On his recent visit to the Middle East, Hong Kong Chief Executive John Lee Ka-chiu chose the Qatar Investment Authority as his first stop for establishing a “robust investment relationship with Qatar”, an oil-rich country that has joined the Belt and Road Initiative and aligned it with its own National Vision 2030. 

Earlier, Lee reportedly said that the BRI would give businesses “deeper access to the Middle East” and that Hong Kong was seeking to “reduce dependence on Western markets and build new links with emerging economies”, including but not limited to the Gulf countries.

With its mature capital markets and extensive international financial network, Hong Kong has solidified its position as Asia’s premier hub for green finance. Since the launch of the Government Sustainable Bond Programme, formerly the Government Green Bond Programme, the city has rapidly expanded its green finance capabilities.

According to the latest report from the Climate Bonds Initiative, Hong Kong’s sustainable debt market has experienced record growth, driven primarily by government issuances. This surge has positioned Hong Kong as a regional leader and, for the first time, placed it among the world’s top 10 jurisdictions for green bond issuances.

As countries taking part in the BRI strive to meet climate commitments and infrastructure demands, Hong Kong’s financial institutions can provide customized financing solutions, including sustainability-linked bonds, green loans, and blended finance models. Moreover, by leveraging partnerships with multilateral organizations like the Asian Infrastructure Investment Bank, Hong Kong can help de-risk green investments and attract institutional capital to the Belt and Road projects.

Over the past decade, Hong Kong has made significant strides in strengthening environmental, social, and governance (ESG) principles and disclosures. In December, the Hong Kong Special Administrative Region government introduced the Roadmap on Sustainability Disclosure, outlining a structured approach for listed companies and financial institutions to fully adopt International Sustainability Standards Board-aligned sustainability disclosure standards by 2028. These initiatives enhance transparency, improve investor confidence, and align Hong Kong with international best practices.

By integrating ESG principles into corporate governance, Hong Kong provides an ideal platform for enterprises seeking sustainable growth under global regulatory frameworks. Additionally, its robust legal system and expertise in international arbitration offer vital risk management solutions for cross-border green investments, ensuring compliance with sustainability standards.

Beyond finance, Hong Kong plays a critical role in green technology transfer and innovation. The city actively promotes collaborative platforms for technology demonstration projects, particularly in clean energy, green buildings, and carbon trading. Hong Kong enterprises have already contributed to sustainable infrastructure projects across Southeast Asia, providing technical expertise and innovative solutions.

To further accelerate technology adoption, Hong Kong can expand tailored training programs for professionals in countries taking part in the BRI, strengthening their capabilities in renewable energy, water management, and low-carbon urban planning. Moreover, fostering deeper collaboration between Hong Kong universities, research institutions, and BRI partners can facilitate cross-border knowledge exchanges and innovation.

Many BRI countries, including Qatar, are aiming for a robust financial system to attract international capital. They are eyeing green financial products and Kuwait, the second stop on Lee’s Middle East visit, is now fostering a potential fintech ecosystem.

Meanwhile, disparities in credit ratings and economic conditions create financing imbalances, limiting equitable access to sustainable development funding.

In addition, some projects have prioritized short-term economic gains over long-term environmental sustainability, leading to ecological degradation. Strengthening environmental impact assessment mechanisms and embedding sustainability criteria into investment decision-making is crucial to achieving a balanced approach.

Low R&D investment and talent shortages in green technology hinder many BRI countries from fully leveraging emerging sustainability innovations. Weak cross-border technology cooperation further exacerbates these challenges, underscoring the need for increased funding and multilateral collaboration.

Many enterprises taking part in the BRI have underdeveloped ESG structures and inadequate sustainability disclosure practices. Without standardized reporting frameworks and stronger regulatory oversight, investors face difficulty assessing project sustainability, increasing the risk of unsustainable investments.

In this regard, Hong Kong should leverage multilateral platforms to enhance policy coordination across the BRI. By collaborating with institutions such as AIIB and the United Nations, Hong Kong can facilitate alignment in green finance regulations and sustainability frameworks. Additionally, Hong Kong’s integration into the Guangdong-Hong Kong-Macao Greater Bay Area presents an opportunity to develop regional green industry clusters, allowing for more efficient green technology export and knowledge transfer.

As a global financial hub, Hong Kong should further develop its green bond market and introduce innovative financial instruments such as sustainability-linked bonds and carbon credits. By providing risk-sharing mechanisms and policy incentives, Hong Kong can encourage more BRI enterprises to access its green finance ecosystem, thereby addressing funding shortages.

To ensure sustainable development, Hong Kong should integrate enhanced environmental impact assessments into its project approval processes. Incentivizing clean technologies through tax benefits and subsidies will encourage businesses to adopt greener practices. Additionally, fostering renewable energy industries and circular economy initiatives will reduce reliance on carbon-intensive sectors.

Hong Kong should establish cross-border R&D partnerships to co-develop green technologies with BRI nations. Strengthening government-backed technology incubators and innovation hubs will provide an additional boost to sustainability-focused startups and enterprises.

To support ESG adoption in BRI countries, Hong Kong can enhance corporate disclosure standards and provide ESG training programs. Assisting enterprises in adopting international best practices will ensure greater transparency and accountability in BRI projects, making them more attractive to responsible investors.

Hong Kong’s strengths in finance, governance, and innovation position it as a key enabler of the green BRI. Its efficient capital markets, strong regulatory framework, and deep expertise in ESG and green finance create a robust foundation for sustainable development in countries taking part in the BRI.

Hong Kong has made significant progress in promoting sustainability through its leadership in green finance, ESG standard-setting, and cross-border collaboration. Moving forward, policymakers, investors, and businesses must work together to deepen Hong Kong’s role in the green BRI, ensuring that sustainable development remains at the core of global economic cooperation. By fostering an inclusive and green future, Hong Kong can play a pivotal role in shaping a more resilient and environmentally responsible BRI.

The author is director of research at the Institute of Innovative and High-Quality Development (Hong Kong).

The views do not necessarily reflect those of China Daily.