The second market in the world for sustainable finance aims at global primacy and to do so it will from now on rely on the planning policies of the Central Bank which will coordinate tools and institutions to obtain the result for the benefit of the growth of the real economy, thanks also cutting CO2 emissions. The Chinese market is characterized by a multiplicity of interventions at various levels which, however, will have to be coordinated to make China the leader in green finance.
The Governor and green politics
Yi Gang spoke in mid-April on the occasion of an important Forum organized with the Monetary Fund dedicated to the topic of green finance. The concept of introducing climate risk assessment into the Central Institute’s structural policies is now a fact. The Bank had already taken action at the end of 2020 by issuing guidelines for green finance. At the base, the guidelines issued by the Ministry of the Environment on the criteria for cutting emissions in some sectors at higher risk. The objectives of the Central Institute are also linked to the results achieved at the end of 2020: 1.8 trillion dollars of loans and 125 billion dollars of green bonds totaled at the end of 2020.
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More than 40 carbon neutral bonds
Over 40 carbon neutral bonds have so far been issued on the market for a total value of over $ 10 billion. The confirmation of the new policy decided at central level comes from Sun Guofeng, head of the monetary policy department of the Central Bank, who confirmed the introduction of a mechanism capable of including climate risk in the Bank’s macroprudential monetary policies. Always with a view to real growth, of course, as premier Li Keqiang highlighted in his Work report.
Too broad a series of interventions
Currently in China there are rainy and poorly coordinated interventions ranging from support by the China Securities Regulatory Commission (CSRC) to mergers and acquisitions that have a green content, to the disclosure of green information (in 2019 there were 1,452 listed companies) to the construction of a real and functional futures market on the global market. A virtuous circle parallel to the adaptation or overcoming of polluting companies that is not at all easy to achieve to honor the commitment of China’s neutrality by 2060. In April, the Shanghai Stock Exchange launched the first equity carbon neutrality equity index and even wealth management has launched on the green market. All this while Beijing is trying to create a futures market that can serve as a goad for companies to go greener to offer new financial resources which in turn can reward companies seeking finance.