Hong Kong’s financial regulators have set out a new three-year roadmap aimed at deepening the city’s position in Asia’s fast-growing sustainable finance market. The strategy places mandatory climate disclosures, an expanded sustainable finance taxonomy, and cross-border carbon market development at the center of Hong Kong’s ambitions through 2028.

The roadmap was released on January 29 by the Green and Sustainable Finance Cross-Agency Steering Group, co-chaired by the Hong Kong Monetary Authority and the Securities and Futures Commission. The group, established in 2020, brings together financial, environmental, and market regulators to coordinate policy across the financial system.

Consolidating the Disclosure Framework

A core priority of the roadmap is to reinforce Hong Kong’s existing sustainable finance infrastructure by tightening disclosure and assurance requirements. Large publicly accountable entities will be required to fully adopt climate-related disclosure standards issued by the International Sustainability Standards Board by 2028, in line with a government roadmap published in late 2024.

Regulatory focus is also expanding beyond disclosure into assurance. In December 2025, the Accounting and Financial Reporting Council launched a consultation on sustainability assurance frameworks, signaling that regulators expect climate and sustainability data to be subject to increasing scrutiny and credibility checks.

According to the HKMA, these measures are intended to ensure that Hong Kong’s sustainable finance market evolves with stronger consistency, comparability, and trust as capital flows into climate-related investments across Asia.

Read more: Puro.earth Introduces “Issuance Plus” to Speed Up Carbon Removal Credit Supply

A Broader and More Nuanced Taxonomy

Alongside disclosure reforms, Hong Kong has significantly expanded its sustainable finance taxonomy. In January 2026, the HKMA published Phase 2A of the Hong Kong Taxonomy for Sustainable Finance, extending coverage from 12 to 25 economic activities across six sectors.

The updated taxonomy introduces explicit transition elements and adds climate change adaptation as a standalone environmental objective. This marks a shift from a sole focus on mitigation toward addressing physical climate risks and extreme weather impacts that are increasingly material for Asian economies.

By broadening definitions of what qualifies as sustainable or transition-aligned activity, regulators are seeking to provide clearer guidance to investors, lenders, and issuers operating across diverse regional markets.

Scaling Transition and Adaptation Finance

The second pillar of the roadmap targets transition and adaptation finance, two areas where Asian markets remain less developed than their European counterparts. Regulators plan to issue practical guidance, tools, and case studies designed to help financial institutions structure and scale transition finance products.

For adaptation finance, the emphasis will be on market readiness and product innovation, reflecting growing awareness of climate resilience risks across infrastructure, real estate, and supply chains in the region.

SFC leadership has framed this work as essential to ensuring that transition finance delivers credible, science-based outcomes rather than superficial labeling, particularly as scrutiny from global investors intensifies.

Cross-Border Carbon Markets and Regional Positioning

Cross-border carbon market collaboration is another central feature of the roadmap. Hong Kong continues to position itself as a gateway for international carbon credit trading, linking mainland China with global voluntary and compliance markets. The expanded taxonomy is expected to support this ambition by providing clearer classifications for sustainable and transition-aligned activities.

The Steering Group’s membership reflects the breadth of the initiative, spanning financial regulators, environmental authorities, pension supervisors, and market infrastructure bodies, including Hong Kong Exchanges and Clearing Limited. This multi-agency structure underlines the government’s intent to embed sustainable finance across the entire financial ecosystem rather than treating it as a niche segment.

Explore OneStop ESG Marketplace: Regulation and Compliance

Implications for Market Participants

For banks, asset managers, insurers, and listed companies, the roadmap establishes a clear timeline for compliance and capability building. The 2028 deadline for ISSB-aligned disclosures creates near-term pressure to upgrade data systems, governance structures, and internal climate risk management processes.

For digital asset firms and newer market entrants, the message is equally clear. Sustainability disclosures and climate governance are becoming part of the baseline expectations for regulatory approval and access to institutional capital in Hong Kong.

Taken together, the 2026–2028 roadmap signals a shift from market development to market discipline. Hong Kong’s regulators are moving to ensure that growth in sustainable finance is supported by robust standards, credible data, and practical transition pathways, reinforcing the city’s bid to remain a leading sustainable finance hub for Asia’s low-carbon and climate-resilient transition.

Explore ESG Solutions on our marketplace - OneStop ESG Marketplace.

Keep abreast of the top ESG Events on OneStop ESG Events.

OneStop ESG Educate: Your go-to source for top ESG courses and training programs tailored to your needs.

Stay informed with the latest insights on OneStop ESG News.

Discover meaningful career opportunities on OneStop ESG Jobs.