Many companies are setting net-zero goals and emissions reduction targets. But clear guidance on how to achieve them is often hard to find.
The Green and Sustainable Finance Cross-Agency Steering Group addresses this through the transition finance operational guide HK. For the very first time, it introduces a sector-specific transition finance guide. It’s now developed with the pilot focus on Information and Communication Technology (ICT) companies. It explains the transition-related information that financial institutions should consider when evaluating them.
For businesses in the ICT sector, the Steering Group’s playbook can be a useful reference point. It shows what financial institutions check beyond climate commitments, including targets, progress, and supporting data. This article explains more about the report, what it covers, and how it applies to ICT companies.
What Does Hong Kong’s New Transition Finance Guide Mean for ICT Companies?
Securing transition finance often means showing financial institutions that a business’s transition plans are credible. The Transition Finance Operational Reference Guide – Phase 1 Report explains that in detail. It tells banks and investors what to look for when making funding decisions.
Ms. Julia Leung, the Steering Group’s co-chair and SFC’s CEO, says: “This reference guide reflects the Cross-Agency Steering Group’s commitment to work with the industry to distill high‑level international principles and standards into actionable, objective and accessible guidance. This is one of the first efforts to ground transition finance in sector‑specific and real-world context to facilitate better disclosures, foster efficient capital allocation, and align stakeholders’ expectations.”
Instead of introducing new disclosure requirements, the guide brings together existing international transition finance principles. It also explains the rules’ practical applications through metrics and targets.
Why does the guide start with ICT companies?
The Working Group considers the ICT sector as the pilot for 3 reasons:
Technology is now part of almost every business. Across industries, organizations depend on software and digital services to run their operations. Because of this, ICT companies’ decisions can affect far more than just their own sector.
These companies also face pressure to reduce their emissions. This is because cloud services, AI tools, and data centres require substantial processing power.
At the same time, investor interest in ICT companies is growing. They want to see how these companies plan to reduce emissions while continuing to scale.
What are the key areas of transition finance assessment?
The Working Group reviewed multiple international transition finance frameworks. After that, they identified 3 areas that are most relevant when deciding funding:
- Governance, accountability, and transparency: How companies govern, monitor, and disclose their transition plans
- Delivery strategy: How the company plans to achieve its transition objectives.
- Metrics and targets: How performance indicators support measurable emissions targets.
These points convey that the guide encourages investors to look beyond the current emission profile. The focus is on how ICT companies plan to reduce emissions in the long term.
Startupr insights: From our experience with clients in the startup sector, sustainability targets are rarely the problem. Most companies already have them. The harder part is connecting those targets to a practical plan and measurable progress. Our internal compliance specialists note that the Steering Group’s new report explicitly bridges this gap. It turns high-level global theories into clear, objective checklists.
| Phase I of the guide covers financing at the entity level. It means that financial institutions will review a company’s overall climate transition strategy. This includes financing provided for general corporate purposes rather than a specific green project. |
What does the Handbook ask Financial Institutions to Review?
Under the 3 core pillars, the guide lists specific areas that financial institutions may review.
What does the governance, accountability, and transparency cover?
The guide considers whether a company follows transition efforts through clear oversight and internal policies. This area mentions multiple qualitative pieces of information that financial institutions will check, including:
- Oversight of climate-related activities
- Energy efficiency policy.
- Actions to evaluate, maintain, and develop internal capacity
- GHG emission reduction policy.
What are the delivery strategy details to look for?
This part examines factors that indicate how businesses integrate climate considerations into their operations. The list includes:
- Internal carbon price
- Data centre development and operation
- Climate scenario analysis
- Usage of low-carbon products and services.
What metrics and targets do financial institutions count in?
This area covers the quantitative part. It mentions the data used to measure the transition finance’s progress. The core metrics are:
- Scope 1, 2, 3 GHG emission reduction targets
- Green capital expenditure ratio
- Carbon, power, and water usage effectiveness
- Waste recycled.
Funding spotlight: Implementing transition plans often requires more than setting targets. Companies may need to invest in emissions-tracking and data-collection systems to support climate reporting. To support this, the city offers funding through the Green Tech Fund opportunities HK. It supports companies in researching, developing, and utilizing green technologies. Businesses can get up to HK$30 million per project under this grant.
Wrapping Up
The ICT sector is just the starting point for this guide. The upcoming phases will include similar frameworks for other sectors as well.
Also, over time, the expectation can be more specific and detailed. This means businesses will need clearer systems to track, measure, and report their transition progress. It also means having a proper company incorporation process in place. That sets the base for how banks assess financing decisions.
Startupregistry can help with setting up the business entity and support ongoing corporate registry requirements from day one. Contact our experts to learn more.
