Chinese Version

Book: Further steps for expanding green finance

Time:2017-12-18 From: Author:

On December 11th, during the Earth Summit in Paris, the French finance ministry, Paris Europlace, and other institutions came together at the 2017 Climate Finance Day Conference. More than 400 representatives from dozens of countries and international organizations participated in the conference. Dr. Ma Jun, of the Green Finance Committee of China, made a keynote speech, where he introduced the efforts made by China in developing green finance and promoting the international consensus on green finance in recent years.


In recent years, China constructed a close to complete policy framework for developing green financial system under the guidance of (关于构建绿色金融体系的指导意见) which was issued by People's Bank of China. The document provides a series of policy arrangements for defining green finance, offering incentive mechanism, strengthening the disclosure of environmental information, supporting innovation of green finance products, promoting local development of green finance, preventing green washing and so forth.  Other documents specifying the labor division tasks to specific departments and set up a timetable for the implementation of these work.


With the support from the government, China has made rapid progress in many areas of green finance. In 2016, China's green bond market became the largest in the world. Up to now, Chinese local governments have initiated about 50 green funds and social capitals have initiated more than 200. China has launched green finance areas in five provinces and eight cities, and most of these pilot areas have launched specific programs. Financial institutions and third-party organizations have promoted a number of innovative green finance products and analysis tools, including green ABS, green building insurance, green new energy insurance, green index and products, environmental stress testing methods, green rating methods and so on. The regulatory agency has put forward a timetable for the establishment of a mandatory environmental disclosure system covering all listed companies. GFC, the Green Finance Committee, is organizing pilots of environmental information disclosure in China's financial institutions. GFC will also set up a green project library to provide an information platform that connects China's green projects to domestic and foreign financial resources.


With regard to international cooperation, China launched the G20 green finance research group in 2016 and incorporated green finance into the G20 communiqué. A number of initiatives by the group for developing green finance internationally were included in the 2016 G20 Hangzhou Communique and the 2017 Hamburg G20 Action Plan, which provided an important driving force for the mainstreaming of green finance. In September this year, GFC and seven other China industry associations jointly launched the (中国对外投资环境风险倡议), providing practical advice for the how to incorporate green investments in the “Belt and Road " project.


Although China, France and other countries have made positive progress in green finance, the proportion of green finance to the whole financial system is still very small. Looking at the international situation, green finance still faces some problems and challenges, such as weak incentive mechanisms, lack of clear standards, limited ability to implementation, insufficient product tools and so forth. G20 should continue to promote green and sustainable finance. Central banks and financial regulators of different countries should strengthen communication and cooperation, and further explore their positive role in fostering green finance development and coping with climate change.


Author: Ma Jun, special adviser to the president of the People's Bank of China, Chairman of the Green Finance of the China Society for Finance and Banking