Singapore, 16 November 2017
China has firmly established itself as a global leader on green finance, with both domestic policies and international leadership bringing real progress, but its needs to overcome some serious challenges to unlock its full potential, new research released today said.
Establishing China’s Green Financial System: Progress Report, coauthored by the International Institute of Green Finance (IIGF) of the Central University of Finance and Economics (CUFE), and UN Environment’s Inquiry into the Design of a Sustainable Financial System, reviews China’s development in green finance, and offers recommendations for future development.
“Green finance is essential to realizing China’s national strategic objectives in green development and ecological civilization,” said Wang Yao, Professor and Director-General at the IIGF. “Through approaches in practicing green credit, green bonds, green insurance and industrial funds, as well as implementation at local levels, China’s green finance development has contributed significantly to social and economic structural reforms and gained widespread recognition internationally.”
To finance climate action and sustainability, trillions of dollars need to be deployed each year, much of which will have to come from the world’s financial and capital markets. This is particularly important for China. The rapid growth of the world’s second-largest economy has brought health and environmental problems, something the country’s leaders have acknowledged.
Speaking at the recent 19th National Congress of the Communist Party of China, President Xi Jinping said that the construction of “ecological civilization” and the maintenance of ecological security are the keys to China achieving stable and sustainable development.
The report finds that China, which put green finance on the G20 agenda during its 2016 presidency, is following through on its political commitment to boost the financing required to do this. The report looks particularly at progress since the State Council in August 2016 approved a set of recommendations for action on greening China’s financial system.
The report identifies many specific advances, including:
“China has made huge strides through government leadership to create a domestic green finance market, and has inspired many other countries in developing a green finance policy roadmap,” said Dr. Ma Jun, Chairman of China's Green Finance Committee and Special Advisor to UN Environment on Sustainable Finance. “However, to keep this momentum going, China still needs to overcome some challenges. The green finance progress report pinpoints where the work needs to be done for China to establish a fully functioning green financial system.”
The report identifies key issues that need to be addressed to move forward faster, and issues recommendations to tackle them, including:
Source: UN Environment
Illustration Photo: Solar Modules manufacturing plant in China (credits: solar giga / Flickr Creative Commons Attribution-NonCommercial-NoDerivs 2.0 Generic (CC BY-NC-ND 2.0))