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Hong Kong Monetary Authority Acting Chief Executive Arthur Yuen said the HKMA had published a Phase 2B prototype of its Sustainable Finance Taxonomy for consultation. The proposed additions cover low-carbon technology and battery activities, hard-to-abate sectors, and climate adaptation measures including shoreline protection and flood management. Consultation details and the full next steps are not included in the available speech text.
Hong Kong Monetary Authority Acting Chief Executive Arthur Yuen said the HKMA had published a Phase 2B prototype of its Sustainable Finance Taxonomy for consultation, adding proposed classifications for transition activities and climate resilience. Speaking on September 7, 2026, at the HKGFA-GBA Green Finance Alliance Annual Forum in Hong Kong, Yuen said the proposals are intended to give investors and lenders a clearer basis for identifying eligible green, transition and adaptation finance.
The proposed transition categories include the manufacture and recycling of batteries and the manufacture of low-carbon technologies, which Yuen described as enabling parts of decarbonisation. The prototype also covers air transport and iron and steel, sectors where cutting emissions is difficult and financing needs are substantial. The speech presents these additions as a way to extend the framework beyond activities already considered green.
On climate resilience, Phase 2B proposes expanded adaptation measures addressing risks to Hong Kong, initially including shoreline protection and flood management. Yuen said the prototype introduces a process-based approach intended to help financial institutions identify and fund adaptation efforts that address physical climate risks. These are proposals in a consultation prototype; the speech does not establish that the categories have been finalised or adopted as binding requirements.
Yuen also cited the HKMA’s broader effort to create clear definitions and transparent expectations that can be used across markets. He said banks and corporates were already integrating the taxonomy into financing and investment decisions and that taxonomy-aligned bonds and loans had come to market. Those statements describe the HKMA chief executive’s account of market use; the speech provides no transaction totals or independent measure of adoption.
A Wider Route for Green Capital
The proposed categories matter because a sustainable finance classification system can shape which activities lenders and investors recognise as green, transition-aligned or resilience-focused. Including hard-to-abate industries and enabling technologies could make the taxonomy relevant to projects that are not already low-emission but may contribute to decarbonisation. Adding adaptation measures also addresses a different financing need: preparing communities and infrastructure for physical climate hazards.
Yuen framed the taxonomy as a tool to reduce uncertainty that can deter capital when rules vary or transition pathways are unclear. He argued that shared definitions could help connect financing across borders, reflecting Hong Kong’s role as an international financial centre. Whether the proposed framework achieves that result will depend on its final criteria, how investors and companies apply them, and whether other markets recognise the classifications.
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The Taxonomy’s Earlier Phases
The Phase 2B prototype is part of a staged development of the Hong Kong Taxonomy for Sustainable Finance. In his speech, Yuen dated Phase 1 to May 2024 and Phase 2A to January 2026. He described the latest prototype as a further step and stressed that the taxonomy would continue to evolve as policies, markets and technologies change.
The forum was convened by the Hong Kong Green Finance Association and the GBA Green Finance Alliance. Yuen congratulated the association on taking the alliance’s chairmanship and commended the launch of a Green Accelerator programme earlier that day. He said Hong Kong would support joint efforts to raise the Greater Bay Area’s profile on regional and global platforms. The speech’s focus, however, was the taxonomy consultation and the role of finance in the region’s climate transition and resilience.
“The barrier is not a shortage of liquidity or ignorance of the urgency. Rather, it is the high premium of uncertainty.”
— Arthur Yuen, HKMA Acting Chief Executive
low-carbon technology manufacturing tools
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Consultation Details Still Pending
The available speech text does not provide the consultation closing date, submission process or a timetable for deciding whether to adopt the proposed criteria. It also does not reproduce the prototype’s technical thresholds, eligibility tests or supporting documentation, so the precise conditions for classifying activities cannot be assessed from the speech alone.
Yuen’s remarks do not quantify how many financial institutions or transactions currently use the taxonomy. Nor do they establish whether overseas regulators or markets will formally recognise its classifications. The Phase 2B document is described as a prototype for consultation, so its proposals should not be treated as final rules.
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From Prototype to Market Practice
The immediate next step is the consultation on the Phase 2B prototype. Feedback from financial institutions, companies and other stakeholders may inform the final criteria, but the speech does not specify when the consultation will close or when the HKMA expects to publish a final version. Those dates and any changes to the proposed categories remain to be confirmed.
Yuen said the HKMA would work with industry to build expertise and share practical experience, with the aim of making taxonomy alignment a more routine part of sustainable investment assessment. He also said the framework would keep evolving. Readers can expect the next material developments to be the consultation timetable, any revisions to the prototype and further information about implementation and market uptake.
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Key Questions
What did the HKMA announce at the forum?
Acting Chief Executive Arthur Yuen said the HKMA had published a Phase 2B Sustainable Finance Taxonomy prototype for consultation on September 7, 2026.
Which activities are included in the proposed transition categories?
The prototype adds battery manufacture and recycling, low-carbon technology manufacturing, and activities in air transport and iron and steel, according to Yuen’s speech.
What resilience measures does Phase 2B address?
The proposed adaptation measures initially focus on climate risks to Hong Kong, including shoreline protection and flood management. The prototype also proposes a process-based approach for identifying and financing adaptation efforts.
Are the Phase 2B criteria final?
No. Yuen described Phase 2B as a prototype for consultation. The available speech does not give a consultation deadline or confirm when final criteria will be issued.
What happens after the consultation?
The HKMA is expected to consider consultation feedback, but the speech does not state a publication schedule or finalisation process. Yuen said the authority would continue working with industry and update the taxonomy as conditions change.
Source: primary
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