry engagement.
We hope you will find our comments useful to your deliberations.
Yours sincerely,
Patrick Yeung
CEO
Encl.
HKMA Consultation Paper on Prototype of Hong Kong Taxonomy for Sustainable Finance (Phase 2A) (“the Taxonomy”)
HKGCC welcomes the opportunity to respond to this consultation paper (CP). We set out below our general comments on this initiative. As we are an industry-wide business association, we defer to businesses in the relevant sectors (and their trade associations) to answer the specific consultation questions in the CP, since the answers may differ from sector to sector.
1. We agree with the primary goal of the Hong Kong Taxonomy, which is to scale up green and sustainable finance flows to support the transition to a low-carbon economy. This includes helping to mitigate and adapt to the impacts of climate change, in line with Hong Kong’s carbon neutrality goals and broader global climate objectives.
2. The concept of a taxonomy for environmentally-sustainable activities is a valuable tool in achieving these objectives, as has been recognised in other jurisdictions as well as Hong Kong, such as the EU. By creating a “common language” for these activities, this enables investment to be more accurately channelled to sustainable activities, allow businesses to compete on a level playing field for investment, and prevent “greenwashing”. One challenge in environmental, social and governance (ESG) reporting is the variability in what and how companies disclose, which complicates sustainable investment decisions. While the Hong Kong Taxonomy for Sustainable Finance (Prototype 2A) doesn't directly standardise reporting, it plays a crucial role in defining what qualifies as “green” or “transition”, thereby supporting more consistent and credible investment assessments.
3. We note that HKMA has taken an incremental approach in proposing which sectors and activities to include in the Taxonomy, focusing on those that are more relevant in the Hong Kong context. While this approach is understandable at this relatively early stage, we recommend that in Phase 2B a more holistic view be taken, bearing in mind that industries and activities that do not currently exist in Hong Kong may spring up in future. The Taxonomy could address these potential industries and activities, avoiding the need for extra analysis and consultation if and when they do arise. This would also help to eliminate any time lag before such industries and activities are included in the Taxonomy, and to maintain a level playing field between companies seeking “green” or “transition” investment.
4. We acknowledge the objective of aligning, as far as possible, the Taxonomy with those of other jurisdictions such as Mainland China, Singapore, Australia and the EU. At the same time, it is equally important that the Taxonomy reflects Hong Kong’s unique local context – including its energy mix, infrastructure constraints, and decarbonisation pathways. As such, supporting actions specified in Hong Kong’s Climate Action Plan 2050 could directly contribute to the decarbonisation of Hong Kong. A taxonomy that is both globally aligned and locally relevant will be more practical and impactful for market participants.
5. The power sector, in particular, is a key potential driver of Hong Kong’s decarbonisation. In this regard, the next phase of the Taxonomy (Phase 2B) could consider including natural gas-fired power generation as a transition activity, with practical emissions thresholds and sunset dates, to reflect its role as a bridge fuel in Hong Kong’s energy transition. We also recommend recognising the decarbonisation role nuclear power generation plays, given its share in Hong Kong’s regional energy mix. This would also align with China’s Green Finance Endorsed Project Catalogue (2025), which classifies nuclear energy as a clean energy source.
6. We also note that in some areas, the Hong Kong Taxonomy appears to be more stringent than other jurisdictions. For example, for activity B-004 (transportation of freight by sea), the Hong Kong taxonomy introduces additional requirements for classification as a transition activity compared to frameworks in Australia, the EU and Singapore. While ambition is welcome, it is important to ensure that criteria remain practical and proportionate, particularly in sectors where decarbonisation pathways are still evolving.
7. We also welcome and support HKMA’s confirmation that the Taxonomy will be voluntary, not mandatory. Listed companies will have sufficient incentives to follow the taxonomy if they wish to attract investment, without needing to be legally-compelled to do so. For non-listed companies who may be seeking a listing, the same will apply. Those who wish to maintain non-listed status (especially Small and Medium-Sized Enterprises (SMEs)) should especially not be subject to any legal obligation to comply with the taxonomy: this would be unduly onerous.
8. We would also like to highlight specific concerns regarding the assessment of data centre operations. Many businesses in Hong Kong utilize public cloud services instead of operating their own on-premises data centres. The current metrics proposed for assessing data centres (such as Power Usage Effectiveness (PUE) and Water Usage Effectiveness (WUE)) need clarification regarding their application to cloud service providers, particularly since customers typically use multiple data centres to run their IT workloads. We recommend that HKMA considers the global metrics of cloud service providers when assessing activity classifications (green or transition activities). Furthermore, there are practical concerns regarding the Global Warming Potential (GWP) requirements for refrigerants used in chiller systems. Many existing systems in Hong Kong use refrigerants such as R134a, which has a GWP higher than 675. Given that refrigerant types cannot be replaced before system decommissioning, we suggest that GWP considerations should only apply to new data centres, where there is still flexibility in choosing refrigerant types.
9. Finally, when Phase 2A, and subsequent phases, are launched, it would be useful to conduct webinars and issue guidelines for businesses to explain the impact of the new initiatives.
HKGCC Secretariat October 2025
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