Hong Kong Monetary Authority (HKMA) has published Phase 2A of the Hong Kong Taxonomy for Sustainable Finance, significantly expanding the city’s framework for classifying sustainable economic activities. While the original taxonomy (Phase 1) focused primarily on “green” activities, the updated Phase 2A now includes climate transition categories that recognise activities and measures helping high-emitting sectors decarbonise on a time-bound pathway toward net-zero emissions, rather than only classifying fully sustainable operations. It also adds a new environmental objective on climate change adaptation to address the rising need for investments that build resilience against physical climate risks and extreme weather impacts. The taxonomy’s scope has been broadened from four to six sectors and the number of defined economic activities has more than doubled from 12 to 25, including sectors such as manufacturing and information & communications technology.

Under the updated framework, activities are now grouped into Green, Transition, and Exclusion categories – with transition criteria including interim decarbonisation targets and sunset dates for progression toward full alignment with climate goals. The climate adaptation category initially covers adaptation measures that strengthen broader activities’ resilience and may evolve as understanding and local criteria improve.