HKMA launches public consultation on Phase 2B prototype of Hong Kong Taxonomy for Sustainable Finance

On Mon, 07 Sep, the Hong Kong Monetary Authority (the "HKMA" or the "Authority") commenced a public consultation in respect of Phase 2B prototype of the Hong Kong Taxonomy for Sustainable Finance (the "Hong Kong Taxonomy"). The Hong Kong Taxonomy is designed to serve as a market-enabling instrument facilitating informed decision-making within green and sustainable finance. By establishing clear, transparent, and robust definitions delineating what constitutes qualifying green and sustainable activities, the framework seeks to scale up relevant capital flows whilst mitigating concerns regarding greenwashing.

Regulatory Background and Strategic Objectives

Following the publication of Phase 2A earlier in 2026, the Authority has continued to refine and enhance the regulatory framework. Informed by market feedback, applicable government policies, industry requirements, and recent developments in technology and climate science, the Phase 2B prototype introduces targeted enhancements that further support Hong Kong's decarbonisation efforts, facilitate the region's transition towards a low-carbon economy, and reinforce its standing as an international financial centre and leading hub for green and sustainable finance.

Expansion of Climate Change Mitigation Scope

The Phase 2B prototype broadens the scope of climate change mitigation activities by incorporating ten (10) new economic activities, each accompanied by applicable technical criteria for both green and transition activities. Coupled with the re-categorisation of certain activities previously classified under Phase 2A, the total number of recognised economic activities has been increased from twenty-five (25) to thirty-nine (39).

Facilitation of Regional Decarbonisation Transition

Leveraging Hong Kong's position as an international financial centre, Phase 2B directs financing towards climate change mitigation activities critical for accelerating regional decarbonisation. Specifically, the prototype incorporates key enabling technologies supporting broader decarbonisation applications, including the manufacture and recycling of batteries, and the manufacture of low-carbon technologies. Furthermore, it establishes practical transition pathways for hard-to-abate sectors—namely air transport and iron and steel—to channel capital towards their progressive decarbonisation.

Climate Change Adaptation Methodology Framework

In recognition of the inherently location-specific nature of climate change adaptation, whereby required measures may vary depending on actual circumstances and environmental factors, Phase 2B introduces a process-based approach providing clear guidance through a systematic framework. This ensures that relevant measures make a substantial contribution to climate change adaptation whilst appropriately managing maladaptation risks—defined as counterproductive outcomes arising where adaptation measures are not properly designed, such as the unintended transfer of risk to neighbouring areas when protecting a specific location.

With reference to guidelines issued by the HKSAR Government (including the Shoreline Management Guideline for Coastal Development published by the Civil Engineering and Development Department, and Drainage Services Department Practice Note No. 2/2023 – Guidelines on Flood Resilience), Phase 2B introduces twenty-four (24) adaptation measures comprising eleven (11) "whitelist" measures and thirteen (13) "non-whitelist" measures. The initial focus is directed towards shoreline protection and flood management, which are closely related to key climate risks faced by Hong Kong. For the avoidance of doubt, "whitelist" measures have undergone rigorous assessment and may be directly adopted as deemed compliant with the Hong Kong Taxonomy; conversely, "non-whitelist" measures must be assessed using the process-based approach.

Consultation Period

The public consultation commenced on 7 September 2026 and shall remain open until 7 October 2026. Interested parties are invited to submit their comments prior to the aforesaid deadline.