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China to require financial institutions to move towards green finance

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China to require financial institutions to move towards green finance

© Reuters. China Development Forum in Beijing

BOAO, China (Reuters) -China will require financial institutions to transition towards green finance as early as possible, to help achieve the country’s carbon neutrality goals, central bank governor Yi Gang told the Boao Forum on Tuesday. China’s President Xi Jinping has promised to bring the country’s 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. “We will urge financial institutions to make transitions as early as possible,” Yi said. The central bank will give incentives to financial institutions to support such transitions and will unveil new tools to boost financing for carbon emission cuts, Yi said. The central bank will also increase its support for green finance through ratings of commercial banks, deposit insurance rates and macro prudential assessments, he said. The central bank will assess the impact of climate change on China’s financial stability and monetary policy, and consider climate change in financial sector stress tests, he said. China will continue to increase the allocation of green bonds in its foreign exchange reserve investments while controlling investments in high-pollution assets, Yi said. Yi said China is drafting green finance standards and is trying to unveil them this year to make it easier for foreign investors to enter the green finance market.
There are still problems in China’s green finance development, such as inadequate environmental information disclosures by some companies, he said. China will expand financial sector opening and expand business scopes for foreign financial institutions, Yi added.
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