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Hong Kong Exchanges and Clearing Limited (HKEX) has launched its new investment platform dedicated to sustainable finance amidst rising demand from Asian investors. Called the Sustainable and Green Exchange (STAGE), the new platform serves as an online product repository of ESG-focused products across multiple sectors as well as a resource hub for sustainable finance across the region.
Launched on Tuesday (December 1), STAGE is Hong Kong and Asia’s first multi-asset sustainable investment product platform, and is now fully operational following the initial announcement made by HKEX in June this year.
At opening, it features 29 sustainability-related products from Asian corporations listed on the HKEX, including green and transition bonds from a variety of sectors, from financial services firms to utility companies and ESG-related exchange traded products. HKEX says that over time, it expects the range and scope of STAGE will increase.
The opportunities in sustainable finance in Asia are growing rapidly. There is a need for information about sustainable products and ESG data, and we hope that STAGE will help meet that demand.Wilfred Yiu, Head of Markets, HKEX
In addition to acting as an online product repository, STAGE aims to be a platform to provide resources and information related to sustainable finance, as well as a database of voluntary reporting for ESG-linked financial products to promote transparency and act as a benchmark for investors. Issuers that are included within STAGE must provide disclosures on their products, including proceeds and post-issuance reports and sustainability metrics.
Commenting on the launch, HKEX head of markets Wilfred Yiu said: “The opportunities in sustainable finance in Asia are growing rapidly. There is a need for information about sustainable products and ESG data, and we hope that STAGE will help meet that demand.”
“STAGE will connect market participants, issuers and investors, providing a one-stop shop for reliable green data and products,” Yiu added.
Among some of the content that users can access on the new platform to encourage greater engagement with green finance are case studies, webcast videos, research papers and guidance materials, all related to different aspects of the growing sector, from ESG integration to sustainable investing approaches.
“Ultimately, we aim to guide future capital flows to support our society’s transition towards sustainability,” said Grace Hui, head of green and sustainable finance at HKEX. “We are actively encouraging all regional issuers of green and sustainable products to consider application for inclusion on STAGE, in turn helping to build Asian financial markets’ own sustainability.”
HKEX’s announcement shortly follows the completion of Hong Kong’s first-ever interest rate swap linked to United Nations Sustainable Development Goals (SDG), which comes amidst the sustainable investing push the industry has experienced since the coronavirus crisis, especially as ESG investing proves its outperformance against stock market tumbles and sharp volatility seen this year.
Ultimately, we aim to guide future capital flows to support our society’s transition towards sustainability.Grace Hui, Head of Green & Sustainable Finance, HKEX
The derivative transaction, conducted by New World and DBS Group, will provide a hedge against interest rate risk related to the HK$1 billion (US$129 million) five-year sustainability-linked loan the property giant took from the Singapore-based bank back in November 2019.
A similar five-year sustainability-linked loan of HK$1 billion (US$129 million) was also taken by Link REIT, the first real estate investment trust in Hong Kong and the largest in Asia as measured by market capitalisation, secured from OCBC in June this year, in yet another show of strengthened commitment to green finance in Hong Kong.
Regulators in Hong Kong have also taken steps to support the sustainable finance push across the city and wider Asia, establishing a new green finance steering group in May with the Securities and Futures Commission (SFC). The cross-agency group will coordinate between different sectors to ensure greater climate risk disclosure in investments.
Lead image courtesy of HKEX.