Wang Naixiang: Continue to promote the construction of the national carbon market and ESG service ecosystem
"The carbon market and ESG are both important starting points for us to deal with climate change, promote green transformation, and build a beautiful China. They are also important places to write a good job in green finance." Wang Naixiang, Chairman of the Beijing Green Exchange (hereinafter referred to as the Green Exchange), pointed out in his keynote speech on July 5 at the forum of the 2024 Beijing News Shell Finance Annual Conference with the theme of "Opportunities and Challenges in the Era of Strong ESG Regulation".
According to Wang Naixiang, the Beijing Green Exchange was established in August 2008. It has been deeply involved in the green and low-carbon field for 16 years, taking the construction of the carbon trading market and participating in the construction of the green financial system as key work contents, and forming carbon pricing, carbon quantification, and carbon finance. Three core capabilities.
"Guo Fa [2021] No. 15 proposed: 'Promote the Beijing Green Exchange to upgrade to a global national green exchange on the basis of assuming the functions of a carbon trading center such as national voluntary emission reduction, and build green finance and sustainable finance.' This further clarifies the functional positioning and points out the development direction for us." he said.
The carbon market is an important policy tool for using market mechanisms to control greenhouse gas emissions
In the keynote speech, Wang Naixiang first shared on-site the practice and experience of the Beijing Green Exchange in supporting the construction of the national carbon market.
According to his introduction, the carbon market is an important policy tool for using market mechanisms to control greenhouse gas emissions. The construction of my country's carbon market has gone through more than 10 years of development. It mainly consists of the carbon emissions trading market, that is, the mandatory carbon market, and the voluntary greenhouse gas emission reduction trading market, that is, the voluntary carbon market.
"The two have their own focuses and operate independently, and are complementary and interconnected." Wang Naixiang explained in detail that the trading products in the mandatory carbon market are carbon emission quotas, including local carbon quotas and national carbon quotas; the trading products in the voluntary carbon market are certified voluntary emission reductions, or CCER, also known as carbon credits.
The mandatory carbon market is gradually promoted mainly in accordance with the idea of "piloting first, summarizing experience, and rolling out across the country". Since 2013, local carbon emission trading markets in seven provinces and cities including Beijing have opened one after another. After more than ten years of construction and operation, the Beijing Carbon Market has now formed a regional carbon trading market with "complete systems, active transactions, strict supervision, and standardized market". As a pilot trading platform for carbon emission rights designated by the Beijing City Government, the Green Exchange continues to support the city's key emission units to complete the annual performance work of the Beijing City Ecological Environment Bureau. So far, the cumulative transaction volume has exceeded 100 million tons, and the transaction volume has exceeded 4.1 billion yuan. The transaction volume and transaction volume are among the top in the domestic pilot carbon market. At the same time, the Green Exchange has cooperated with the Beijing City Ecological Environment Bureau to carry out paid bidding and issuance of quotas for two consecutive years, and has achieved good results. The operation of the carbon emissions trading mechanism has effectively promoted the decline in the total amount and intensity of carbon emissions in Beijing City, and contributed the "Beijing experience" to the construction of the national carbon market and the construction of low-carbon cities across the country.
As an important part of the national carbon market, the voluntary carbon market can not only support emission control units to complete their performance obligations and achieve full coverage of emission reduction entities in the national carbon market; it will also create huge green market opportunities, which will be of great significance to various industries. All types of market entities are of great significance; it provides an important entry point for exploring and strengthening international exchanges and cooperation in the carbon market.
Under the guidance of the Climate Department of the Ministry of Ecology and Environment and the Beijing City Bureau of Ecology and Environment, Wang Naixiang said that the Green Exchange has been actively promoting the construction of a national voluntary greenhouse gas emission reduction trading market.
The first is to develop and build a national voluntary greenhouse gas emission reduction registration system and trading system, responsible for the operation and management of the trading system, and provide transaction settlement and other services; the second is to study and compile voluntary emission reduction trading and settlement rules to provide a basis for the national voluntary emission reduction trading market. Provide rule guarantees for safe, stable, standardized and efficient operation.
"On January 22, 2024, the launching ceremony of the National Greenhouse Gas Voluntary Emission Reduction Trading Market was held. Ding Xuexiang, member of the Standing Committee of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, attended the event and announced the launch of the National Greenhouse Gas Voluntary Emission Reduction Trading Market. The total transaction volume that day was more than 370,000 tons, and the total transaction volume exceeded 23.83 million yuan." He introduced.
