China says it wants to improve its green finance standards

USA & World

China says it wants to improve its green finance standards

China plans to improve its green finance standards to support its carbon-neutrality objectives and make it easier for foreign investors to enter the green finance market, central bank governor Yi Gang said on Wednesday.

“We will promote harmonisation of green finance standards at home and abroad by updating domestic standards and strengthening international cooperation”, Yi said via video at the Singapore Fintech Festival.

Carbon neutrality refers to the balancing out of a country’s carbon emissions with measures to mitigate their effects, such as planting more trees or capturing environmentally harmful gases and sequestering them underground.

President Xi Jinping promised in September that China would bring climate-warming greenhouse gas emissions to a peak before 2030 and achieve carbon neutrality by 2060, committing the country to an accelerated transition to renewable energy.

China has excluded “clean coal” from a list of projects eligible for green bonds, according to new draft guidelines published by the central bank in May.

As of June 2020, China’s outstanding green lending exceeded 11 trillion yuan ($1.69 trillion), the biggest globally, while its green bonds totalled 1.2 trillion yuan ($186.2bn), the second largest in the world, Yi said.

Financial technology, including big data and artificial intelligence and blockchains, will play an increasing role in supporting green finance, Yi said.

He said China would strengthen its study on the potential impact of environmental and climate risks on financial stability.