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This paper examines how Hong Kong’s Taxonomy for Sustainable Finance (HKT) interacts with its international investment law (IIL) regime, focusing on the regulatory principle of Do No Significant Harm (DNSH). While the HKT recognizes DNSH as a core principle, it prioritizes market usability over rigorous integration, emphasizing only “Foundations of DNSH” without interpretive guidance. This subdued approach reflects alignment with the Common Ground Taxonomy (which excluded DNSH) and prioritizes green finance market development. Hong Kong’s IIL regime—comprising 23 BITs and 10 treaties with investment provisions—lacks definitional clarity on sustainability, risking incomplete assessments by arbitral tribunals in disputes involving public interest measures. The paper argues this gap constrains Hong Kong’s right to regulate. By expanding the HKT’s remit to substantively integrate DNSH, Hong Kong can fill the lacuna between IIL and sustainable development, providing a basis to interpret and enforce investment law-sustainability interactions while strengthening its position as a global sustainable finance hub.

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Principles of Sustainable Finance Regulation and Their International Investment Law Implications: The Case of Hong Kong and Its Taxonomy for Sustainable Finance

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  • 发表日期：

    2026年

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  • Soo-Hyun Lee

摘要

This paper examines how Hong Kong’s Taxonomy for Sustainable Finance (HKT) interacts with its international investment law (IIL) regime, focusing on the regulatory principle of Do No Significant Harm (DNSH). While the HKT recognizes DNSH as a core principle, it prioritizes market usability over rigorous integration, emphasizing only “Foundations of DNSH” without interpretive guidance. This subdued approach reflects alignment with the Common Ground Taxonomy (which excluded DNSH) and prioritizes green finance market development. Hong Kong’s IIL regime—comprising 23 BITs and 10 treaties with investment provisions—lacks definitional clarity on sustainability, risking incomplete assessments by arbitral tribunals in disputes involving public interest measures. The paper argues this gap constrains Hong Kong’s right to regulate. By expanding the HKT’s remit to substantively integrate DNSH, Hong Kong can fill the lacuna between IIL and sustainable development, providing a basis to interpret and enforce investment law-sustainability interactions while strengthening its position as a global sustainable finance hub.