【ESG News】Global Trends Biweekly Newsletter Issue 60 (2026.5.25-2026.6.7)

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Hong Kong ESG trends

Ministry of Finance Issues New Tranche of RMB Sovereign Green Bonds in Hong Kong; Lianhe Green Empowers and Supports Its "Sovereign Green Bond Framework"

On May 28, the Ministry of Finance of the People’s Republic of China (“MOF”) successfully issued RMB 6 billion of sovereign green bonds in the Hong Kong Special Administrative Region. The offshore RMB green bonds issued this time have maturities of three years and five years and were enthusiastically received by the market. The total subscription amount reached RMB 62.4 billion, which is 10.4 times the issuance amount. Among them, the subscription multiplier for the three-year bond reached 9.8 times, and the subscription multiplier for the five-year bond reached 11 times. All proceeds from the bond issuance will be used for eligible green expenditures in the central government budget in accordance with the first “The People’s Republic of China Sovereign Green Bond Framework” (the “Framework”) released by MOF in February 2025.

Lianhe Green Development Company Limited (“Lianhe Green”), an external reviewer recognised by the Hong Kong Monetary Authority’s Green and Sustainable Finance Grant Scheme, has provided its Second-Party Opinion on the Framework and given the Framework an assessment opinion of “Excellent”.

Source: https://www.info.gov.hk/gia/general/202605/29/P2026052900491.htm

Lianhe Green Insights

This issuance marks the second time MOF has issued RMB sovereign green bonds, following the previous issuance in April 2025. The two successive issuances further broaden cross-border financing channels for China’s green and low-carbon development, continuously guide international capital into key green and low-carbon fields, and powerfully empower the green transformation and upgrading of the real economy. This fully demonstrates China’s firm stance and responsibility as a major country in anchoring its “dual carbon” strategic goals and adhering to a path of green, low-carbon, and sustainable development. For further details regarding the Second-Party Opinion issued by Lianhe Green for MOF’s first Framework, please visit the following link to view the full details: [PR] Lianhe Green Provides Second-Party Opinion for The People's Republic of China Sovereign Green Bond Framework.

International ESG trends

Britain Sets 87% Emissions Cut Target By 2040 As Energy Price Pressure Mounts

On June 2, the UK government set out its proposed level for the seventh Carbon Budget, which sets a science-led target of ~87% emissions reduction in the period 2038 to 2042 – endorsed by the Environmental Audit Committee and the Climate Change Committee.

It comes as an independent report from the Energy and Climate Intelligence Unit, supported by analysis from the Confederation of British Industries Economics, shows that the net zero economy supports over one million jobs in the UK, adding £105 billion in gross value added (GVA)  to the UK economy in 2025 alone, as it continues to thrive as one of the UK’s fastest-growing economic sectors.

Source: https://www.gov.uk/government/news/energy-security-jobs-and-investment-boost-through-climate-action

Lianhe Green Insights

The long-term emissions reduction target proposed by the UK this time reflects its macro strategy of attempting to diversify external risks by developing homegrown clean energy against the backdrop of international geopolitical volatility and high fossil fuel prices. From an ideal model perspective, a clear and science-led emissions reduction pathway helps guide the injection of long-term green capital and drives the growth of the net-zero economy. However, at the practical level, the short-to-medium-term transition period still faces severe tests: the capital investment required for large-scale infrastructure construction, the supply chain stability during the absorption and replacement of traditional energy, and the social operating costs that may be driven up in the initial stage are all unavoidable realistic pressures. As a pioneer economy in low-carbon transition, the UK's actual performance in balancing long-term low-carbon ambition with short-to-medium-term transition costs provides valuable lessons for other countries transitioning energy structure.

UK Proposes Dropping TCFD-Based Climate Reporting for Investment Products

The Financial Conduct Authority (FCA), the UK’s conduct regulator for financial services firms and financial markets, announced a new proposal to drop requirements for financial firms to publish TCFD-based climate disclosures for investment products, replacing them with simplified reporting on climate risks for retail investors, and on-demand emissions data for institutional clients.

The new proposals form part of the FCA’s efforts to streamline sustainability reporting requirements for asset managers and asset owners. The regulator estimated that the new rules would save investment firms approximately £20 million (USD 27 million) per year.

