The Hong Kong Exchanges and Clearing Ltd (HKEX) announced on Monday that it has teamed up with major corporations and financial institutions such as HSBC and Tencent to create an international carbon market.
HKEX has enlisted 11 initial members to form the Hong Kong International Carbon Market Council, which consists of local banks and international lenders such as HSBC, Standard Chartered, BNP Paribas, ANZ and the Bank of China. Large corporations like Tencent and Cathay Pacific Airways are also members of the Council.
According to HKEX CEO Nicolas Aguzin, these major enterprises will play a critical role in supporting HKEX’s objective of creating a leading carbon market.
The Council will learn from its members how to create an effective carbon market, said HKEX. The primary goal of this collaboration is to establish an international carbon market through Hong Kong’s status as a global financial center. It will be used to help the green financial ecosystem in Hong Kong and Mainland China thrive and will pave the way for Hong Kong to become a carbon trading hub in Asia.
HKEX has been exploring the opportunities of rolling out green finance products over the past years. It became member of the Glasgow Financial Alliance for Net Zero (GFANZ) and the Net Zero Financial Service Providers Alliance (NZFSPA) in 2021. Furthermore, it teamed with Guangzhou-based China Emissions Exchange (CEEX) in March to facilitate collaboration in improving sustainability through carbon finance.
Global efforts to combat climate change and its negative impact are increasing and overwhelming voluntary carbon markets with strong demand.
Singapore, another financial hub in Asia, is also working on establishing a global carbon market. For instance, Singapore exchange, together with DBS Bank, Standard Chartered, and Temasek, announced last year the launch of Climate Impact X (CIX), a worldwide spot trading program aiming to protect threatened tropical forests in Southeast Asia through high-quality carbon credits.