Under the “double carbon” goal, green investment is becoming one of the important directions of insurance investment. However, in the National People’s Congress,The Pacific OceanAccording to Zhou Yanfang, deputy general manager of Medical and Health Management Co., Ltd., insurance capital’s participation in green investment still faces challenges such as lack of industry standards and related incentive policies.
In response to these problems, during the two sessions, Zhou Yanfang suggested that relevant incentive measures should be introduced, and the construction of industry standards and data platforms should be carried out to further promoteinsuranceFunds participate in green investment.
Challenges still remain in green investment of insurance capital
ChinainsuranceStatistics from industry associations show that by the end of 2020,insuranceThe stock scale of funds used in green investment is 561.5 billion yuan, an increase of more than 40% compared with 2018.
“The nature of insurance funds is a natural fit for green investment.” Zhou Yanfang said that from the perspective of green projects, achieving “carbon neutrality” requires an investment scale of more than one trillion yuan, and the project cycle is often long. Compared with other funds in the capital market, insurance funds have the characteristics of long-term investment, value investment, and risk management expertise, and the attributes of funds are naturally compatible with green investment. From the perspective of insurance companies, green investment can help improve the investment framework of insurance institutions, enhance the social image of insurance institutions, hedge the transition risks brought about by climate change, and grasp my country’s “carbon peak” and “carbon neutrality”. Strategic development opportunities brought about by goals.
However, from the perspective of proportion, the scale of green investment of 561.5 billion yuan only accounts for 2.6% of the balance of 21.68 trillion yuan of funds used by my country’s insurance industry at the end of 2020. Zhou Yanfang believes that the current awareness and practice of green sustainable investment by domestic insurance funds are still in the initial stage of exploration, the institutional system, standardization and information disclosure of green sustainable investment still need to be improved, and there are still some problems in the practice of green investment. .
In terms of industry standards, green bonds are currently able to obtain official green certification, and the first creditor’s rights plan to obtain green certification has also been implemented recently. However, in addition, trust plans and other financial products have not yet made it clear whether they have green attributes, so that insurance companies lack the basis for judging the green degree of relevant enterprises and projects, and are conservative when using insurance funds for green investment.
In terms of incentive measures, Zhou Yanfang said that green financial projects tend to have strong externalities and low yields, which are not comparable to insurance institutions.performanceThe income assessment requirements during the assessment year are inconsistent, but there is no preferential policy at the national level for insurance capital to participate in green investment, resulting in insufficient incentives for insurance and insurance asset management companies.
In terms of green investment information, compared with other countries, my country’s existing data and information are insufficient, especially the lack of quantitative and comparability, which weakens the reference of the database for green investment of insurance funds to a certain extent. In addition, the current information sharing mechanism among various government departments has not been fully established, there is no unified green information release and query platform and green project information database, there are problems such as information asymmetry and information fragmentation, and more institutions including insurance have been added. Costs for investors to search for and identify green projects and green bonds.
Incentives proposed
In response to the current “pain points” of insurance funds in green investment, Zhou Yanfang suggested that efforts should be made to introduce relevant incentive measures and build industry standards and data platforms to further promote the participation of insurance funds in green investment.
Specifically, in terms of incentive measures, Zhou Yanfang believes that we can start from two aspects: reducing capital occupation and increasing tax incentives.
In her proposal, she said that under the background of “dual carbon”, emerging high-quality green assets often face the problem of higher valuation. As long-term value investors, insurance institutions tend to be more cautious when allocating relevant assets. It is suggested that for green investment, especially green equity investment, there should be policy encouragement in setting the capital occupation coefficient. For example, under the C-ROSS system, by setting the characteristic coefficient of green investment regulation, for insurance companies that account for more than a certain proportion of green equity investment, the insurance company’s equity capital occupation factor will be adjusted in a differentiated way, so that it can increase green investment. Maintain stable solvency when support is strong.
The investment cost is also one of the factors restricting insurance capital to increase green investment. Taking the current major direction of green investment – green bonds as an example, central bank data shows that by the end of November 2021, the cumulative issuance of green bonds exceeded 1.6 trillion yuan. However, in terms of its investment cost, Zhou Yanfang said that green bonds have additional requirements for external certification and auditing, continuous information disclosure, etc., and their comprehensive costs are relatively high. She suggested that, with reference to international advanced experience, certain tax policy preferences can be given to all institutional investors, including insurance institutions, in green bonds and related creditor’s rights projects.
For example, the EU mandates greencreditandsecuritiesChemical products can enjoy tax incentives, the Dutch government in 2012 was greenfundInvestors are offered a 0.7% capital gains tax deduction (from 1.2% to 0.5%), and green municipal bonds in the US can exempt investors from interest tax. Preferential tax policies can improve the after-tax income of green assets, encourage institutional investors to increase their allocation, and help reduce the financing cost of green projects and facilitate the green transformation of the economy.
As for the infrastructure construction of green investment, Zhou Yanfang suggested establishing relevant standards for green enterprises and a public green investment and financing data platform, improving green rating and certification, strengthening information disclosure, and breaking the bottleneck of green investment and financing caused by information asymmetry.
In addition, Zhou Yanfang also suggested that we can actively explore the formulation of responsible investment principles for insurance funds and green investment evaluation standards, in terms of the contribution requirements of investment targets to environmental protection, low carbon, and recycling, and the holding requirements and holding ratios of green investment products. Make specific regulations and form standardized green investment standards for the insurance industry.
(Article source: First Finance and Economics)