Technical assessment framework to avoid greenwashing
Incorporate international standards, e.g. ICMA, TCFD and ISO, etc.
Adoption of Fintech, e.g. big data analysis, automation and digitalisation, etc.
The management structure of the Scheme is illustrated in the infographic below:
- Renewable Energy
- Energy Efficiency
- Pollution Prevention & Control
- Natural Resources & Land Use
- Biodiversity Conservation
- Clean Transportation
- Water Management
- Climate Change Adaptation
- Circular Economy
- Green Buildings
- Early Bird First 20 companies $16,000 $76,000 Pre-lending assessment & certification Post-lending verification (1 time)
- Discount Fee $48,000 $76,000 Pre-lending assessment & certification Post-lending verification (1 time)
- Discount Fee $16,000 44,000 Pre-lending assessment & certification
- The fee will be reviewed in a regular basis subject to CIC subsidies, market trend and manpower cost.
- Each company can apply for the early bird package once for each financial product stated in the scheme, i.e.an applicant is entitied for four quotas of early bird discount at most.
- Only one-time post-lending verification will be included, which will verify no more than five project categories and provide a limited level of assurance on the reliability of the submissions.
What is the objective of the SFCS?
To support the HKSAR Government in positioning Hong Kong as a leading sustainable finance hub in Asia and help achieve carbon neutrality before 2050, the CIC is developing the Sustainable Finance Certification Scheme (SFCS), which provides a common framework and assessment system for entities implementing sustainable construction practices. It also serves as a tool to facilitate sustainable finance for the construction industry. The SFCS strives to bridge the gap between the financial and construction industries to drive solid sustainability results and decarbonise across the full spectrum of the construction industry supply chain.
What are the benefits of participating in the SFCS?
Potential benefits for the applicant include:
• Increasing green capital for your company by acquiring financial incentives (e.g. lower interest rates) provided by financial regulators/institutions and technical support from the CIC;
• Enhancing your stakeholders’ trust via independent third-party conformity assessments;
• Expanding market exposure and business opportunities for sustainable finance investors in Hong Kong and the Greater Bay Area; and,
• Building capability and credibility for your company, business partners and value chain to improve your competitiveness and reputation in the industry.
What kind of sustainable financial instruments are covered by the SFCS?
The SFCS currently includes:
Project level: green loans, green guarantees.
Company level: sustainability-linked loans, sustainability-linked guarantees
What are the standards and guidelines adopted by the SFCS?
The SFCS has been developed with reference to:
• International principles, e.g. Green Loan Principles (GLP), Sustainability-linked Loan Principles (SLLP), recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), etc.
• Local standards, e.g. the HKSAR Government’s technical circular, CIC tools related to carbon neutrality, etc.
Please refer to the User Guide for details.
This is the first sustainable finance certification scheme for the construction industry in Hong Kong. Why is it so important today?
As one of Asia’s leading financial hubs, Hong Kong is beginning to redirect its focus towards a more sustainable future for its financial institutes and investors. Many local governmental bodies have begun to take action, starting with HKEx, HKMA and SFC, and financial regulators in the Greater Bay Area (GBA) have introduced financial incentives which will benefit local applicants who conduct business in the region as well. As this is the first sustainable finance scheme conducted in Hong Kong, the contribution of participants will significantly influence the sustainable development of this industry and set the standard for industries in the GBA.
What local and international recognition does the SFCS receive?
The CIC is an recognised external review body for the HKMA Green and Sustainable Finance Grant Scheme (GSF Grant Scheme). CIC has received strong support from construction and financial stakeholders, with over 80 supporting organisations and 18 pilot applications as of November 2021.
How is the integrity of the SFCS ensured?
The SFCS is being developed with reference to international standards, such as ISO and best market practices. The CIC has also established an audit mechanism in consultation with ICAC, financial regulators and international certification bodies in order to ensure that operation and management of scheme is conducted with the highest integrity.
Which language should prevail in the Scheme documents?
The Scheme documents are provided in the English and Traditional Chinese versions. If there is any inconsistency or ambiguity between these two versions, the English version shall prevail.
