Revitalising the cityscape with green financing

18 November 2024

Stand in the street and look around you. The likelihood is that eight of every ten buildings you see, will still be standing in 2050. This is significant, because that’s the year targeted by Hong Kong to reach net zero carbon emissions. And many of the legacy buildings in our cityscape were never designed with energy efficiency in mind. Therefore, retrofitting them to perform better is becoming a priority.

Christine Loh

This vital issue was one of the topics debated at the recent Chinachem Group Sustainability Conference. Moderator for the discussion was Professor Christine Loh, Chief Development Strategist for The Hong Kong University of Science and Technology (HKUST), and previously Under Secretary for the Environment. LIFE+ chatted with Christine ahead of the conference.

Explaining the rationale behind HKUST being the first institution in the city to create an undergraduate course combining sustainability and finance, Christine detailed, “For the last ten years, we’ve seen students being interested in environmental and sustainability type of courses. And all of them get hired. So, the demand is there. And now financial sector companies are saying to us, we need pipeline, we need people who understand sustainability.”

Photo: Christine Loh (right) hosted the panel discussion of the 2023 Chinachem Group Sustainability Conference

However, she also noted that it’s only in the last four years or so that the world of finance has really got on board, moving from simply meeting regulations, to thinking of sustainability as a means of growth and development in itself.

Loh explained how important it is to create a greater understanding that climate change is not simply a problem of emotive symbols such as coal fired power stations. It’s a complex web requiring end to end solutions, led by Government, driven by legislation, and fuelled by the private sector. She went on to describe the need to support these solutions by financing that is thoroughly green and sustainable.

“If banks state they’re going to be carbon neutral by a certain day, that means they’ll phase out lending to higher emissions businesses. They set that trajectory. So as they cut these risks out, we need to have more green investments for them to invest in,” she explained.

"It’s about making existing buildings low-carbon and healthier, better for the people’s well-being. All the stuff that matters to tenants. That’s how you’re going to sell green tech and green financing. That’s what’s going to put Hong Kong on the map."

Christine added, “The main thing I say to my colleagues in Government about this is, you need to be able to do two things. One is at the intellectual conceptual level, where you’ve got to be able to articulate how best to direct money to green projects. And you need finance professionals to really think through the types of projects and products they can put together to offer to the market, the commercial side. Then we need companies which have property assets that need retrofitting, to utilise green financing.”

Turning to the challenge set out in the debate, Christine explained the need to breathe fresh life into buildings which were designed and constructed decades before our current environmental and health considerations. Given that demolition and rebuilding releases huge quantities of carbon and waste, refurbishment with sustainability and long-term resilience front and centre, has become an area of major interest. And she believes the Government is well placed to help others tackle this significant challenge.

“They have certain unique tools that nobody else has. They can penalise, they can tax, they can incentivise, they can subsidise. So, what are some of the tools they can put on the table so we can have a 20-year massive retrofit programme? How can the Government work with companies like Chinachem which have portfolios of buildings. How do they deal with the smaller developers? And what should they be doing for public sector buildings, like housing, hospitals, and museums and so on?”

Professor Loh acknowledged that in the last few years, individual organisations and the public sector have acted on the need for more sustainable performance and accountability. But she sees the next big opportunity for improvement at scale, accepting that no one can operate in isolation.

Hong Kong is already one of the world’s largest green financing hubs, being home to around 220 ESG funds with assets under management of US$170 billion. Alongside this, the Hong Kong Government have since 2019, issued more than US$25 billion of green bonds. But Professor Loh is optimistic that there is still room for growth and improvement. The debate continues.

Revitalising the cityscape with green financing

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