The Hong Kong Monetary Authority (HKMA) has launched a public consultation on the Phase 2B prototype of the Hong Kong Taxonomy for Sustainable Finance, seeking market input to expand the territory’s framework for green and transition classification.
The taxonomy is designed as a standardized market tool to clarify definitions for green and sustainable activities, streamline capital allocation towards regional decarbonisation, and prevent greenwashing. The Phase 2B prototype builds on the Phase 2A framework published earlier this year, incorporating technical updates informed by government policy, market demand, and updated climate science.
Key structural updates within the Phase 2B prototype include:
- Expansion of Mitigation Activities: The framework adds 10 new economic activities, raising the total covered across the taxonomy from 25 to 39 following activity re-categorisation.
- Transition Pathways for Heavy Industry: The update incorporates enabling technologies, including battery manufacturing and recycling, alongside low-carbon equipment production. It also introduces technical transition criteria for hard-to-abate sectors such as aviation, iron, and steel to channel capital toward progressive decarbonisation.
- Process-Based Adaptation Framework: Responding to location-specific physical risks, Phase 2B establishes a process-based methodology to evaluate climate change adaptation measures. Aligning with Hong Kong Special Administrative Region Government guidelines, the update introduces 24 specific adaptation measures—comprising 11 whitelisted and 13 non-whitelisted items—focusing initially on coastal defense and flood risk management.
The public consultation opened on 7 September 2026 and will run through 7 October 2026. The full consultation paper has been published on the official HKMA website for market review and stakeholder submissions.
