Press Release

Paris, 4th January 2021 – Starting from today, 22 banks, including BNP Paribas, HSBC and UBS, are approaching investors to invest in a $4 billion bond that the Hong Kong Airport Authority is attempting to raise to finance a third runway at the city’s international airport (1). One of the proposed tranches will be a 5-year green bond (2). The project raises serious climate- and biodiversity- related risks, especially for the threatened Chinese White Dolphin. Reclaim Finance denounces the banks’ participation and calls on investors not to participate in the deal to avoid greenwashing and reputational risks.

The three-runway project is part of the expansion plans of the Hong Kong International Airport (HKIA) which started in 2016 and should be fully completed in 2024 (3). According to Airport Tracker, the airport emits as much annually as three coal plants combined. Worse still, the envisioned expansion alone is equivalent to building a new airport next to the existing one (3).

In addition to its climate impact, the project threatens the last Chinese white dolphins left in Hong Kong’s waters. Also called pink dolphins, the species is threatened with extinction and is listed in Annex I (the highest protection level) of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITIES) (5). It’s one of several marine species that will see their habitat destroyed, along with the water, noise and air pollution caused by the project.

“The issuance of a green bond for such a devastating project might have been cleared for takeoff (6) but the biodiversity and climate risks associated with the project speak for themselves: labelling this project as green is pure high-flying greenwashing. Sincere investors should stay clear of this bond, if their climate commitments mean anything at all” states Lucie Pinson, director of Reclaim Finance.

Beyond the issue of classifying part of the project as green, the participation of 11 banks that are members of the Net-Zero Banking Alliance raises doubt on the credibility of their climate pledges and on how they intend to meet a net zero target while supporting air traffic growth. These banks are ANZ, Bank of America, BNP Paribas, Citibank, Credit Suisse, HSBC, J.P. Morgan Chase, Mizuho, Morgan Stanley, Standard Chartered and UBS.

Air traffic growth caused an increment of 42% of CO2 emissions between 2005 and 2019, even considering the continuous improvements in aircraft fuel efficiency (7). A study by the Shift Project that analyzed two scenarios of decarbonization of the aviation sector through technology shows that the sector could not realistically align with a 2°C trajectory without reducing traffic growth (8).

When banks, such as BNP Paribas, HSBC and UBS, go through the looking glass to paint an airport green, the basic credibility of their climate pledges is thrown into doubt. Financial institutions must publicly commit not to take part in any project that supports the growth of air traffic” adds Pinson. 

The Hong Kong Airport Authority is not the first airport company to issue a green bond to finance the expansion of its infrastructure. According to Reclaim Finance’s research, at least five other airport companies have done so since the first example, a green bond issuance by the Mexico City Airport Trust in 2016 (9).

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(1) The information was disclosed via the Bloomberg Terminal and reported by several media. Among the banks involved are BofA Securities, BNP Paribas, HSBC, JPMorgan, Standard Chartered Bank and UBS as Joint Global Coordinators, Joint Bookrunners and Joint Lead Managers; ANZ, Barclays, Bank of China, Citigroup, Credit Suisse, Mizuho Securities and Morgan Stanley as Joint Bookrunners and Joint Lead Manager.

(2) While the airport says the “green notes will be aligned with the requirements of the HKQAA Green and Sustainable Finance Certification Scheme” and that it has recently established a Sustainable Finance Framework, a closer analysis reveals an accounting trick by the airport to artificially display low emissions and green efforts. The HK Airport Authority only includes “Paper disposal at landfill and electricity consumption for processing fresh water and sewage” in it’s Scope 3 emissions (2020 Sustainability Report). The emissions from planes are not included, nor are the emission from passengers travelling to the airport, which represent the bulk of an airport’s emissions. Under Scope 2, which they refer to as ‘indirect emissions’, only electricity appears to be included.

(3) The construction of the runway also requires the construction of other facilities, such as a new terminal and passenger concourse, which would be finished by 2024.

(4) Data on current airport emissions can be found here : The new runway will increase HKIA’s passenger capacity to 120 million per year and freight capacity to 10 million tonnes annually. See the company’s webpage.

(5) In Hong Kong, the number of white dolphins has dropped by more than 80% in the past 15 years. In 2020, it was reported that estimates indicate an average of 32 Chinese white dolphins left in Hong Kong’s waters. See a WWF study, as well as the warning issued in 2016 on the impacts of the airport expansion plan.

(6) The Hong Kong Quality Assurance Agency (HKQAA) has certified the green notes of the bond under the HKQAA ‘Green Bond and Sustainable Finance Certification Scheme’. More generally, Sustainalytics, a Morningstar subsidiary, recently validated the Airport Authority’s ‘Sustainable Finance Framework’.

(7) The contribution of global aviation to anthropogenic climate forcing for 2000 to 2018, Lee et al., Atmospheric Environment, 2020, 117834, ISSN 1352-2310

(8) Flying In 2050 : What Aviation In A Constrained World ?, Shift Project, 2021.

(9) Other companies are the Mexico City Airport Trust, the Royal Schiphol Group, Swedavia, Aeroporti di Roma Group and Incheon International Airport Corporation.