HKIB ECF-GSF Professional flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

HKMA GSF Grant Scheme

A Hong Kong subsidy scheme that reimburses eligible green bond issuers and green loan borrowers for external review costs and arranging fees, promoting green and sustainable finance in Hong Kong.

IFRS S2

The international sustainability disclosure standard on climate-related disclosures, issued by the ISSB; requires disclosure of Scope 1, 2, and 3 GHG emissions and climate risks, adopted in Hong Kong as HKFRS S2.

HKFRS S2

The Hong Kong equivalent of IFRS S2, mandating climate-related disclosures for HKEX-listed issuers from 1 January 2025, including governance, strategy, risk management, and metrics.

Common Ground Taxonomy

A classification of green economic activities developed by the EU and China under the IPSF, mapping common green categories to facilitate cross-border green finance and reduce greenwashing.

HKEX Core Climate

A voluntary carbon marketplace launched by HKEX in October 2022, facilitating trading and clearing of carbon credits and instruments in Hong Kong, China, and Asia.

SFC FMCC climate amendments

Amendments to the Fund Manager Code of Conduct effective August 2022, requiring Hong Kong asset managers to consider climate-related risks in investment and risk management processes.

HKMA SPM GS-1

A Supervisory Policy Manual module issued in 2021 that sets the HKMA's supervisory expectations for authorized institutions to manage climate risk across governance, strategy, risk management, and disclosure.

Green Bond Principles

Voluntary guidelines by ICMA for issuing green bonds, covering use of proceeds, project evaluation, management of proceeds, and reporting; widely adopted in Hong Kong's green bond framework.

Sustainability-linked loan

A loan whose terms (e.g., interest rate) are tied to the borrower's achievement of predetermined sustainability performance targets (SPTs), often verified by an external reviewer.

Transition finance

Financing that supports high-emitting sectors in reducing emissions aligned with the Paris Agreement, using instruments like transition bonds or sustainability-linked loans with credible decarbonisation pathways.

Scope 1 emissions

Direct greenhouse gas emissions from sources owned or controlled by an entity, such as fuel combustion in company vehicles or on-site manufacturing processes.

Scope 2 emissions

Indirect greenhouse gas emissions from the consumption of purchased electricity, heat, or steam by an entity, reported under GHG Protocol standards.

Scope 3 emissions

All indirect greenhouse gas emissions in an entity's value chain, including upstream suppliers and downstream product use, often the largest category and hardest to measure.

Greenwashing

The practice of making misleading or unsubstantiated claims about the environmental benefits of a financial product or business activity, undermining market integrity and investor trust.

Paris Agreement

A 2015 international treaty under the UNFCCC committing signatories to limit global warming to well below 2°C, preferably 1.5°C, above pre-industrial levels.

Net zero

A state where the amount of greenhouse gases emitted into the atmosphere is balanced by the amount removed, achieved through emission reductions and carbon removals.

TCFD recommendations

A framework by the Task Force on Climate-related Financial Disclosures (now ISSB) covering governance, strategy, risk management, and metrics/targets for climate-related financial disclosures.

Climate stress test

A scenario-based exercise assessing the resilience of financial institutions or portfolios to climate-related physical and transition risks under various warming pathways.

Physical risk

The risk of financial loss or operational disruption from climate-related extreme weather events (e.g., floods, typhoons) or long-term shifts (e.g., sea-level rise).

Transition risk

The risk of financial loss arising from the shift to a low-carbon economy, including policy changes, technological advances, and shifts in market sentiment.

ESG integration

The practice of incorporating environmental, social, and governance factors into investment analysis and decision-making to enhance risk-adjusted returns.

Green bond

A fixed-income instrument whose proceeds are exclusively applied to finance or refinance eligible green projects, such as renewable energy or green buildings, with reporting obligations.

Sustainability bond

A bond whose proceeds fund a combination of green and social projects, addressing both environmental and social objectives, aligned with ICMA principles.

Social bond

A bond raising funds for projects with positive social outcomes, such as affordable housing or healthcare, often targeting underserved populations.

Sustainability-linked bond

A bond whose financial characteristics (e.g., coupon) are tied to the issuer's achievement of sustainability performance targets, with penalties if targets are missed.

ICMA

The International Capital Market Association, which publishes the Green Bond Principles, Social Bond Principles, and Sustainability-Linked Bond Principles, widely used voluntary standards.

Climate Bonds Standard

A certification scheme by the Climate Bonds Initiative that verifies bonds are aligned with the Paris Agreement goals, requiring third-party verification.

GHG Protocol

The most widely used international accounting standard for measuring and managing greenhouse gas emissions, categorizing them into Scope 1, 2, and 3.

Carbon credit

A tradable permit representing one tonne of carbon dioxide equivalent (tCO2e) reduced, avoided, or removed from the atmosphere, used in voluntary or compliance carbon markets.

Carbon offset

A reduction in emissions or removal of carbon made to compensate for emissions elsewhere, often purchased as carbon credits, though quality and additionality vary.

HKMA Cross-Agency Steering Group

A Hong Kong government body established in May 2020 to coordinate green and sustainable finance policy across financial regulators and government bureaux.

SFC ESG fund circular

A 2024 SFC circular setting disclosure expectations for retail ESG funds in Hong Kong, covering naming, investment focus, and ESG metrics to combat greenwashing.