Text / Reporter Ma Jun
The history of green finance can be traced back to the 60s of the 20th century, when the world began to pay attention to environmental issues and sustainable development. With the increasing severity of environmental problems, people are gradually recognizing the important role of financial capital in promoting environmental protection and sustainable development. Green finance came into being, aiming to guide the flow of financial capital to projects in the fields of environmental protection, energy conservation, clean energy, green transportation, and green buildings.
In the development of green finance, some important milestones deserve attention. For example, in 2002, the United Nations Environment Programme (UNEP) and the Financial Stability Board (FSB) jointly launched the Equator Principles, a set of voluntary financial industry guidelines to assess and manage environmental and social risks in project financing. The implementation of the Equator Principles marks the beginning of the recognition and promotion of green finance on an international scale. In addition, some governments and international organizations are also actively promoting the development of green finance. For example, in 2015, the Chinese government issued the Overall Plan for the Reform of the Ecological Civilization System, which clearly proposes to develop green finance and promote the development of green industries and the construction of ecological civilization. In 2016, seven departments, including the People's Bank of China, the Ministry of Finance, the National Development and Reform Commission, the Ministry of Environmental Protection and the China Securities Regulatory Commission, jointly issued the Guiding Opinions on Building a Green Financial System, further clarifying the definition and development goals of green finance.
With the continuous development of green finance, more and more financial institutions have begun to get involved in the green finance market. For example, financial products such as green bonds, green credit, and green funds are emerging to provide financial support for environmental protection and sustainable development projects. At the same time, green finance has gradually become a key area of international cooperation, and governments and financial institutions have strengthened cooperation to jointly promote the development of global green finance.
Green development requires strengthened international cooperation
Qin Baobo, a member of the preparatory group of the Carbon Neutrality Special Committee of the Tsinghua Alumni Association and executive director of the High-quality Development and Low-Carbon Economy Research Center of the Yangtze River Delta Research Institute of Tsinghua University in Zhejiang, said that on January 9, the Wall Street Journal published a signed article: The Latest Dirty Word in Corporate America: ESG, which directly addresses the ESG controversy currently facing the United States. Although this article did not cause much impact in the United States, it caused a great sensation in China, and self-media articles have interpreted that the United States no longer makes ESG green-related investments, which is not the case. Behind these debates, there is a key factor influencing the development of green finance, and that is carbon emission data. At present, many companies claim to have achieved carbon neutrality through "greenwashing", but there is no corresponding standards and data to support them, and these actions have not played a leading and promoting role in the development of carbon neutrality, but have caused negative emotions in society, which is also the starting point of Europe in prohibiting enterprises from using "carbon neutrality" as a corporate label at will. However, this is not to deny carbon neutrality and green development, but to promote development through norms.
Qin Baobo, member of the preparatory group of the Carbon Neutrality Special Committee of the Tsinghua Alumni Association and executive director of the High-quality Development and Low-carbon Economy Research Center of the Yangtze River Delta Research Institute of Tsinghua University, Zhejiang: The establishment of a healthy and effective green financial service market through an effective carbon market is the guarantee for the full play of new quality productivity, and it is also the starting point and guarantee for us to establish effective cooperation with the international market. This requires the government to lead and consolidate the underlying foundation needed for market development, and also requires more enterprises to participate, establish standards, develop technologies, and coordinate practice.
It is understood that the World Wide Fund for Nature (WWF), the World Resources Institute, Carbon Disclosure Proiect, and the United Nations Compact have jointly launched the "Science Based Targets" action that has contacted thousands of companies accounting for 1/3 of the market value of listed companies in the world to jointly establish industry carbon emission reduction paths and standards, so as to promote enterprises to standardize the release of carbon data related information. If the core enterprises of the industrial chain play an active role in it, the carbon emission standard will be easily promoted to more fields and industries. On this basis, there will be a clear and reliable starting point for green finance, and the pricing and services of many financial products will be twice the result with half the effort.
