Social Investment Landscape

Hong Kong

The social economy in Hong Kong is growing rapidly with strong government support, a well-established philanthropic culture and increasing corporate sustainability efforts

Summary

Executive Summary

Hong Kong, a Special Administrative Region of the People’s Republic of China, is often lauded as the freest economy in the world with free trade, low taxation and minimal government intervention. In 2018, the city state posted a strong GDP growth of 3.8% and sustained high FDI inflow of USD 112 billion, ranking it 4th in the world in terms of ease of doing business. Nonetheless, Hong Kong’s open economy is susceptible to trade fluctuations and is projected to slow down in 2019 due to trade tensions between the US and China, its largest trade partners. Recent growing political pressures from the Chinese government have also put Hong Kong’s open business and independent legal environment increasingly into question.

Impressive economic growth has also not translated into equitable welfare distribution. Income gaps between the rich and the poor continue to widen as the city state recorded a Gini coefficient of 0.539 in 2017, the highest in 45 years. Hong Kong’s ageing society and shrinking labour force pose significant challenges to growth and fiscal sustainability. Meanwhile, air pollution and extreme weather events like typhoons are significant environmental risks.

Hong Kong’s social economy is characterised by foundations with sizeable philanthropic assets as well as a legacy of pronounced government support and funding for social enterprises. Corporates are steadily increasing sustainability reporting in response to the government reporting mandate. However, sustainable investing has yet to be adopted by mainstream investors or family offices. Recent developments in green finance and venture philanthropy show continued engagement with innovative social investment practices.

Hong Kong’s Fact File

Hong Kong’s 2018 Fact File

7.4 million

Population

USD 454.9 billion

GDP (PPP)

World Rank 43

3.8%

GDP Growth

USD 61,450

Per capita GDP (PPP)

World Rank 11

25 26 in 2015

World Giving Index Rank

51%giving money 17%volunteering time 59%helping a stranger

117,000

Number of Millionaires

14.7%

Poverty

6/137

Global Competitiveness Index

Global Competitiveness Rank (2016-2017) – 9/138

4/190

Ease of Doing Business Rank

Ease of Doing Business Rank (2018) – 5/190
Source: ADB, Charities Aid Foundation, Credit Suisse, World Economic Forum, World Bank. Figures are accurate as of March 2019

Dashboard

SDG Dashboard

Hong Kong is grappling with a rapidly ageing society and a shrinking labour force. Its median age of 43 years is the 9th highest in the world and the total labour force is projected to plateau in 2019. Elderly and child poverty rates are particularly stark with 1 in 3 elderly and 1 in 4 children living below the national poverty line according to the government’s most recent statistics in 2016. The city state is also highly prone to far-reaching climate change risks, exacerbated by serious air pollution.
In 2015, the Planning Department unveiled “Hong Kong 2030+: Towards a Planning Vision and Strategy Transcending 2030” to guide the city state’s policy-making along 3 key building blocks:
  • Enhancing liveability by retrofitting the densely developed urban areas and optimising new development areas,
  • Equipping Hong Kong with land and space, supporting infrastructure and human capital for the economy to move up the value chain,
  • Building long-term capacity to sustain social and economic development and enhance climate change response.
In alignment with Hong Kong 2030+, the government’s 2018 policy agenda focuses on enhancing public governance, building a diversified economy and liveable city, creating better jobs and improving livelihoods.Note: Development indicators and SDG dashboard are not published separately for Hong Kong.

Source: sdgindex.org (2018)

Note: The “traffic light” colour scheme (green,yellow, orange, red) illustrates how far a market is from achieving a particular goal

Government Initiatives

Government Initiatives to Address Development Gaps

Climate action

Gap

  • Renewable energy only accounts for 1% of Hong Kong’s generating capacity.
  • Hong Kong’s 2030 carbon emissions target exceeds the C40 Cities-designated pathway by 78%.

Government Initiatives

  • Hong Kong’s Climate Action Plan 2030+ aims to reduce carbon intensity by 65-70% by 2030 from the 2005 base line. Key policy measures towards this goal include reducing coal-fired electricity generation, increasing the share of renewable energy, improving energy efficiency, and achieving carbon emission peak before 2020.

Education and employability

Gap

  • The university enrolment rates of 19- and 20-year-olds from the wealthiest 10% of families and those with household incomes less than half of the median level was 9.3% and 8% respectively in 1991, but the gap widened dramatically to 48.2% and 11% in 2011.
  • 30% of young people enrolling in associate’s degree, professional diploma and similar programmes came from families living below the poverty line in 2016, but the potential earning differential from having these qualifications has fallen significantly vis-à-vis post-secondary entry into the workforce, from 40% in 1996 to 13% in 2016.

