Green Finance initiatives in China 中 央 财 经 大 学 绿 色 金 融 国 际 研 究 院 International Institute of Green Finance, CUFE 1
研 究 院 1 Background of Institute 前 身 中央财经大学绿色金融国际研究院 International Institute of Green Finance, CUFE • Independent Think Tank founded in Sept. 2016 Key Strategic Advantages • Predecessor: Research Center for Climate and Energy Finance, founded Reputation in Academia and industry, in Sept. 2011. both domestic and international • 35+ staff members, expanding rapidly since establishment in 2016 Close ties with a number of Chinese government branches • Standing member of the Green Finance Committee, China Society for Professional consultancy services to FIs, companies and independent Finance & Banking organisations • Key member of the Green Securities Committee, Securities Association of China Most competitive Chinese green finance database , including green • Key member of the Investment and financing Committee, China bond database and local green finance Environmental Protection Industry Association database; Most comprehensive database on ESG for Chinese listed 3 companies and Bond issuers
Main Activities Education Publications • Academic guidance • Treatises • International Youth Reseach Society of • Research reports Green Finance Policy recommendations Cooperation • Departments of the State Council • Joint research projects with • Local governments international institutions, such as UNEP, EIB, UN PRI, etc. Application Communication • Organize academic forums and high- • Product innovation : Green level round-table discussion Selection Index, Green Leading • Journal: Green Finance in China Stock Index, Green Bond Index, etc. • Green bond verification
Key Partners and projects Domestic Green bond verification Soil Remediation and industrial boilers research ESG related research and index products Carbon market research Green banking consultancy Urban green finance research Consultancy for extablishing green financial system Green financial policy suggestions Beautiful China ESG100 Stock Index Environmental Information disclosure work
Key Partners and projects International Green stock, bond and index Urban green finance SDG finance standards Green finance standards BRI green fiannce China-UK Green Finance Taskforce Green commodity finance Green bond quality ESG and economic performance National development banks and climate compatiable infrastructure Green retail banking Research on Asian sustainable finance
01 Progress in China's Green Finance Development 7
1 Progress in Green Finance Policy Policy Framework continuously being perfected Cornerstone: Guidelines for Establishing the Green Financial System Specialized policy Green Financial System in China on green bonds, green credits and Environmental Green Credit green investment Rights Trading Policy on Monetary establishing local Policy such as Environmental Risk Green Securities green financial MPA and MLF Analysis systems Green Insurance Local Practices Regulation on Green Finance Liability of Standardization Green Funds and International environmental Green PPP Cooperation pollution A package of green finance policy
2 Progress in Green Finance Policy Outstanding performance in Green Bonds Stead Increase in Green Credit Up to September 2018, total amount of green Up to June 2019, total green credit balance has • bond reaches 435.27 billion(193 issuance), among exceeded 9.47trillion RMB which green ABS takes 26.82billion(21 issuance) A Step forward towards establishing a Rapid development in Green Funds and PPP National Carbon Market In July 2018, China Asset Management NDRC offcially anounced the trail lauch of a • Association issued Green Investment national carbon market which ideally will cover Guideline(Trial) 1700 enterprises in electricity industry, accounting PPP model is widely used in green industry • for 3.5 billion tons of carbon emission(39% of the whole nation's total emission) Active Innovation in Green Insurance Green Finance Index Green bonds and green stock index adopting ESG 30 provinces has started pilots work in mandatory • • concept offered referances to principle investors. environmental pollution liability insurance
3 Innovative pilots for Green Finance Duplicable practices Green Finance Infrastructure ◼ Best practices get duplicated in ◼ Progress has been made in areas such as goverment project database, information guidance, green financial disclosure, credit reporting product innovation, mechanism system and green finance innovation, risk prevention. standardization. Positive impact Financial Risk Prevention ◼ Avoid severe green financial Environmental Issues such as air risks by establishing a and water quality have been mechanism involving risk effective addressed in the pilots, monitoring, Early Warning, contributing greatly to the eco Prevention and damage control. civilization.
4 Challenges The challenges for the next step Quantitative analysis in environmental Policy Coordination to be perfected risks and benefits to be strengthened Innovation in green financial products Different standards to be harmonized to be expanded Awareness and capacity to be Insufficient environmental information improved disclosure in the financial market
5 Way to pace forward Standardize environmental Harmonization of green finance information disclosure and related standards life- circle fund management Key to improve information Take part in seeking the common disclosure: (1)Improve environmental language in global green finance risk and benefits analysis capacity of verification institutes. development (2) Expand information disclosure to the whole life circle of fund raising and using. Innovate green financial Expand green finance pilots products and services Expand the scope of the pilots work to Seize the right timing for innovation more provinces and cities and in products and services to widen encourage localized supporting policy financing channels and lower financing cost.
02 Cooperation between China and Europe 13
1 Green Finance Cooperation between China and Europe 21st EU- China Summit, 2019 • Reaffirmed the commitment to the Paris Agreement and the Montreal Protocol; • Agreed the key step was reform in carbon pricing and fossil fuel subsidies; • Promised to strengthen cooperation to motivate private capital to sustainable and green economy Central Banks and Supervisors Network for Greening the Financial System (NGFS) • 8 countries initiated and 42 member countries joined, among which 12 of them are BRI countries including United Arab Emirates, Morocco, Malaysia(Up to June 2019) Harmonization of Green Finance Standards between China and the EU • White paper No.1 , The Need for A Common Language in Green Finance, released on COP23. It suggested a common framework for green finance standards between China and the EU, laying the foundation for a future harmonized standard which helps cross border green bond investment. • White paper No.2 , The Need for A Common Language in Green Finance, released on COP24. It offers an idea of a “translation” mechanism to harmonize the differences between standards in China and the EU.
1 Green Finance Cooperation between China and Europe China - UK China - France • • UK-China Green Finance Green finance first highlighted in the Taskforce launched in the 9th 5th High Level Economic and Financial China-UK Economic and Financial Dialogue(HED) ,2017 • Dialogue(EFD), 2017 Commitment to a post-2020 global • Green Investment Principle for biodiversity framework in the 6th BRI, 2018(made by the Taskforce) HED,2018 • • $400m green loan facility China - France Green Finance Joint annouced in the 10th China- Conference launched in Oct, 2018 UK EFD, 2019 China - Luxembourg • ICBC listed its first green bond on China - Germany Luxembourg exchang in 2017 • Flagship:Sino - Germany EC Park • China Construction Bank Corporation ➢ Founded in 2013; (CCB) - €500 million green bond issued ➢ Fixed asset reached to 53bn RMB on Luxembourg Green Exchange in in 2019. 2018 ➢ About 600 companies registered • Shanghai exchange & Luxembourg exchange - The Green Bond Channel 15
1 Green Finance Cooperation between China and Europe GIP for BRI • Reinforced the concept of low carbon and sustainable Given the fragile ecosystem development, helping improve investment environment and low environment and social risk management resilience, it's vital to develop • Big banks, funds, and financial institutes from the UK, green finance. France, Germany, Luxembourg, Japan, Hong Kong, Singapore, United Arab Emirates, Pakistan, Kazakhstan, Mongolia have joined in. Green bonds To fund green projects within framework of BRI With undeveloped infrastructure and industries as well as many Since 2015, Agricultural Bank of China, ICBC, Bank of social problems, BRI countries are China, China Construction Bank, and other large in need of sustainable financial institutions have issued green bonds, climate development. bonds, and sustainable development bonds at the Luxemburg Stock Exchange.
03 Cooperation opportunities in green finance between China and Hungary 17
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