The Hong Kong Exchanges and Clearing Limited (HK.00388) announced that it plans to establish a sustainable and green exchange named “STAGE”. It is described as Asia’s first sustainable financial information platform. It aims to establish a bond and exchange traded product (ETP) information database within the year, covering sustainability bonds, green bonds and social bonds listed on the Hong Kong Stock Exchange and other ESG-related ETPs.
Grace Hui, head of green and sustainable finance at the HKEX, said that in the future, she expects to expand the products on STAGE to futures, derivatives and even data products that meet green standards. She pointed out that in the initial stage, no fees will be charged to issuers for displaying materials on STAGE. The goal will be to increase products and improve information circulation. Product transactions and settlement will be conducted on the existing platform. The HKEX will benefit financially from the rising number of products.
STAGE will not charge in initial stage to increase green products in Hong Kong
Ms. Hui introduced that there are 44 green bonds listed in Hong Kong, all of which are professional investor products, and there are two other ETPs related to ESG. She believes that green products will continue to grow rapidly. Ms. Hui pointed out that the scale of green bond issuance in Hong Kong in 2016 was approximately HK$2.4 billion, and the scale had increased to HK$75 billion last year.
There is no unified global standard for green finance. The standards in China, European and America are particularly different. Ms. Hui said that the platform has not yet drafted standards but aims to provide information openly right now. ICMA (International Capital Markets Association) and Climate Bonds Initiative are both cooperative partner of the HKEX.
According to the HKEX, issuers participating in STAGE are required to provide relevant reports on a regular basis each year, such as submitting an external review report of the bond framework, disclosing the international standards or principles that their bonds comply with, and setting the types of bonds displayed (sustainable, green or social bonds) etc.
As the NASDAQ has also established a green bond information platform “Sustainable Bond Network”, and even provides data services for institutional investors to compare ESG quality of the companies, Ms. Hui said, the difference between STAGE and other exchange information platforms is that STAGE not only provides information on green bonds, but also plans to provide other ETPs and securities, and functions as a platform for education and publicity.
The HKEX stated that STAGE will provide investors with information and resources on sustainable and green financial products that help them perform due diligence, select and monitor related products for sustainable and green investments.
According to information quoted by the HKEX, the issuance of green bonds in the Asia-Pacific region hit a new high in 2019, reaching US$18.89 billion, of which the green bond market in Mainland China accounted for US$8.13 billion. As of the end of 2019, the cumulative amount of green bonds processed and issued in the Hong Kong market accounted to US$26 billion.
A mandatory requirement for issuers to publish external evaluation reports every year, STAGE assists the issuers in due diligence