Green development is a global common responsibility and goal, which requires the coordination of global governments, enterprises and public welfare organizations, especially in terms of standards, more standards will not help the realization of green goals, so our domestic relevant organizations should be more actively involved in international cooperation, and promote the implementation of relevant standards in China.
The development status of green finance in mainland China
In 2021, the People's Bank of China (PBoC) issued the Green Finance Performance Evaluation Plan for Banking Depository Financial Institutions, which included green financing and environmental disclosure in the performance appraisal, further enhancing the enthusiasm and initiative of financial institutions in developing green finance innovation. In addition, since the launch of the national carbon market, financial institutions have carried out extensive innovation in carbon financial products, continuously launched various carbon emission allowance offset financing tools, strengthened the linkage between the financial market and the carbon market, and improved the role of financial business innovation in promoting carbon pricing.
Wang Wen, executive dean of the Chongyang Institute for Financial Studies of Chinese University, researcher of the Financial Research Center of the Counsellors' Office of the State Council, and secretary-general of the Green Finance Committee of the China Society for Finance and Banking, believes that the policy support for green finance to support the "dual carbon" goal has increased unprecedentedly. At the beginning of 2021, the People's Bank of China (PBOC) included "implementing major decisions and arrangements for carbon peak and carbon neutrality, and improving the policy framework and incentive mechanism for green finance" into its ten key tasks for 2021, actively guiding green financial services for the development of a low-carbon economy in the 21st century. In April, the Catalogue of Green Bond-Backed Projects (2021 Edition) was officially released, removing the categories of projects involving the production and clean utilization of fossil fuels such as coal, and adding green projects for carbon dioxide capture, utilization and storage, so as to better serve the financing needs of the "dual carbon" goal. In November, the People's Bank of China (PBOC) officially launched a carbon emission reduction support tool to guide financial institutions to provide carbon emission reduction loans to enterprises in key areas of carbon emission reduction, which greatly improved the accuracy and directness of capital investment to the "dual carbon" goal.
Wang Wen, Executive Dean of the Chongyang Institute for Financial Studies, Renmin University of Chinese, Researcher of the Financial Research Center of the Counsellors' Office of the State Council, and Secretary-General of the Green Finance Committee of the China Society for Finance and Banking: At present, the green development path of the mainland has become one of the main themes of economic and social development in the coming decades. Statistics show that China needs to invest 150 trillion to 300 trillion yuan to achieve carbon peak and carbon neutrality, which means that the mainland needs to invest 3.75 trillion to 7.5 trillion yuan every year. In this context, the importance of green finance is becoming more and more prominent, and it can even be called an important engine for the sustainable development of the mainland financial industry in the future and a key bloodline for the transformation and upgrading of the industry.
Tian Kun, general manager of the research department of Baihang Credit Information Co., Ltd., said that in recent years, the construction of personal carbon accounts has been in the ascendant. The mainland's "dual carbon" strategic goal has been continuously promoted, and positive results have been achieved in the green and low-carbon transformation of the industry. According to the results of a 2021 study by the Chinese Academy of Sciences, the production side accounts for 47% of China's total carbon emissions, the consumption side accounts for 53%, and personal consumption accounts for more than half of the mainland's total carbon emissions. Individual low-carbon emission reduction behaviors are becoming more and more important, and personal carbon accounts have emerged to record, calculate, and incentivize individual green behaviors.
Tian Kun, General Manager of the Research Department of Baihang Credit Information Co., Ltd.: The "2024 Government Work Report of the State Council" lists "strengthening the construction of ecological civilization and promoting green and low-carbon development" as one of the key tasks of the government in 2024. The construction of the personal carbon account platform will further encourage individual green emission reduction behaviors, enhance the awareness of conservation, environmental protection and ecology of the whole people, build a green and low-carbon lifestyle, promote the practice of green concepts by the whole people, and help the realization of the national "double carbon" strategic goal.
