China Needs to Raise Green Finance Standards to Meet Targets


China needs to improve its green finance standards and require banks to reveal more carbon emission information for the country to meet its carbon neutral pledge by 2060, according to a top official from the green finance sector.

While “clean coal” plants have been removed from the latest draft list for projects that can be funded by green bonds, other standards for green finance haven’t been adjusted accordingly, Ma Jun, chairman of China Green Finance Committee, said in a speech on the weekend.

“To achieve the carbon neutral goal, we need a large amount of green and low-carbon investment, and most of such investment would be done through the financial system,” Financial News cited Ma as saying, adding that the green finance system “faces some major problems and challenges.”

Ma, who is also an adviser to the central bank, added that disclosure of environmental information from companies and financial institutions is an “important foundation.” He said Chinese banks don’t have enough awareness of climate risks in investment decisions.

According to a carbon neutrality road map by Tsinghua’s climate researchers, China will need an investment of about 138 trillion yuan ($21 trillion) to keep global warming rising less than 1.5 degree Celsius from pre-industrial levels. China will need green investment worth hundreds of trillions of yuan in the next 30 years to reach the carbon neutrality goal, bringing opportunities for green finance, Ma said.

Sales of green bonds from China fell 43% by early November to around $13.1 billion, the first drop for the period since data compiled by Bloomberg became available in 2015. That dropped China to fourth place in the global rankings of issuers, amid the pandemic’s disruption to the nation’s green projects and financing needs.

©2020 Bloomberg L.P.

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