Retail investors in Hong Kong could mobilise US$18 billion for climate action by 2030, according to Standard Chartered

Hong Kong’s retail investors could mobilise US$18 billion in capital towards investments in climate change by 2030, according to Standard Chartered’s latest sustainable banking report released on Monday.

The report, commissioned by Standard Chartered and prepared by PwC Singapore, identified the potential for US$3.4 trillion in investments globally towards climate mitigation and adaptation by the end of the decade, based on a survey of 1,800 respondents in 10 markets across Asia, Africa and the Middle East. This included investors in mainland China, Hong Kong, Taiwan, South Korea, Singapore, Malaysia, India and the United Arab Emirates.

In Hong Kong, the survey showed that 91 per cent of investors are interested in climate investing, and 81 per cent of them wanted to increase capital flows towards climate, according to the report.

“As an international financial centre, Hong Kong can connect capital flows to develop innovative wealth management solutions, addressing the interest from investors in climate investing,” said Alson Ho, head of wealth management at Standard Chartered Hong Kong in a statement accompanying the report.

“With the enormous green finance opportunities presented by the Greater Bay Area, we would further enrich the related thematic products to match both local and cross-boundary clients’ investment interest, further strengthening Hong Kong’s position as a green financial hub in Asia.”

Within climate investing in Hong Kong, US$11 billion could flow into mitigation themes by 2030, with investments into the circular economy at US$2 billion, sustainable forestry at US$1.9 billion and renewables at US$1.8 billion forecast to attract the most capital.

Hong Kong sees room to establish hub for catastrophe bonds amid climate crisis

Meanwhile, US$7 billion could be mobilised towards climate adaptation themes, including food systems, resilient infrastructure, biodiversity and blue economy.

The potential for retail capital mobilisation was the highest in mainland China at US$2.3 trillion, followed by India at US$543 billion and South Korea at US$180 billion, according to the report. In mainland China, the investments into renewables generated the most interest, while energy efficiency received the most attention from investors in India.

However, there is a critical disconnect between interest and action, with almost all investors saying they are interested in climate investing, but only around 20 per cent willing to allocate significant funds into it, said Marc Van de Walle, global head of wealth management at Standard Chartered in the report.

Multiple barriers including comparability and accessibility, are holding investors back from translating their interest into investment moves, according to the report.

In Hong Kong, investors with between US$100,000 and US$5 million in financial liquid assets, as well as next generation high-net-worth investors with over US$5 million in financial liquid assets between 25 and 42 years old, want their investment decisions to reflect their personal values, while generating returns and creating positive impact.

Meanwhile, for high-net-worth investors aged 42 years and above, who had more than US$5 million in financial liquid assets, alignment with personal values is the top motivation for climate investing, followed by reducing portfolio risks and improved returns.