Hong Kong’s ambition to become a hub for green and sustainable business is under threat as the territory persists with stringent COVID-19 border controls, making it tougher for financial institutions to attract sector specialists.
Bankers and advisers said that the risks of Beijing’s “zero COVID” policy, which has led to a broader talent crunch in the territory, are growing as most other countries significantly ease restrictions introduced to fight the COVID-19 pandemic.
Flight bans, lengthy and costly quarantine requirements, limited access to public services and the threat of families being separated should a family member test positive for the virus have all spooked potential talent.
Photo: Vincent Yu, AP
“It is getting harder and harder to find staff in Hong Kong,” said Tony Wong (?有杰), founder of ESG specialist Alaya Consulting Ltd (本識顧問), a strategy and reporting firm.
“The territory is trying to be a green investment hub globally, but we cannot get the staff. COVID-19 and the restrictions have made it harder to attract staff,” Wong said.
Hong Kong had stepped up efforts to become a leader in environmental and social governance (ESG), including the creation of working groups with government officials and global firms to develop a local talent pool.
Hong Kong Monetary Authority Deputy Chief Executive Edmond Lau (劉應彬) in October last year named bolstering the territory’s position as a regional green and sustainable finance hub as a priority.
ESG funds have grown increasingly popular as the global transition to a low-carbon economy gains pace and institutional investors increasingly find themselves graded on the sustainability of their holdings.
ESG investment exceeds US$35.3 trillion, a report from the Global Sustainable Investment Alliance said.
Ongoing tough COVID-19 restrictions are putting Hong Kong’s ambitions to the test, with the existing foreign talent pool shrinking.
Adding to the bad news, the territory this week delayed the launch of its inaugural retail green bond worth HK$6 billion (US$768 million) due to the rapid spread of COVID-19 cases.
The surge in new infections has spurred the territory to impose some of the toughest restrictions in the world, despite growing skepticism from some business leaders, medical experts and diplomats about the viability of a “zero COVID” policy.
Flight bans on arrivals from nine countries, including Australia, the UK and the US, are in place until April 20.
Among other measures under the “zero COVID” policy, entertainment venues are closed, compulsory testing can be imposed on entire buildings and close contacts of cases are sent to quarantine camps.
In some cases, parents were separated from their hospitalized young children.
“The demand for ESG talent is massive, but one would look at Hong Kong thinking they can’t travel and meet their family,” a senior sustainability executive at a global asset manager said on condition of anonymity.
The stringent COVID-19 restrictions come on the heels of political spats, including worsening China-US ties, which saw an earlier exodus of expats more broadly from Hong Kong.
The ESG depletion is also being exacerbated by an easing of restrictions in Singapore, a rival regional finance and ESG hub.
Traditionally seen as risk averse, Singapore is opting for a more balanced approach to living with COVID-19, aiming to protect people in the city-state, while reopening its economy and borders.
The city-state’s central bank set up a US$2 billion green investments program in 2019 and has encouraged asset managers to beef up local ESG teams.
A senior executive at a global asset manager said that the Monetary Authority of Singapore was incentivizing firms to boost headcounts and preferred senior management to be based in Singapore.
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