HKMA Finalizes Sustainable Finance Taxonomy Phase 2A After Public Consultation

Hong Kong's central bank has finalized its expanded framework for classifying green investments, a move designed to channel more capital toward the city's low-carbon transition and strengthen its position as Asia's sustainable finance hub.

The Hong Kong Monetary Authority published the Taxonomy for Sustainable Finance Phase 2A on January 22, 2026, following a public consultation that began in September 2025. The framework provides banks, asset managers, and corporates with standardized criteria for determining which economic activities qualify as environmentally sustainable.

What Phase 2A Changes

The updated taxonomy expands beyond Phase 1, which launched in May 2024, by adding two significant elements: transition activities and a climate change adaptation category. This means financial institutions can now classify investments that help high-emitting industries shift toward greener operations—not just projects that are already fully sustainable.

The HKMA received feedback from banks, professional associations, asset managers, corporates, NGOs, and public sector entities during the consultation period. According to the regulator, respondents broadly supported the expanded coverage and praised improvements to the framework's clarity and practical application.

Why This Matters for Markets

A standardized taxonomy reduces greenwashing risk and gives institutional investors clearer guidelines for ESG-compliant allocations. For Hong Kong, the framework positions the city to compete with the EU's established taxonomy and Singapore's developing classification system for sustainable finance flows across Asia.

Green and sustainability-linked bond issuance has grown substantially in the region, and having regulatory clarity should reduce compliance friction for issuers choosing Hong Kong as their listing venue.

Ongoing Development

The HKMA describes the taxonomy as a "living document," with development of subsequent phases already underway. Future updates will incorporate government policy shifts, technological advancements, and evolving industry priorities.

The full Phase 2A document and consultation report are available on the HKMA website. Financial institutions operating in Hong Kong should review the updated criteria to assess how their sustainable finance products align with the new classifications.