With this in mind, the HKMA will set up shortly a new Centre for Green Finance (CGF) under the Infrastructure Financing Facilitation Office (IFFO). The CGF will serve as the focal point for capacity building and experience sharing. As most of you are aware, IFFO has already become an active facilitator for capacity building in infrastructure investments and it would be logical and timely for the new CGF to be set up to promote capacity and expertise in Green Finance. Only yesterday, IFFO co-organised a seminar with the Chinese Ministry of Finance and IFC on ESG and Impact Investing. So the CGF will provide a one-stop shop in capacity building for Green Finance for the financial industry, especially banks, in the coming months. We are already in discussion with the IFC on how to leverage their expertise on this. Furthermore, I would like to mention that the CGF, together with the IFC, will coorganise the next Climate Business Forum in Hong Kong in early 2020. This Climate Business Forum is the IFC’s flagship event to discuss trends and business opportunities relating to climate change and sustainability. In addition to green finance, the Forum will also cover topics such as green city, buildings, infrastructure, transportation and energy storage etc. So I look forward to your participation and support of the future activities of the CGF. Conclusion 9.
There has been growing evidence that Green and ESG investments may not lead to a sacrifice in returns. On the contrary, some ESG investments could actually enhance long term sustainability and improve risk-adjusted returns for investors. As the manager for the Exchange Fund, the HKMA takes a long term view and sees Green and ESG investments as an important driver of value in the long term. In this connection, the guiding principle that the HKMA will adopt going forward is that priority can be given to ESG investments if the long term return is comparable to other investments on a risk-adjusted basis. More specifically, the HKMA has taken or will take the following measures to support Responsible Investment: ___ (a) we have already incorporated ESG factors in our credit risk analysis of bonds; we have required our external managers of the Hong Kong equity portfolios to comply (b) with the Principles of Responsible Ownership promulgated by the Securities and Futures Commission in 2016; we have invested two tranches of $ billion each in the Managed Co-lending Portfolio (c) Programme (MCPP) run by the IFC. A substantial part of the MCPP will target sustainable investments across emerging markets; (d) we will further grow our green bond portfolio, through direct investment or investment in green bond funds; (e) we will participate in ESG-themed public equities investments through external managers in passive or active mandates targeting ESG benchmark indices; and (f) we will accord green accreditation as a predominant factor in investment in buildings in our real estate portfolio.