- What is the objective of the SFCS?
Who are the target applicants?
The SFCS welcomes players in the construction industry, such as:
• Project owners, including the HKSAR Government, statutory bodies and developers;
• Sub-contractors; and
Who will assess the application at the pre-lending stage and the impact report at the post-lending stage?
Assessment will be carried out by assessors of the SFCS and approved by CIC.
What is the criteria to be considered eligible to apply for the SFCS?
The applicant should:
• Be a construction stakeholder with a valid HK Business Registration (BR)
• Meet our mandatory technical requirements
• Not intend to apply for the purpose of ‘greenwashing’ and other illegitimate purposes
Please refer to the User Guide for details.
How long does the application process take?
Under normal circumstances, the pre-lending or post-lending stages of the application and certification processes will each be completed within 10 working days.
Is applicant required to submit supplementary documents after the application submission?
Scheme Operator will conduct a completeness review before assessment. The applicant is required to provide all necessary information, documents and evidence as requested by CIC and/or the Scheme Operator. If the applicant for whatever reason fails and/or refuses to provide all necessary information, documents and evidence in order to enable CIC and/or the Scheme Operator to assess the application within 1 month from the date of request, the application shall be deemed to be rejected and all fees (including but not limited to the application fees) paid by the applicant to CIC and/or the Scheme Operator will be forfeited by CIC and no refund or transfer will be made to the applicant in any event. If the applicant still wishes to continue its application, the applicant is required to resubmit the application.
When should the applicants submit the pre-lending application and post-lending impact report?
It is recommended that applicants submit a pre-lending application prior to seeking sustainable financing with the bank. Once the loan has been approved, a post-lending impact report must be submitted at least once a year until financing has been completed.
How should I submit the application?
The application and payment should be submitted online at the SFCS’s website. www.sfcs.cic.hk
Is the SFCS equivalent to international and local green building certificates, e.g. BEAM Plus, LEED, etc.?
The SFCS is designed to allow applicants to demonstrate to financial institutions and investors efforts to comply with international sustainable finance principles, rather than green building performance in general, including:
• Use of proceeds
• Project evaluation and selection processes
• Management of proceeds
• Impact reports (focused primarily on carbon emissions)
However, the CIC does not include any financial information assessment or credit risk assessment during the process.
Is there any limit on the amount of funds that can be applied for through the SFCS?
There is no limit on the funding amount.
How is Fintech applied to help the SFCS achieve better efficiency?
The CIC strives to adopt Fintech in order to simplify the assessment process and reduce the cost to applicants. An e-platform has been established to promptly assist applicants in preparing a sustainable financing framework and receiving a certificate. To shorten the processing time, only digital payment is allowed. In the post-lending stage, the e-platform can allow users to prepare climate-related impact reports and benchmark carbon performance using big data analysis.
Besides the application form, what additional information should be submitted at the pre-lending stage?
It depends on the type of financial instruments being requested. Please refer to the technical requirements for further details.
Does the SFCS accept applications from the Greater Bay Area (GBA) or overseas projects?
The SFCS accepts the use of proceeds for projects in the GBA and overseas, but applicants must raise green capital in Hong Kong.
- Who are the target applicants?
What is the validity period of the certificate?
The certificate is valid for two years.
Can the subsidy provided by the HKMA Green and Sustainable Finance (GSF) Grant Scheme be applied to cover the application fee?
The SFCS will provide an email notification when the application fee is settled to assist you in your claim under the GSF Grant Scheme. However, please check to be sure that your transaction meets the eligibility requirements. For details, please refer to: https://www.hkma.gov.hk/media/chi/doc/key-information/press-release/2021/20210504c4a1.pdf
Will the application information, related project information, and the post-lending impact report be publicly available after a successful application?
The name of the applicant, the corresponding certification and the status of the impact report submission will be posted on the official website of the Scheme. However, the corresponding assessment and verification report will only be publicly available with the applicant’s approval.
- What is the validity period of the certificate?