As climate change warnings grow louder and the world continues its warming trajectory, the need for awareness in Asia Pacific (Apac) about the challenges and opportunities to meet net-zero goals is becoming more urgent. As the market grapples with complex subjects such as transition finance, there are several organisations helping lead this charge by offering practical help to professionals keen to learn more.
On a recent visit to Asia, Paul Moody, managing director, global partnerships & client solutions, CFA Institute, told FinanceAsia: “Hong Kong is leading the way in sustainability. It has a commitment to upskilling and talent, and Hong Kong is a green finance hub, such as green bonds – where there is huge demand, for a gateway into [mainland] China. So capital is always coming in and out. Green finance and technology is a growing phenomenon and something that I’m very positive about.”
For example, in February 2024, Hong Kong's government successfully issued an oversubscribed HK$6 billion ($767 million) digital green bond offering.
Citing a practical measure for the Special Administration Region (SAR) to improve its carbon footprint: “In Hong Kong, there is a huge opportunity for buildings to be better designed to be more energy efficient.”
One of the ways Hong Kong's firms are improving is through their staff taking part in courses run by the CFA Institute.
London-based Moody (pictured) said: “For the Certificate in ESG Investing, out of about 40,000, some 17,000 of our registrants are based in Hong Kong. The Hong Kong Monetary Authority (HKMA) can reimburse each participant at least 80% of the cost of each course through the Pilot Green and Sustainable Finance Capacity Building Support Scheme. It is around a 100-hour course, and people tend to share it on their LinkedIn.”
Speaking from CFA Institute's Hong Kong office in Central, he said there is a potential across the region: “There is a huge opportunity for us to add value – in particular, in a market such as China. Hong Kong is the top market globally and in Apac for registrations, accounting for one out of every three candidates globally. Five Apac markets ranked in the top 10 globally, including Hong Kong, Singapore, Australia, India and Taiwan.”
Encouragingly, those taking the courses are not just in finance. Moody said that for CFA’s ESG-related certificates, around 20% of participants come from finance, and the biggest sector was from businesses such as green industries, the public sector, consultancy, research and supply chain.
He said: “We are getting a broad range of candidates. Anybody can take our courses, and some companies reimburse their staff.”
The CFA Institute has made another recent move in the green space with the launch of its Climate Risk, Valuation, and Investing Certificate, which launched over the last six months and is also targeting finance and other professionals. There is also an emphasis on building a community.
Moody explained: “This will look at the risk in a stock or bond. Industry practitioners will come in and take a group of people on this journey. It is a like a pyramid with environmental, social and governance (ESG), climate and then the next one will be biodiversity. We also want to create a community where people can share ideas and thought leadership and can help careers.”
Mewnwhile the body's flagship business CFA Program takes three years and those who pass (many people fail) often mark this on their business cards.
COP launch
Moody attended his first United Nations Climate Change Conference (COP) last year in Dubai at COP28, the largest climate change conference on the planet.
Reflecting on the event, Moody said: “The commitment to trebling renewable energy was encouraging. Once you get critical mass it becomes an economic decision.”
“There were a huge number of conversations around carbon markets – although not a huge amount of money going into it. The closer you get to net-zero, the harder it is to do it, so you will need better technology. We also discussed blended finance – on a capital / macro basis -- there is appetite but a gap in funding,” he continued.
There has been growing criticism of COP, for example having its own large carbon footprint with participants flying in from all over the world, and for allowing fossil fuel exporting nations too much influence over draft texts. This year COP29 will take place in Baku, Azerbaijan in November.
However, Moody defended the conference. He said: “You could argue COP has grown too large, but it is much better to have it than not to have it.”
COP also gave the opportunity for the Capacity-building Alliance of Sustainable Investment (CASI) to launch -- creating a forum to help asset managers share knowledge around best practices, for example around green taxonomies. Dr Ma Jun, president of the Institute of Finance and Sustainability (IFS), helped launch CASI and in addition to the CFA Institute, it already has Standard Chartered Bank and HSBC as founding members. Altogether there are 42 members, including the Hong Kong Green Finance Association (HKGFA).
Moody shared some of the group's ambitions: “We are planning four annual physical events, including in Brazil and Hong Kong, and also an online component. In particular, CASI wants to support companies and countries across Africa, Latin America and less developed Asian economies.”
The CFA Institute, which is a not-for-profit organisation, has approximately 550 employees across the world and around 200,000 charterholders.