Source: https://www.fca.org.uk/news/press-releases/simpler-climate-reporting-rules-could-save-firms-20m-annually

Lianhe Green Insights

The FCA's proposal to drop TCFD-based disclosures for investment products marks a shift in the UK's sustainable finance regulation from "comprehensive compliance" to "pragmatic burden reduction." While maintaining core data transparency for institutional clients, the regulatory authority is attempting to strike a balance between improving the readability of information for the general public and reducing compliance costs for companies by simplifying retail reporting. While streamlining processes, this policy also places higher technical demands on preventing "greenwashing": how to ensure that simplifying retail investor reporting does not degenerate into a mere formality, and whether the compliance and enforcement framework around such on-demand data disclosures provides sufficient deterrence, will be the key to whether the proposal can achieve a substantive balance between "reducing corporate burdens" and "maintaining market trust."

Mainland China ESG trends

NDRC and Other Departments Issue the "Guidelines for the Accounting of Non-Fossil Energy Electricity Consumption (Trial)"

The National Development and Reform Commission (“NDRC”), the National Energy Administration (“NEA”), and three other central government departments have recently jointly issued and released the “Guidelines for the Accounting of Non-Fossil Energy Electricity Consumption (Trial)” (the “Guidelines”). This marks the establishment of a unified "yardstick" for the accounting of non-fossil energy electricity consumption in China, laying the institutional foundation for better promoting the implementation of the dual control system of carbon emissions.

In China, 95% of non-fossil energy is consumed in the form of electricity, and the accurate accounting of this portion of electricity is the core foundation for measuring the proportion of non-fossil energy consumption and conducting dual control carbon emission assessments. Previously, accounting across different regions was primarily conducted at the provincial level, lacking a unified methodology at the municipal and corporate levels, and rules for electricity trading, Green Electricity Certificate (“GEC”) trading, and carbon emission accounting lacked sufficient alignment. The newly released "Guidelines" make specific provisions on the identification methods and accounting methodologies for non-fossil energy electricity consumption.

Source: https://www.ndrc.gov.cn/xxgk/zcfb/tz/202606/t20260601_1405606.html

Lianhe Green Insights

The introduction of the "Guidelines" provides a unified weights and measures system for China's non-fossil energy electricity consumption, the core of which lies in establishing GEC trading as the primary channel for green electricity accounting, making corporate purchases of GECs a key leverage point for proving green consumption and carbon emission reductions from now on. More crucially, the "Guidelines" strictly enforce the exclusive rule of "each kilowatt-hour of electricity can only be claimed once," aiming to plug the loophole of double counting between the power generation side and the corporate side from the source, and to rationalize the alignment among electricity trading, GECs, and carbon accounting. However, for the "Guidelines" as a top-level design to progress toward full implementation, it still relies on the deep synergy of subsequent improvements in supporting laws and regulations, regular disclosure mechanisms for corporate carbon emission data, and a rigorous third-party certification and verification system, so as to truly ensure the authenticity and immutability of the accounting data, thereby consolidating the foundation of trust for the precise implementation of the dual control system of carbon emissions.

51 "AI+" Energy High-Value Scenarios Released

The National "AI+" Energy On-site Promotion Conference, hosted by the National Energy Administration (“NEA”), recently released the first batch of "AI+" energy high-value scenarios, which include 51 scenarios such as "Intelligent Generation and Evaluation of Power Grid Planning Schemes." The previously released "Implementation Opinions on Promoting the High-Quality Development of 'AI+' Energy" proposed to accelerate the empowerment of energy application scenarios. The 51 high-value scenarios released this time focus on the eight major categories of typical application scenarios proposed in the Implementation Opinions, exploring the formation of a new paradigm for the integrated development of "AI+" energy with scalable and replicable comprehensive solutions as well as referable business models, thereby promoting and enhancing the intelligent development level of the energy industry.

Among them, in the power grid field, focusing on scenarios such as planning review and dispatch operation, artificial intelligence improves the efficiency of power grid operation and management; in the field of new energy business models, centering on scenarios like virtual power plants and vehicle-to-grid interaction, artificial intelligence provides support for the incubation, cultivation, and large-scale development of new business models.

Source: https://www.news.cn/20260530/02447ae3f3e84f7ab4d22cdcaee1c000/c.html

Lianhe Green Insights

The release of the first batch of 51 "AI+" energy high-value scenarios marks that the application of artificial intelligence in China's energy industry has officially moved from "fragmented exploration" to "large-scale implementation." By deeply focusing on key fields such as power grid operation, virtual power plants, and vehicle-to-grid interaction, AI not only significantly improves the planning and dispatching efficiency of traditional power grids, but also provides powerful technical support for the large-scale development of new energy business models. The introduction of these high-value scenarios not only vividly practices the top-level design blueprint, but also accelerates the formation of a new paradigm for the integrated development of "AI+ energy" by constructing replicable comprehensive solutions and business models, becoming a key engine to drive the green transformation and upgrading of the energy structure and the intelligent leap of the industry.