HKEX Insight

 

Innovative financing models are turning climate action ambition into widespread impact.

“There’s a whole range of financing mechanisms that you might not expect, which truly have the potential to scale,” Marianne Kleiberg, Regional Managing Director, Europe, The Nature Conservancy (TNC), shared during the accredited session.

These include the likes of nature bonds that “convert balance-sheet pressure into biodiversity gains, aligning investor demand with countries’ environmental priorities,” according to Kleiberg.

Synhelion, a Swiss producer of synthetic and sustainable fuels that can directly replace fossil fuels, adopts an innovative financing model that builds stakeholder ecosystems to grow its projects.

“We are building the value chain with our customers; we’re scaling exponentially over the next couple of years – and all of this will require a lot of financing,” co-founder and co-CEO Philipp Furler said.

The company seeks to bring together parties from feedstock providers to customers as a way to blend capital commitments from across the value chain and shorten time to financial close.

The fruits of these efforts include the launch of the world’s first industrial-scale solar fuel plant in 2024.

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Looking ahead, technology is steadily reshaping climate solutions.

"Climate tech is going to be extremely important. We have a large community of private investors, private equity, VCs and they are filled with position on AI. Now they're looking for the next big challenge,” said Derek Baraldi, Head of Sustainable Finance, World Economic Forum.

Tokenisation, the process by which traditional assets are represented as digital tokens issued via blockchain, is another hot topic at Davos this year, as it allows investors of all sizes to participate in projects that would otherwise be unaffordable.

“Tokenisation is still emerging, but it represents a massive opportunity,” said Baraldi.

In the sustainable finance space, applications range from carbon credits – where blockchain can verify authenticity – to green and blue bonds, enabling real-time tracking of proceeds.

Challenges remain, however, and greater data standardisation and more robust measurement frameworks are needed, so continuous innovation in these areas will be required for private capital to mobilise at scale.

It’s a crucial area of development, according to Leanne Todd, SVP, Head of Horizons, Energy Expansion and Sustainability, S&P Global Energy.

“Credible climate finance starts with data,” she said, and in a world where S&P's Energy Scenarios expects temperatures to rise 2.4°C by 2050, independent, comparable datasets will be foundational to mobilising the levels of capital needed to address the immense challenge ahead.

Finishing the session, HKEX’s Chow asked each panelist where they saw the biggest opportunities in this next wave of climate innovation.

For Baraldi, it’s about investability: address costs, mitigate risks, secure your demand, then the opportunities are immense. 

TNC’s Kleiberg is focused on agricultural technology, and the power it holds to shape livelihoods and improve outcomes in a world of rapid natural resource degradation and climate volatility.

On the side of S&P’s Todd, the surging demand for AI points to the vital need for infrastructure, with the choices being made today shaping how we drive clean technologies for the future.

These developments and areas of progress are a sign of our ultimate destination, according to Furler at Synhelion: “the circular system is where we are all heading and I see enormous growth potential.”

The bottom line is that it’s a crucial time for climate action, and for financial markets to connect capital with an evolving range of innovations and investment opportunities in the sustainable finance space. “Driving these synergies is how we turn ambition into impact,” Chow said as he closed the session.

At HKEX, this means continuing to evolve listing regimes to open pathways to capital for green technology firms and enforce robust standards of corporate governance and data disclosure for our issuer ecosystem.

It also means operating platforms for trading, custody and settlement of a widening range of products in the environmental marketplace.

As a world-leading financial markets infrastructure, HKEX is in a unique position to facilitate a sustainable future for the prosperity of all: by advancing dialogues like those at this session while also deepening partnerships and ensuring international investors connect with opportunities.