China thrives for a green future: Connecting the dots between environmentalism and capitalism.

Growing a Green Bonds Market in China demonstrates:

Reducing costs and increasing capacity for green investment while promoting greater transparency and stability in financial markets.

On a macro level, the Chinese government appears committed to raising ESG standards for various reasons.

1. Maintain the existing and attracting foreign investors

Foremost, China’s manufacturing location has attracted many eligible foreign institutional investors who are well-versed in ESG investment in China.

This scenario puts explicit pressure on the Chinese government towards reform and transparency.

Beijing has opened up its equity targeting a large green bond market.

• China released green bonds worth $1 billion in 2015.
• China’s green bond issuance had crossed US$31 billion by 2019.

2. Sustainability enters china’s five-year plan.

China is planning to launch the world’s most extensive national carbon trading program to reduce the country’s annual carbon emissions.

• The sector is also incorporating sustainable natural materials, water quality, and CO2 reductions.
• This initiative is also the state’s aggressive promotion of green energy and electric vehicles through subsidies.

• China’s Belt and Road Initiative (BRI), a major global initiative inspired by the ancient Silk Road aimed at enhancing interconnectivity between countries.
• It aims to improve trade and economic development while also alleviating poverty.

Companies are providing various forms of green credit, green insurance and green loans to extend their ESG product line to gain a share of this vast addressable market.

Environmental pollution liability insurance is commonly referred to as “green insurance.” Green insurance has several features, including environmental security and social relations stabilization.

Insurance is critical to the advancement of an ecological society. The government has introduced mandatory environmental pollution liability insurance (CEPLI).  Companies and other industries that are required to purchase CEPLI should engage in:

• Hazardous waste
• Tailing reservoirs
• Petroleum products
• Coal mines and metal ores
• Chemical raw materials and chemical products

Green credits such as loans to projects offering energy savings or emission reductions now make up roughly 10 per cent of the portfolios of China’s top 21 banks.

When it comes to green finance, green bonds have possibly seen the most activity in China.

• In 2018

Solar, wind, and other renewable energy ventures received approximately 28% of China’s green bond proceeds. Low-carbon transportation received roughly 33% of the funding, including for urban mass transit.

The Chinese government approved three sustainable development zones earlier this year, which will help achieve the United Nations’ 2030 Sustainable Development Goals.

• Shenzhen

To address limited resource environmental bearing and social management problems, Shenzhen combines innovations in water treatment, waste utilization, ecological regeneration, and artificial intelligence.

• Guilin

The zone is responsible for making developments and accumulates replicable experiences for southwestern multi-ethnic areas. The focus is on ecologically vulnerable regions and karst desertification and environmental protection.

• Taiyuan

Taiyuan’s primary sustainable tasks involve the comprehensive management and control of water and gas. Plus, the manufacture of high-quality recycled water, the water transfer and distribution project using the heating pipeline network.

We need to transform challenges into opportunities and successfully forge ahead in the face of an uncertain future through sustainable development.