The Hong Kong Monetary Authority has launched a public consultation on the prototype for Phase 2B of the Hong Kong Sustainable Finance Classification Framework.

On September 7, the Hong Kong Monetary Authority (HKMA) launched a public consultation on the prototype of Phase 2B of the Hong Kong Sustainable Finance Classification Framework (Hong Kong Classification Framework), which will end on October 7, 2026. The Hong Kong Classification Framework is an important tool that provides market participants with a reference for decision-making in green and sustainable finance. The framework offers clear, transparent, and robust definitions of what constitutes green and sustainable activities to facilitate relevant financing and alleviate concerns about "greenwashing." Since the release of Phase 2A of the Hong Kong Classification Framework earlier this year, the HKMA has been continuously improving the framework. Based on market feedback, public policy, industry needs, and the latest developments in technology and climate science, the Phase 2B prototype introduces several optimization measures to further promote carbon reduction efforts in Hong Kong, facilitate low-carbon transitions in the region, and consolidate Hong Kong's status as an international financial center and a leading hub for green and sustainable finance. Key highlights of the Phase 2B prototype include: Expanding the activities covered under the "Mitigation of Climate Change" category: Ten new economic activities have been added, along with the formulation of technical standards for relevant green and transition activities and measures. This includes adjustments to the categorization of some activities from Phase 2A, increasing the total number of economic activities from 25 to 39. Accelerating the transition within the region: To promote funding directed towards climate change mitigation activities that are critical for speeding up carbon reduction, Phase 2B leverages Hong Kong's strengths as an international financial center by introducing key "enabling technologies" that support other carbon reduction applications, such as the manufacturing and recycling of batteries and the production of low-carbon technologies. It also provides pragmatic transition pathways for hard-to-abate industries, such as aviation and steel manufacturing, guiding funds to support their gradual decarbonization. Improving the assessment methods for the "Adaptation to Climate Change" category: Climate adaptation is highly localized; even when facing the same climate risks, the required measures may vary due to specific circumstances and environmental factors. Therefore, Phase 2B introduces a procedural assessment approach, providing clear guidelines to the market through a systematic framework, ensuring that measures not only make substantial contributions to climate adaptation but also effectively manage risks associated with improper adaptation. In accordance with the guidelines of the Special Administrative Region government, Phase 2B adds 24 adaptation measures (including 11 whitelist and 13 non-whitelist measures), initially focusing on coastal management and flood management, two areas related to the primary climate risks faced by Hong Kong.