Contribute wisdom to the realization of green development of the global economy China ushered in the golden period of green financial development

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G20 and Green Finance At the initiative of our country, the issue of green finance was included in the G20 agenda for the first time this year, and a green finance research group was established and the G20 green finance comprehensive report was launched. In this report, it clarified the definition, purpose and scope of green finance, and the challenges it faces, and provided suggestions for countries to develop green finance to support global sustainable development.

G20 and Green Finance

At the initiative of our country, the issue of green finance was included in the G20 agenda for the first time this year, and a green finance research group was established and the G20 green finance comprehensive report was launched. In this report, it clarified the definition, purpose and scope of green finance, and the challenges it faces, and provided suggestions for countries to develop green finance to support global sustainable development.

From the debut of the green finance issue in the G20 to the joint issuance of the "Guiding Opinions on Building a Green Financial System" by seven ministries and commissions including the People's Bank of China, my country has become the world's first economy to establish a green financial policy system.

The People's Bank of China emphasized that the main purpose of building a green financial system is to mobilize and encourage more social capital to invest in green industries, while more effectively curbing polluting investment. The construction of a green financial system will not only help accelerate the transformation of my country's economy to green, but also promote technological progress in the fields of environmental protection, new energy, and energy conservation, and accelerate the cultivation of new economic growth points.

From a global perspective, green finance, as a new financing method that has emerged in recent years, is becoming an important driving force for global green growth and sustainable development. Whether from top-level design or private participation, China's green financial system is becoming a global leader in green finance.

Internet financial giant Ant Financial, for example, recently opened carbon accounts for 0.45 billion users of its Alipay, which is by far the world's largest personal carbon account platform.

Recently, seven ministries and commissions including the People's Bank of China and the Ministry of Finance jointly issued the "Guiding Opinions on Building a Green Financial System" (hereinafter referred to as the "Opinions") to comprehensively deploy China's green financial system and solve the problem of financing difficulties and expensive financing for green industries.

Ma Jun, chief economist of the Research Bureau of the people's Bank of China and director of the Green Finance Professional Committee of the China Finance Society, believes that the promulgation of the "opinions" indicates that China has formed a high degree of consensus from the highest strategic level to the level of relevant ministries and commissions.

"China is ushering in the golden age of green finance development. "Zeng Gang, director of the Banking Research Office of the Institute of Finance of the Chinese Academy of Social Sciences, said that while building and improving its own green financial system, my country is also actively participating in the formulation of global green financial rules, contributing" Chinese wisdom "to the realization of green and low-carbon development in the global economy".

Establishment of National Green Development Fund

Strong commitment from the central government

Just before the opening of the G20 summit, the world's top two economies, China and the United States, which account for 38% of global carbon emissions, formally approved to join the Paris Climate Change Agreement (hereinafter referred to as the "Paris Agreement") at almost the same time.

"To achieve my country's goal of controlling environmental pollution and the international commitment to peak carbon emissions by 2030 or before, it is estimated that 3 trillion -4 trillion yuan of green investment will be needed every year. However, the industry estimates that financial funds can only cover about 15%, so the vast majority of green investment needs to come from social funds. "Ma Jun pointed out in an interpretive article that the" Opinions "will become an important and positive policy signal to guide the financial industry and enterprises to carry out green investment and financing.

"In the past, China's green finance was mainly limited to green credit. "Ma Jun said, but many green projects, especially new projects, first need equity financing, because it needs capital to further debt financing. So we should promote the equity financing of green projects by establishing some green equity funds. Many green projects are relatively new. Technically speaking, the people feel that the risks are relatively high and they are also facing policy uncertainties. Because of these uncertainties, private funds are less willing to invest in these projects. If government-backed funds participate in investing in these projects, it will greatly reduce the resistance of private funds to the risks of such projects and make them willing to follow suit.

Ma Jun believes that the "Opinions" proposed for the first time to "establish a national green development fund to invest in green industries, reflecting the country's guidance and policy signal role in green investment". From an international point of view, China's establishment of a green development fund at the national level is a rare strong commitment of the central government to green development.

A comparable case is the UK Green Investment Bank, founded in 2012. Although this institution is called a "bank", it cannot absorb deposits or issue bonds, so it is in fact a green fund.

Largest countries of issue of labeled green bonds

Grow from zero to hero in one year

China is the largest issuer of climate bonds, as mentioned in the "Bonds and Climate Change: Market Status Report 2016", jointly released by the Climate Bonds Initiative. In the labeled green bond market, China is also playing a leading role. China is also the largest issuer of labeled green bonds since early 2016.

According to statistics, up to now, China has issued nearly 120 billion yuan of green bonds, accounting for 45% of the global green bonds issued in the same period. Euromoney (Euromoney) executives commented on the momentum of China's green bond market, which grew from zero to hero (grew from zero to hero) in a year.

