HKEX launches Green Equity programme to identify listed green firms
Hong Kong Exchanges and Clearing launched a voluntary designation programme on 20 October to help investors identify listed companies with significant green business activities, assessed by independent reviewers against revenue and investment criteria.
Hong Kong Exchanges and Clearing (HKEX) on Tuesday launched a new voluntary designation programme named HKEX Green Equity, aiming to help investors more readily identify Hong Kong-listed companies with significant green business activities.
The application for the designation started on 20 October, and companies will be assessed by independent Recognised Reviewers based on the HKEX Green Equity Framework, which evaluates the extent to which a company's activities contribute to the green economy, according to HKEX. Companies that successfully meet the framework requirements will be awarded the HKEX Green Equity designation and will be entitled to use the designation mark, subject to ongoing compliance and annual reassessments.
To be eligible, companies must comply with applicable environmental laws, have no outstanding material enforcement actions or material controversies disclosed, and have processes in place to consider the environmental sustainability of their operations. The firms should also comply with applicable social, labour, employment, and health and safety laws, with no material breaches, and have appropriate board-level oversight of their sustainability strategy and implementation.
From the financial side, eligible companies must see more than 50 per cent of annual total revenue generated from green activities, as well as over half of annual total investments allocated to green activities. Besides, fossil fuel activities should contribute less than 5 per cent of enterprises' annual total revenue, along with no more than 5 per cent annual total investment allocation to these activities, HKEX said. All these financial criteria will be assessed against their most recent audited annual financial statements, covering at least 12 months.
HKEX said that HKEX Green Equity complements its broader sustainability offerings, while it also helps promote the adoption of the Hong Kong Taxonomy for Sustainable Finance in capital markets and enhances the visibility of qualifying green businesses to investors globally. Through a transparent framework and independent assessment process, HKEX Green Equity will help strengthen visibility for qualifying companies, support informed investment decisions, and further reinforce Hong Kong's position as a leading international sustainable finance hub, said Paul Chow Koon-ying, HKEX general counsel and group chief sustainability officer.