Focusing on improving the quality of ESG information disclosure and serving the sustainable development of enterprises, ESG will bring many opportunities
Next, Wang Naixiang shared the practice and experience of green exchanges in assisting the construction of ESG ecosystems.
As a development concept and sustainable practice that fully pays attention to non-financial factors such as environment, society, and governance, ESG has been highly valued by domestic and foreign competent authorities and standards bodies in recent years, and relevant policies have become increasingly strict.
Internationally, the International Sustainable Development Standards Council (ISSB) issued the first two international sustainability disclosure standards in June 2023, which are landmark global standards; the Council of the European Union adopted in May 2024 The "Corporate Sustainability Due Diligence Directive" is another important regulation that forces companies to disclose sustainable development information after the EU approved the Corporate Sustainability Reporting Directive two years ago.
Domestically, in June 2022, the former China Banking and Insurance Regulatory Commission issued the "Guidelines for Green Finance for the Banking and Insurance Industry", requiring bank insurance institutions to incorporate ESG into management processes and comprehensive risk management systems, strengthen information disclosure and exchanges and interactions with stakeholders, and improve Relevant policies, systems and process management; and clarified that bank insurance institutions should establish and improve relevant internal management systems and processes within one year from the date of implementation of the guidelines to ensure that green finance management complies with regulatory requirements. In July 2023, the General Office of the State-owned Assets Supervision and Administration Commission of the State Council issued the "Notice on Forwarding the" Research on the Preparation of ESG Special Reports on Listed Companies Controlled by Central Enterprises ". In order to implement the requirements of policy documents such as the China Securities Regulatory Commission's "Opinions on Strengthening the Supervision of Listed Companies (Trial)", in April this year, the Shanghai Stock Exchange, Shenzhen Stock Exchange, and Beijing Stock Exchange officially issued the "Guidelines for Sustainable Development Reporting of Listed Companies." In May, the Ministry of Finance issued the "Enterprise Sustainable Disclosure Guidelines-Basic Guidelines (Draft for Comments)", which for the first time clearly proposed the establishment of a national unified sustainable disclosure standard system and clarified the timetable, which marked my country's unified sustainable disclosure standards system. The construction of the disclosure standards system kicked off.
Wang Naixiang said that the increasingly clear policy requirements will promote the standardization and rapid development of my country's ESG. At the same time, he also believes that with the trend of increasingly mature standards and gradually strengthening supervision, ESG will bring many opportunities around improving the quality of ESG information disclosure and serving the sustainable development of enterprises.
From an enterprise perspective, we should closely follow policies and industry trends and strengthen ESG information management and disclosure capabilities. Currently, information disclosure with carbon emissions as the core is a mainstream trend. ISSB's international standards and reporting guidelines of the three major domestic exchanges require entities to disclose carbon emissions. Enterprises can strengthen their own capabilities through digital means and cultivating professional talents to cope with relevant trends.
From the perspective of financial institutions, the ability to identify and manage ESG risks should be strengthened. On the one hand, financial institutions can study and incorporate ESG factors into credit rating methods and models in accordance with the requirements of the guidance opinions of the seven departments. On the other hand, they can carry out green financial product innovation by strengthening green quantitative capabilities such as carbon accounting to serve the green transformation of the society and economy.
From the perspective of the whole society, a good ESG ecosystem should be built. By optimizing and improving ESG ecosystem elements such as talents, information, funds, and intermediaries, we can promote ESG industrialization, agglomeration, and large-scale development.
Beijing City attaches great importance to ESG-related work. Not long ago, the Beijing City Development and Reform Commission issued the "Beijing City Implementation Plan for Promoting the High-Quality Development of the Environmental and Social Governance (ESG) System (2024-2027)", which clarified the work goals until 2027 and proposed to strengthen ESG information disclosure, strengthen the construction of the ESG ecosystem, support the high-level and characteristic development of the ESG rating system, enrich and deepen ESG practice, promote ESG pilot demonstrations, and build a scientific and effective supervision system and other key work tasks. Among them, it is clearly proposed to support the Beijing Green Exchange and other relevant institutions in exploring the construction of ESG market service ecosystems.
"This is not only a high recognition of our past ESG-related work results, but also an expectation and requirement for our future work." Wang Naixiang said.
