Retail Green Bonds: Investing for a Greener World

Green finance
ESG
Sustainability
Investment

Author: Mr Chin20/04/2022

Winter becomes warmer to the point that I rarely need to put on a sweater or down jacket. This, for me is one of the many ways in which the impact of global warming is felt.

To protect the environment, we can start with everyday habits. With money management being a part of our daily lives, it is worth rethinking how we can deploy our assets to bring positive impact for the environment and our planet. The government’s retail green bond presents an opportunity to participate in green and sustainable finance.

In light of the rising climate change challenge, green and sustainable finance has gained much traction as investors are starting to invest in low-carbon and sustainable businesses and projects that benefit the environment. The Government Green Bond Programme, including the inaugural retail green bond, will help finance green projects designated by the government, in line with the philosophy of green and sustainable finance.

Retail Green Bonds

Retail investors like me can subscribe to government retail green bond knowing that every dollar is spent on green projects to benefit the environment, while contributing to Hong Kong’s sustainable development, turning the city into a greener place.

Preserving the environment and investment are not mutually exclusive. Meaning, responsible investment does not need to compromise on the return. As a bond investment, the government’s retail green bond has a tenor of three years. The bond pays interest once every six months at a rate linked to Hong Kong’s inflation rate (floating rate) with a guaranteed interest rate of 2.5% (fixed rate). The bond is listed and traded on the Hong Kong Stock Exchange.

No longer a niche market, green and sustainable finance now sees a growing range of financial products being offered to retail investors. Prospective investors can browse the list of environmental, social and governance (ESG) funds authorised by the Securities and Futures Commission (SFC) on its website.