Promote the high-quality development of climate-friendly financial institutions China's green finance is transitioning from "freehand painting" to "fine brushwork".
The 4th Symposium on Climate-Friendly Financial Institutions, co-sponsored by the Natural Resources Defense Council (NRDC) and the Climate Investment and Financing Committee (CIFA) of the Chinese Society for Environmental Sciences, was held in Beijing recently. Experts and representatives from national ministries and commissions, financial regulators, financial institutions, and research institutes discussed the two core topics of "Capital Market and Financial Innovation in Sustainable Development" and "Transition Finance Helps the Development of Climate-Friendly Financial Institutions", and discussed the participation of capital markets in sustainable financial innovation and transition finance to support green and low-carbon transformation.
Green finance solves the problem of financing low-carbon development
"The global low-carbon transition still faces a huge funding gap, and it is necessary to leverage a wider range of social capital to continue to promote financial innovation." Zhang Jieqing, chief representative of the Beijing Representative Office of the Natural Resources Defense Council (NRDC), said that actively promoting the construction of climate-friendly financial institutions, continuously improving the supporting role of multi-level capital markets in economic transformation, and improving the policy standards and product systems of green finance and transition finance are the proper meaning of financial support for green and low-carbon development.
Liu Fan, former deputy general manager of China Central Depository and Clearing Co., Ltd. and member of the Standing Committee of CIFA, pointed out that the capital market has provided strong financial support for climate investment and financing. "The total scale of China's labeled green bond issuance is close to 3 trillion yuan. If we consider the bonds that are not labeled but are actually invested in green industries, the balance of green bonds in the broad sense is close to 5 trillion yuan, achieving a carbon emission reduction of 370 million tons. The domestic green bond market has entered a stage where refined development is required. Improving the level of information disclosure of green bonds is not only conducive to avoiding the risk of greenwashing, but also helping to quantify the investment efficiency of green bonds. Some regions in China have begun to pilot the establishment of an environmental benefit index system and strengthen the information disclosure of green financial products, which is a good practice for China to lead the world, and the experience formed can be shared with the world. ”
"China has established a policy framework for financial regulation to support the development of green finance at an early stage." Wang Qingrong, director of the Policy Research Department of the State Administration of Financial Regulation, said that in terms of climate change mitigation, financial institutions support the development of strategic emerging industries through loans, bonds, funds, trusts, equity investment, insurance and other tools, providing key financial support and risk protection for energy transition, low-carbon technology research and development and other fields.
Green finance is developing towards refinement
Zhang Xin, Chief Economist of the National Center for Climate Change Strategy and International Cooperation, shared his thoughts on accelerating the construction of high-quality climate-friendly investment institutions. He outlined the framework and elements of climate-friendly investment institutions, proposed that the construction of a unified and standardized financial carbon emission statistical accounting system and a climate-friendly information disclosure system is the top priority, and put forward ideas for establishing and improving these two key systems, and at the same time put forward suggestions on ensuring the policy coordination and mechanism coordination of the construction of climate-friendly investment institutions from the three dimensions of green and low-carbon finance and taxation, green and low-carbon consumption, and market mechanism construction.
Lu Zhengwei, Chief Economist of Industrial Bank, said that the development of green finance in China is transitioning from "freehand painting" to "fine brushwork", and the top-level design of green finance continues to improve, and the standard system continues to improve. "In the future, it is still necessary to further standardize the ESG information disclosure of financial institutions and enterprises, promote the development of green power and carbon emission accounting, so as to meet the needs of domestic industrial transformation and cope with the pressure brought by the EU's carbon tariff policy."
Sun Yiping, director of the Chinese Society for Environmental Sciences, introduced the evaluation index system of climate-friendly financial institutions. The standard refers to relevant international and domestic research results and the practical experience of financial institutions, and provides an important reference for financial institutions to incorporate climate governance into investment and financing decisions. Sun Yiying said that in the next stage, the evaluation indicators will be further refined and quantified based on strategic orientation, problem orientation and result orientation.
How can green finance help low-carbon projects?
In the roundtable session on "Capital Market and Financial Innovation under Sustainable Development", Chen Ji, Executive General Manager of CICC Research Institute, believes that direct financing of technological innovation needs to be allocated across time and space between the real economy and capital, and the capital market can play a greater role in green and low-carbon transformation. Rong Lei, vice president of China Venture Capital, emphasized that unlike banks and other funds that enter at the scale stage of enterprises, venture capital can provide initial start-up capital for transformation technology companies. Andrew Liu, chief actuary of Yingda Taihe Property & Casualty Insurance, pointed out that insurance can support low-carbon transformation on both the liability side and the asset side, and the long-term characteristics of insurance capital also meet the long-term capital needs of low-carbon transformation projects. Xiao Lei, executive general manager of the fixed income department of CITIC Securities, believes that bond financing has flexibility in issuance methods and product innovation, and the comprehensive cost of capital is relatively low, which can play a targeted role in the green development of enterprises.
In the roundtable session on "Transition Finance for the Development of Climate-Friendly Financial Institutions", Li Zhiqing, director of the Center for Environmental Economics at Fudan University, said that the recent guidance issued by seven ministries and commissions has broadened the definition of green finance, with a special emphasis on providing financial support for the green and low-carbon development of high-emission and high-carbon industries. Xie Wenhong, head of the Climate Bonds Initiative in China, believes that compared with green finance, the implementation paths of transition finance for different industries and types of entities are quite different, so more targeted policy guidance and financial tools are needed. The roundtable experts agreed that the development of transition finance requires better coordination among governments, financial institutions and industries, and that product innovation and carbon accounting are particularly important for the implementation of transition finance.
More than 50 experts from Industrial Bank, CICC Research Institute, China Venture Capital, Yingda Taihe Property & Casualty Insurance, CITIC Securities, Bank of Communications, CECEP Capital Holdings, Environmental Economics Research Center of Fudan University, School of Economics of Fudan University, CBI, China Bond Financial Valuation Center, CECEP and other institutions attended the meeting, with more than 160,000 online viewers.
