【ESG News】Global Trends Biweekly Newsletter Issue 61 (2026.6.8-2026.6.21)

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Hong Kong ESG trends

HKSFPA Submits Views on the Public Consultation for Hong Kong’s Five-Year Plan

On June 15, Gordon Chan, Chairman of the Hong Kong Securities and Futures Professionals Association (HKSFPA), submitted recommendations regarding the consultation document for Hong Kong's 15th Five-Year Plan. Particularly, in terms of supporting financing for small and medium-sized enterprises (SMEs), Chan suggested optimizing the GEM board by establishing differentiated listing standards and a green tech growth board. Concurrently, he recommended that Hong Kong mandate corporate compliance with climate-related financial disclosure frameworks, establish a green infrastructure fund, issue tokenized green bonds, and jointly develop a unified carbon market with the Greater Bay Area.

Source: https://www.hksfpa.org/tc/detail-page/id/589  

Lianhe Green Insights

This submission from the HKSFPA reflects the industry's deep considerations on balancing micro-level revitalization with macro-level transformation as Hong Kong advances toward the 15th Five-Year Plan period. At the SME and consumer levels, a two-pronged approach utilizing differentiated listing standards and government-backed debt instruments precisely mitigates short-term cash flow pain points. Combined with the strategic deployment of e-HKD applications and a unified Greater Bay Area carbon market, these initiatives aim to activate local microeconomic vitality through the dual engines of digital and green finance, while solidifying Hong Kong's position as a sustainable finance hub within global capital markets.

 

International ESG trends

Bank of England Integrates Net Zero Transition Risks into Collateral Framework

On June 11, the Bank of England (BoE) published a new market notice outlining changes to its collateral eligibility framework. In a first, the Bank has integrated climate transition-related risk factors into its valuation methodology for corporate bonds pledged by banks.

In its new market notice, the BoE stated it is revising its haircut calculation methodology for corporate bonds, noting that "issuers may face potential financial risks associated with the economic transition to net zero." To reflect this transition risk, the central bank indicated it will begin applying "haircut add-ons" to corporate bonds from issuers in relevant sectors, with the changes officially taking effect at the end of October 2026. Additionally, the BoE explicitly stated in the notice that bonds issued by companies deriving revenue from thermal coal mining will no longer be eligible as collateral.

Source: https://www.bankofengland.co.uk/markets/market-notices/2026/june/collateral-eligibility-in-the-smf-11-june-2026

Lianhe Green Insights

The BoE's adjustment of its collateral eligibility criteria is a substantive step by a central bank using macroprudential tools to address climate risks. From a risk management perspective, introducing haircut add-ons for high-carbon sector bonds and excluding thermal coal assets directly mitigates the asset depreciation risks faced by the central bank itself. From a market guidance perspective, changes to the collateral framework will alter the asset preferences of commercial banks. To ensure smooth access to liquidity support from the central bank, commercial banks will incline toward reducing their holdings or allocation of bonds with high transition risks, thereby pushing up financing costs for the relevant enterprises. This policy demonstrates that green transition progress has become a substantive financial variable affecting the liquidity and financing efficiency of corporate bonds, and more central banks across various economies are expected to follow this regulatory trend in the future.

 

PSE joins CDP as the first stock exchange capital markets signatory

On June 11, The Philippine Stock Exchange, Inc. (PSE) announced that it became the first stock exchange to join the Carbon Disclosure Project (CDP) as a Capital Markets Signatory. This move fortifies the Exchange’s commitment to advancing sustainable finance and corporate transparency.

CDP can be a useful tool for listed corporates to identify how they can improve their systems, policies, and governance to be more sustainable. CDP’s disclosure platform integrates best practice reporting standards and frameworks in one place, with IFRS S2 as its foundational baseline. Hence, companies can use CDP to identify and report climate-related financial risks and opportunities. CDP’s disclosure platform also fully incorporates the Recommendations of the Taskforce for Climate-related Financial Disclosures (TCFD) with substantial or partial alignment with the European Sustainability Reporting Standards (ESRS) and the Recommendations of the Taskforce for Nature-related Financial Disclosures (TNFD). The questionnaire covers climate change, water security, forests, plastics, and ocean impacts.

As a signatory, PSE is now one of over 540 global financial institutions, representing more than US$110 trillion in assets, collectively requesting companies around the world to disclose their environmental impacts through CDP.

Source: https://www.pse.com.ph/pse-joins-cdp-as-the-first-stock-exchange-capital-markets-signatory/

Lianhe Green Insights

PSE becoming the world's first stock exchange to join CDP as a Capital Markets Signatory signals that emerging markets are shifting from "passive regulation" to "active benchmarking" in driving ESG compliance. The core value of this move lies in breaking down the barriers between multiple mainstream international disclosure frameworks. Through the CDP platform, PSE introduces a unified system with IFRS S2 as its foundational baseline, integrating TCFD, TNFD, and ESRS. This provides listed companies with an efficient path for environmental information disclosure, effectively enhancing information disclosure efficiency and the comparability of performance among listed companies. In the long run, this strategic initiative will enhance the overall transparency of the Philippine capital market, helping to attract global institutional capital focused on green and sustainable development, and thereby strengthening the international competitiveness of local companies.

