##3 investment and green banking offers opportunities for financial institutions to develop their business, including cross - border business. 22. many jurisdictions in this part of the world have in place roadmaps for promoting green and sustainable finance. however, the level of adoption of green finance varies, and adoption is not without challenges. 23. among the challenges we currently face is the difference in taxonomies that define green economic activities for the purpose of esg investment. these taxonomies help mobilise capital by reducing the need for financial institutions to conduct their own assessments of environmental impact. at present the two leading taxonomies are those recently developed by the mainland and by the european union. the two taxonomies differ in some important aspects, including definitions of economic activities eligible for green investment. such differences could present impediments in tackling what is a global challenge : this has particular relevance for hong kong, which is a regional hub for global institutions committed to responsible investment. 24. it is therefore gratifying to know that in may this year, the mainland authorities have taken important steps to reconcile some of the critical differences between the two taxonomies. for example, clean coal is no longer considered green in the revised bond catalogue. we 3 / 5 bis central bankers'speeches expect more harmonisation work to be done by the two sides, though this may take a bit of time. 25. we are making progress on “ harmonisation ” within hong kong, too. this year, the hkma, together with other financial regulators and relevant government bureaux, formed the green and sustainable finance cross - agency steering group. the steering group has two main aims : to co - ordinate management of climate and environmental risks to the financial sector ; and to help accelerate the growth of green and sustainable finance in hong kong. one of the first tasks of the steering group is to develop a local green taxonomy that would incorporate the harmonisation work currently being done by the mainland and eu authorities and take into account local circumstances. the aim is simple : there should only be one local taxonomy for use by all financial regulators in hong kong. 26. at the global level, the hkma is an active member of international and regional networks devoted to addressing climate risk. through our participation in these networks we are able to contribute to international efforts and to draw on some of the best expertise in these fields. we will do our best to align practices in hong kong with international developments. 27. when considering international experience

climate - related financial disclosures by 2025. 39. we are also pioneers with our dedicated government green bond programme. last month, we returned to the international market with a 2. 5 billion us dollar deal, attracting an overwhelmingly positive response from global investors. to build on this momentum, the financial secretary just announced in his latest budget that the government will double the size of the green bond programme and increase the diversity of future issuances. we will also provide grants to encourage more corporates to seek green and sustainable financing in hong kong. both initiatives will help strengthen the fast developing green finance ecosystem in hong kong. 40. we are also partnering with the international community to develop green financing. hong kong is the founding member and first regional anchor for the asia chapter of the alliance for green commercial banks with the international finance corporation. 41. our financial centre is also embracing the rise of investment in line with environmental, social and governance – or esg – principles. as the manager of the exchange fund, the hkma has ensured that esg principles are now an integral part of our investment criteria, investment process and asset allocation decisions. 42. and, once again, hong kong ’ s status as china ’ s offshore financial centre gives us an edge in sustainable finance. no financial centre is better positioned than hong kong to channel global investment into china ’ s ambitious plans to achieve carbon neutrality by 2060. opportunity – technology 43. when it comes to technology, hong kong is already at the forefront of the global fintech scene. the hkma ’ s smart banking initiatives have helped drive the digital transformation of banking services, bringing competition and promoting financial inclusion that directly benefit 4 / 5 bis central bankers'speeches customers. this is just the start of a long journey. the adoption of ai and data analytics in banking operations, the use of regulatory technology – or regtech – in compliance and the need for enhanced cybersecurity are high on our agenda. 44. looking ahead, apart from the technology itself, it ’ s clear that data will be central to the future of banking innovation. that ’ s why we ’ re building next - generation financial infrastructure. last november, we announced plans for a pilot to build a commercial data interchange. the project will enable corporates to share with banks their digital footprint kept by their business partners on a common platform. this data access will provide new ingredients for innovative banks to create new products or processes which will allow thousands of small and medium - sized enterprises to access