There's a price to pay for a zero-Covid policy and lengthy flight bans that exclude places like Australia, the UK and U.S.
Hong Kong’s ambition to become a hub for green and sustainable business is under threat as its persistent tough border controls against Covid-19 make the task of attracting senior specialists harder for financial institutions.
Bankers and advisers said the risks of Beijing’s “zero-Covid” policy, which has already caused a talent crunch in the Chinese territory, are growing as most other nations cut back coronavirus curbs.
Flight bans, lengthy and expensive quarantine norms, limited access to public services and the threat of separation from family members who test positive have all spooked potential talent.
“It is getting harder and harder to find staff in Hong Kong,” said Tony Wong, founder of ESG specialist Alaya Consulting, a strategy and reporting firm.
“The city is trying to be a green investment hub globally, but we cannot get the staff. Covid and the restrictions have made it harder to attract staff.”
Hong Kong has stepped up efforts in recent years to become a leader in Environmental and Social Governance (ESG), including creation of working groups with government officials and global firms to develop a local talent pool.
And the city remains committed to the effort to become a green finance hub, the Hong Kong Monetary Authority (HKMA) said in a statement on Wednesday.
“These pandemic-related challenges should be transitory and we are confident that the fundamentals underpinning Hong Kong’s status … its robust financial system and ample growth opportunities, including ESG-related business … remain strong and intact.”
The priority of evolving into a regional green and sustainable finance hub was declared last October by the HKMA’s deputy chief executive, Edmond Lau.
As a global transition to a low-carbon economy gathers pace, ESG investments exceeded $35.3 trillion, the Global Sustainable Investment Alliance says, as institutional investors are increasingly graded on the sustainability of their holdings.
But Hong Kong’s ambitions are being put to the test as the tough Covid curbs shrink its existing pool of foreign talent.
Adding to the bad news was this week’s delay of the launch of its inaugural retail green bond worth $768 million because of the rapid spread of infections.
That surge has spurred Hong Kong to adopt some of the world’s toughest curbs, despite the growing skepticism of some business leaders, medical experts and diplomats about the viability of a zero-Covid policy.
Flight bans on arrivals from nine countries, from Australia to Britain and the U.S., will last until April 20.
Other zero-tolerance measures include the closure of entertainment spots, compulsory testing on entire buildings and close contacts sent to quarantine camps. In some cases, parents were separated from young children admitted to hospital.
“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 told Reuters.
He spoke on condition of anonymity as he was not authorised to speak to media.
The stringent curbs follow political ructions, including worsening Sino-U.S. ties, that prompted an earlier exodus of expatriates from Hong Kong.
The ESG depletion is also being exacerbated by an easing of curbs in Singapore, a rival regional finance and ESG hub.
Traditionally seen as risk-averse, Singapore is opting for a more balanced approach of living with Covid, so as to protect its dense population while reopening its economy and borders.
In 2019, the wealthy city-state’s central bank set up a $2-billion green investments program and encouraged asset managers to beef up local ESG teams.
A senior executive at a global asset manager said the central bank, the Monetary Authority of Singapore (MAS), was incentivising firms to boost staff and preferred senior management to be based there. MAS had no immediate comment.
Andrea Wong, an associate director at headhunter Robert Half, said she was aware of a couple of ESG professionals relocating to places such as Singapore in recent months.
“The travel and quarantine restrictions do inevitably make relocating talent from overseas to Hong Kong more difficult,” added Wong.
(Reporting by Scott Murdoch in Sydney and Selena Li in Hong Kong; Editing by Clarence Fernandez)
This article was written by Selena Li and Scott Murdoch from Reuters and was legally licensed through the Industry Dive Content Marketplace. Please direct all licensing questions to [email protected].
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Photo credit: Hong Kong has stepped up efforts in recent years to become a leader in Environmental and Social Governance. Katie Musial / Unsplash