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Sustainable finance: ‘greenwashing’ concerns raised as Hong Kong airport floats US$4 billion bonds package to fund growth, decarbonisation

  • Paris-based climate campaigner Reclaim Finance calls on investors not to participate in issuance to avoid ‘greenwashing and reputational risks’
  • AA earmarks proceeds from the green tranche for funding decarbonisation and climate-change adaptation projects

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The third runway at Hong Kong International Airport. The environmental benefits from projects funded by the AA’s green bond will be “more than offset” by greater carbon emissions from more flights and the biodiversity risk from a new runway, Reclaim Finance says. Photo: Winson Wong
Eric Ng
Concerns about “greenwashing” have been raised by a climate campaign group after Airport Authority Hong Kong (AA), which operates the city’s international airport, raised US$4 billion by issuing a package of bonds that includes a US$1 billion five-year green bond.

Paris-based climate campaigner Reclaim Finance said the project itself raised “serious climate and biodiversity-related risks” and called on investors not to participate to avoid “greenwashing and reputational risks”.

Greenwashing refers to sustainability benefit claims without clear, agreed definitions on sustainable investment, which could sometimes lead to a false impression of the overall environmental benefits.

“The issuance of a green bond for such a devastating project might have been cleared for take-off, but the biodiversity and climate risks associated with the project speak for themselves,” Lucie Pinson, Reclaim Finance’s director, said in a statement this week. “Sincere investors should stay clear of this bond, if their climate commitments mean anything at all.”

The airport operator declined to comment when approached by the Post.

A Cathay Pacific cargo plane takes off from the Hong Kong International Airport in this file photo from June 2020. Photo: Sam Tsang
A Cathay Pacific cargo plane takes off from the Hong Kong International Airport in this file photo from June 2020. Photo: Sam Tsang
The AA on Tuesday completed the sale of the package, which also includes a US$1.2 billion 10-year bond, a US$1.2 billion 30-year bond and a US$600 million 40-year bond, according to a terms sheet. Coupon interests range from 1.75 per cent of the five-year bond to 3.5 per cent of the 40-year one. Proceeds from the green tranche have been earmarked for funding decarbonisation and climate-change adaptation projects.

The airport operator’s green bond has received a preissuance stage certification from the Hong Kong Quality Assurance Agency, which verified the issuer’s adherence to international and national standards on green and sustainable finance.

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