Chan outlines three measures to fund SME transition in Asia
Hong Kong Monetary Authority Deputy Chief Executive Darryl Chan called for tailored sustainable finance to support small and medium-sized enterprises across Asia. Speaking at the CASI Sustainability Forum, Chan detailed measures including taxonomy expansion and issuance subsidies.
Taxonomy expansion and debt subsidies
Hong Kong arranged around 40 percent of Asia's international green and sustainable bonds in 2025, according to Hong Kong Monetary Authority (HKMA) Deputy Chief Executive Darryl Chan.
To widen market access, the HKMA launched a public consultation on Phase 2B of the Hong Kong Taxonomy, expanding coverage to transition activities in hard-to-abate sectors like iron and steel as well as battery storage and sustainable fuels.
Additionally, the HKMA expanded its debt grant scheme to subsidize advisory costs for sustainable frameworks and transition plans.
Regulators also deployed a free greenhouse gas calculator using utility bills, adding emission factors from Southeast Asian economies.
The vulnerable backbone of Asia
Small and medium enterprises account for nearly 40 percent of Asian economic output and roughly two-thirds of regional employment, yet remain disproportionately exposed to physical and transition climate risks.
Chan pointed out that existing transition planning tools focus almost exclusively on large listed corporations.
Smaller firms face higher capital costs, limited financing access, patchy data, and technical hurdles, making tailored regional frameworks necessary.
Toolkits cannot replace capital
Lowering advisory costs and offering free emissions calculators removes basic reporting hurdles for smaller firms.
Yet subsidized planning alone cannot offset the structural risk premiums banks charge unrated borrowers.
Real transition momentum requires risk-sharing facilities alongside reporting tools.