Hong Kong’s sustainable debt market has achieved its largest growth yet, driven by government issuance, leading its peers in the Asian region and entering the global top ten jurisdictions in green bonds issuance for the first time.
This was revealed in The Climate Bonds Initiative’s latest and sixth edition of the ‘Hong Kong Sustainable Debt Market Briefing 2023’. The report shows that in 2023, Hong Kong’s sustainable debt market saw the largest growth in its history, with GSS+ debt originating from Hong Kong reaching USD 18.2 billion, marking a 236% year-on-year increase.
The report provides a comprehensive overview of Hong Kong’s sustainable debt market using Climate Bonds’ green, social, sustainability (GSS), and sustainability-linked bond (SLB) datasets, in alignment with Climate Bonds Database methodologies. This report is produced in collaboration with the Hong Kong Monetary Authority (HKMA), the Hong Kong Green Finance Association (HKGFA), and with support from Standard Chartered.
The report shows that the majority of the debt (USD 15.6 billion) was issued under the green theme, while the social theme accounted for USD 2.6 billion. Social and sustainability (S&S) issuance volumes from Hong Kong issuers grew for the third consecutive year in 2023, reaching USD 2.56 billion, up from USD 1.98 billion in 2022.
In 2023, Hong Kong’s green bonds volume entered the global top ten for the first time, with an impressive year-on-year growth of 173.3%. This surge was driven by a record single-year growth of USD 1.4 billion in government issuance from Hong Kong. An overwhelming 92% (USD 14.4 billion) of the green bond volume came from the HKSAR Government, with the remainder issued by financial corporates. In 2023, the HKSAR Government was the fourth largest source of aligned government green bonds globally, following the United Kingdom, Germany, and Italy, and is the fifth largest cumulative government green bond issuer.
Historically more diverse, Hong Kong’s issuer base saw a reduced share of non-government volumes in 2023 due to the economic downturn and the easing of pandemic restrictions. However, as conditions improve, there is an opportunity for Hong Kong to enhance the volume and quality of its sustainable debt markets, revitalizing the breadth of the issuer base and restoring private sector issuance to historical levels.
By the end of 2023, Climate Bonds had reached USD 2.8 trillion in global green bond volume, surpassing USD 3 trillion by mid-2024. Achieving Climate Bonds’ target of USD 5 trillion annually by 2025 will require a substantial increase in large deals. Hong Kong’s vital role in capital mobilization can support both its own and Mainland China’s transition toward a green, sustainable future, benefiting future generations.