Government Initiatives

  • In the Chief Executive’s 2018 policy address, several funding schemes to promote quality education in public sector schools were announced, which include an additional HKD 1.5 billion (USD 188 million) for teachers’ professional development.
  • The government has allocated HKD 120 million (USD 15 million) for the 2019-2020 academic year to provide subsidies for students in vocational training programmes for specific industries up to HKD 36,000 (USD 4,500).

Land use

Gap

  • According to government estimates, Hong Kong will require 4,800 hectares of land in the next 3 decades but so far has only identified 2,600 hectares. Our Hong Kong Foundation, an independent think tank, suggests an even wider gap of 6,400 hectares.

Government Initiatives

  • The government is rezoning single site, multiple use, new town extensions, developing artificial islands and adopting green urban systems to improve land use.
  • From 2019 onward, 70% of housing units that are built on newly developed land will be for public housing.

Poverty alleviation

Gap

  • Hong Kong had the second highest Gini coefficient in the world at 0.539 in 2017.
  • The most recent government statistics reveal that 1 in 4 children, aged 18 and below, and 1 in 3 elderly, aged 65 and above, live below the national poverty line.

Government Initiatives

  • The government rolled out a series of enhancements for its Low-income Working Family Allowance in April 2018. The measures increased all rates of allowance and expanded the allowance to include individuals and introduced new tiers of support to better address single-parent households.

Social protection

Gap

  • As of 2017, 16% of the population was 65 years old or older. The Census and Statistics Department projects that by 2064, 36% of the population will be over the age of 65.
  • With the world’s longest life expectancy of 81.3 years for men and 87.3 years for women, Hong Kong’s demographic imbalance will only become more exacerbated with time.

Government Initiatives

  • The government’s total social welfare expenditure for 2017-2018 was over HKD 79.8 billion (USD 10 billion), which was 86% higher than the allocated amount 5 years ago.
  • The government has planned to provide an extra monthly elderly allowance of HKD 1,060 (USD 135) starting February 2019. This is in addition to the Normal and Higher Old Age Living Allowance schemes that are already in place.
  • In the 2017-2018 budget, the government earmarked nearly USD 4 billion (HKD 30 billion) for elderly services and rehabilitation services for persons with disabilities.

Social Economy

The social economy in Hong Kong is growing rapidly with strong government support, a well-established philanthropic culture and increasing corporate sustainability efforts

DEAL SHARE PLATFORM

Deal Share in Hong Kong

Orbis International trains, mentors, and inspires eye care professionals around the world. We are currently partnering with governments and hospitals in Vietnam to provide eye care to the most needy.

Education, Health

SOAPer School Program

By Soap Cycling Limited

Through fundraising, SOAP Cycling promoting hygiene and providing over 190 schools in Asia with the hygiene kits with soap to fight COVID-19. Roughly USD $390 is needed to support one school with enough soap for 1 year.

Education, Health, Water and Sanitation and Hygiene

Financial Foundations

By Good Financial

We build customer-centric financial products for underserved, low-income women so they can support their families and achieve their dreams.

Education, Financial Inclusion, Gender, Livelihood and Poverty Alleviation

STICKu is a multifunctional technologically-equipped walking stick, aimed at providing high-quality aid to those who require walking assistance and allow the users to understand their body status.

Ageing, Health

The project looks to leverage eye-tracking technology to assist the disabled population by training their cognitive ability, autonomous communication and professional skills.

Education, Health

Creating a Sustainable Food Ecosystem

By Rooftop Republic Urban Farming

An award-winning social enterprise that aims to create a more sustainable food eco-system through transforming idling spaces into urban farms, and providing training and vocational opportunities.

Agriculture, Climate Action and Environment, Employability, Livelihood and Poverty Alleviation

To allow for behaviour change through more empathy in learning. We want to revolutionize perspective taking in learning and development. Primary beneficiary is all of us.

Education

Superkids Books

By Superkids Technology Education Limited

Superkids is an app that innovates on how and what children learn, through interactive storybooks about social issues around the world. We aim to promote positive values and hence build character.

Education

Case Studies

Case Studies in Hong Kong

RS Group: Investing in the future we want to create through Total Portfolio Management

能力建设:香港社会创投基金(SVhk)通过双引擎和影响力评估推动社会企业的发展

Climate Action and Environment, Education, Livelihood and Poverty Alleviation

Social Ventures Hong Kong moving social enterprises up through the dual engine and impact assessment

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Social Investment Landscape in Asia