 

Mainland China ESG trends

 

Notice from NDRC and Other Departments on Launching a Three-Year Tough Action for Energy Saving and Carbon Reduction Retrofits in Key Industries

On June 15, the National Development and Reform Commission (NDRC) and multiple other departments issued a notice, announcing the recent joint issuance of the Notice on Launching a Three-Year Tough Action for Energy Saving and Carbon Reduction Retrofits in Key Industries (hereinafter referred to as the Notice). The Notice clarifies that starting from 2026, a three-year tough action for energy saving and carbon reduction retrofits will be carried out across nine high-energy-consuming and high-emission industries, including steel, electrolytic aluminum, cement, flat glass, oil refining, ethylene, synthetic ammonia, methanol, and coal-fired power.

This tough action sets clear goals with quantified indicators. The Notice proposes that by the end of 2028, the proportion of production capacity reaching current energy efficiency benchmark levels in key industrial sectors—such as steel, electrolytic aluminum, cement, flat glass, oil refining, ethylene, synthetic ammonia, and methanol—will increase by an average of 20 percentage points, while the coal-fired power industry will strive for a 15 percentage point increase. Production capacity below the energy efficiency baseline levels will be basically eliminated, cumulatively achieving energy savings of over 100 million tons of standard coal and reducing carbon dioxide emissions by over 200 million tons.

Source: https://www.ndrc.gov.cn/xxgk/zcfb/tz/202606/t20260615_1405852.html

Lianhe Green Insights

This action imposes specific energy efficiency constraints on nine traditional industries from the supply side, with its core impact lying in altering the cost structure of production factors in the industrial sector. By mandating the basic elimination of production capacity below energy efficiency baseline levels, the policy raises the compliance costs for backward capacity, thereby effectively curbing the blind expansion of high-energy-consuming sectors. Furthermore, given the close supply chain relationships between the eight industrial sectors and the coal-fired power industry, this synchronized transformation across the entire value chain helps generate collaborative energy-saving effects within the complete industrial system, solidifying the micro-level industrial foundation for China's green, low-carbon, and high-quality economic development.

 

MEE Releases the "Progress Report on the Construction of the Product Carbon Footprint Management System (2026)"

On June 17, the Ministry of Ecology and Environment (MEE) released the Progress Report on the Construction of the Product Carbon Footprint Management System (2026) (hereinafter referred to as the Report), comprehensively presenting China's latest institutional achievements in product carbon footprint standard formulation, key factor quantification, and foundational database construction.

According to the Report, in terms of standard system construction, as of the end of 2025, China had released 15 national standards for product carbon footprint accounting, including those for electrolytic aluminum, chemical fibers, and electronic appliances. Concurrently, focusing on key industrial products such as lithium-ion batteries, three batches of recommended lists for group standards on carbon footprint accounting rules had been issued, with a cumulative adoption of 111 group standards.

Regarding core baseline data, the MEE, the National Bureau of Statistics, and the National Energy Administration jointly released the 2024 electricity carbon footprint factor data in October 2025. Building upon the 2023 quantification initiative, this work further expanded the case sample size and significantly raised the proportion of measured data. Data shows that the national average electricity carbon footprint factor for 2024 stood at 0.5777 kg CO₂e/kWh, representing a year-on-year decrease of 6.9% compared to the 2023 figure (0.6205 kg CO₂e/kWh), which objectively reflects the tangible results of China's power source structure optimization and technological innovative development.

In terms of underlying database support, the second version of the National Greenhouse Gas Emission Factor Database went online in March 2026. This version achieved a substantial expansion upon the first edition, adding and updating a total of 291 greenhouse gas emission factors, which brought the total number of factors to 576. By incorporating carbon emission intensity data for key raw materials and products—such as crude steel and unwrought aluminum—the database has further enhanced its factor coverage and representativeness.

Source: https://www.mee.gov.cn/ywgz/ydqhbh/wsqtkz/202606/W020260617335466326025.pdf

Lianhe Green Insights

The systematic progress disclosed in this report indicates that China is accelerating the establishment of an independent, controllable product carbon footprint accounting foundation capable of international alignment. The dual-track advancement of national and group standards addresses the industrial regulatory gaps in quantification rules for key products. More centrally, the continuous decline of the electricity carbon footprint factor combined with the expansion of localized emission factors for energy-intensive raw materials can more accurately reflect the actual low-carbon attributes of Chinese manufacturing. This not only provides precise data support for domestic enterprises to conduct product life-cycle carbon footprint modeling, but will also serve as a critical institutional infrastructure to counter international green trade barriers and establish local discourse power in product carbon quantification.