Li Yifeng, deputy general manager of the bond financing department of Haitong Securities, analyzed that the biggest driving force for the green bond market is the support of the competent authorities for green bonds and the degree of recognition of green bonds by investors. At present, the performance of these two aspects is very positive, the competent authorities on the green bond review speed is relatively fast, investors are also very recognized, and the current interest rate is generally lower than the bond market interest rate.

It is understood that China is the first country to issue its own green bond definition standards by a government-supported institution (I. e., the Green Finance Professional Committee of the China Finance Association). At the end of 2015, the People's Bank of China and the Green Finance Professional Committee of the China Finance Society simultaneously issued the announcement of green financial bonds and the "Green Bond Project Support Catalog (2015 Edition)" to launch China's green bond market. Since then, the NDRC and the two stock exchanges have also issued guidelines on green corporate bonds and green corporate bonds.

Ma Jun said that the development of the green bond market has many benefits, such as opening up new financing channels for green enterprises and projects, solving the maturity mismatch of banks and enterprises, providing new asset classes for investors, and strengthening the green investment behavior of issuers through reputation effect.

Liang Xiaojing, senior manager of the asset and liability management department of Shanghai Pudong Development Bank, also said that the marketization of interest rates in China has been basically completed, and the channels for banks to expand their liabilities have become more diversified. As a kind of financial bonds, the issuance of green bonds helps to improve the structure of assets and liabilities.

Participation of all parties in the market

Improve the "green" gold content and credibility

"China's green bond market is currently driven from the top down, which is different from the bottom-up development of social responsibility funds in foreign countries. "Cao Jin, director of Hesheng Asset Innovation, said that as an investor, he is optimistic about the long-term development of green bonds, but the short-term investment assessment is still focused on yield and safety. He believes that the low interest rate of green projects is indeed beneficial to the green industry to reduce financing costs, but it also means that the rate of return of investors is insufficient, which may be contrary to the original intention of investors. Therefore, it is necessary for the regulatory authorities to take measures such as interest discount to attract investors to choose the green market.

Liu Wei, deputy director of the bond business department of the Shanghai Stock Exchange, suggested that the quality of green bond issuance is more important than the quantity, and the green bond market should "start in a standardized way and develop healthily." it is hoped that every single green bond will be standardized and standardized in terms of green verification, sustainability evaluation, and future green performance evaluation.

Wang Hua, vice president of Lyon Business School and president of the Asian campus, also pointed out that green bonds are an area where the financial and environmental protection circles meet. All parties in the market should jointly participate in the construction of the green bond ecosystem and formulate clearer "green" standards. Improve the gold content and credibility of the "green" label.

Ma Jun said that in this "opinion", it also puts forward some development directions for improving the green bond market in the next step, including "establishing and improving the domestic definition standard for green bonds", which aims to prevent the risk of regulatory arbitrage. it also helps to reduce the cost of investors' "search" for green bonds; "study and explore the third-party evaluation and rating standards of green bonds", to ensure that third-party certification and green rating can objectively and effectively evaluate the environmental benefits of green bond issuers and supporting projects, and strengthen the issuer's motivation to improve environmental information disclosure.


Green Bond Assessment Framework Released

It's good for investors to put money into real green projects.

This newspaper comprehensively reported that Dongfang Jincheng International Credit Evaluation Co., Ltd. and Trucost, a global environmental consulting company, recently jointly launched China's green bond evaluation framework. The assessment framework is established after comprehensive consideration of current policies and regulations, and aims to form a consensus on assessing the environmental impact of green bonds from all walks of life, providing confidence and protection for the interests of issuers, investors and policy makers. The assessment framework was also supported by the Green Finance Committee of the People's Bank of China.

After a comprehensive analysis of the issuer's past green credit history and information disclosure (including the positive and negative environmental impact of the project, risk control measures, project follow-up arrangements, etc.), the assessment framework divides the green bonds issued by it into five levels and continuously tracks them during the life of the bonds.

Green bonds that receive the highest rating (G5) should perform best in both project environmental risk management and achievement of long-term environmental objectives. The higher the level, the better the environmental objectives disclosed by the representative can be achieved, the better the compliance with environmental regulations, the better the transparency of disclosure and the better the credit history.

According to reports, the main users of the evaluation framework are credit rating agencies, but they have certain reference value for the second-party opinions and third-party certification involved in green bonds. The assessment framework is provided free of charge and feedback from all relevant participants is welcome.

Jin Yongshou, general manager of Dongfang Jincheng, said that on August 31, the "Guiding Opinions on Building a Green Financial System" issued by the People's Bank of China and other seven ministries and commissions proposed to unify the definition standards of green bonds and encourage third-party green assessments. The green bond evaluation framework jointly released this time provides a relatively clear set of evaluation and analysis tools, which is conducive to investors to invest green funds in truly green projects rather than "green washing" projects.

Trucost CEO Rid Mattison said: "For the continued prosperity of this market, building investor confidence and providing security for issuers is critical. Therefore, we hope that our evaluation framework can achieve this goal and ensure that the financial industry can help China's economic green transformation."

Original title: China ushered in the golden period of green financial development