Wang Wen said that the scale of green credit and green bonds in mainland China has been further expanded. At present, the scale of green credit ranks first in the world. According to data provided by the central bank, as of the end of 2023, the balance of green loans in local and foreign currencies in China was 30.08 trillion yuan, a year-on-year increase of 36.5%, 26.4 percentage points higher than the growth rate of various loans, and an increase of 8.48 trillion yuan from the beginning of the year. Among them, the loans to projects with direct and indirect carbon emission reduction benefits were 10.43 trillion yuan and 9.81 trillion yuan respectively, accounting for 67.3% of the total green loans, indicating that with the work related to the "dual carbon" goal officially entering the fast lane, the support of green finance for low-carbon emission reduction has been improved by leaps and bounds.
Tian Kun said that the construction path of the personal carbon account sharing platform can adopt a distributed architecture. It is understood that at present, personal carbon accounts are scattered in the government, financial institutions and Internet platforms, etc., and there is indeed a need to help individuals query the carbon account data under each subject in one stop. Cross-industry and cross-regional personal carbon account data sharing will help reduce duplication of construction, strengthen standardization, attract more institutions to build personal carbon account systems, and encourage individual green and low-carbon behaviors. Relying on distributed technology to share personal carbon account data, one-stop aggregation of personal carbon account data can be realized only when the individual authorizes the query without leaving the database, and at the same time meets the requirements of information security and personal information protection.
Boost the digital economy with "green computing power".
In the process of promoting green finance and digital transformation, data centers have become key infrastructure for implementation, and they are also an important measure to achieve the "dual carbon" strategy. Building green, secure, and efficient data centers has become an important starting point for the financial industry. This is not only the only way for the financial industry to fulfill its social and political responsibilities, but also for the sustainable development of its own business.
Wang Kefeng, deputy general manager of the government and enterprise customer department of China Mobile Communications Group Inner Mongolia Co., Ltd., believes that the low-carbon data center of smart computing power is of vital significance to help financial enterprises implement the "dual carbon" strategy. As one of the eight major computing power hub nodes in the country, Inner Mongolia has natural comprehensive advantages in location, climate, land use, and green power in the development of the computing power industry, which can not only effectively undertake the computing power needs of Beijing-Tianjin-Hebei, Yangtze River Delta and other regions, but also have sufficient green energy to support the sustainable development of data centers and strongly support the implementation of the "Eastern Data and Western Computing" project. As one of the three major operators, China Mobile has the advantage of cloud-network integration services, and Hohhot is a national Internet backbone direct connection point, with direct connections to 18 major cities in China, and the latency of mutual visits between networks is excellent. At present, more than 100 industry customers such as party and government, finance, and Internet inside and outside the province have settled in the park, including China Mobile Group's three clouds serving global mobile customers, and computing power applications in the fields of cloud design, cloud gaming, and cloud rendering have also been implemented in the past year. At present, in terms of scale, capacity and experience, it can effectively undertake the computing power needs of Beijing-Tianjin-Hebei, the Yangtze River Delta and even the whole country.
Wang Kefeng, Deputy General Manager of the Government and Enterprise Customer Department of China Mobile Communications Group Inner Mongolia Co., Ltd.: The average annual growth rate of computing power in mainland China in the past five years has exceeded 30%, ranking second in the world in terms of computing power scale. As one of the eight major computing power hub nodes in the country, Inner Mongolia has natural comprehensive advantages in location, climate, land use, and green power in the development of the computing power industry, which can not only effectively undertake the computing power needs of Beijing-Tianjin-Hebei, Yangtze River Delta and other regions, but also have sufficient green energy to support the sustainable development of data centers and strongly support the implementation of the "Eastern Data and Western Computing" project.
To this end, the Inner Mongolia company has built an integrated computing service center based on mobile cloud to serve the industry market such as design and XR. At the bottom of the platform, the resource capabilities of the mobile cloud and the computing power of heterogeneous GPUs are integrated to meet the computing power requirements of different scenarios. In the middle layer, according to the design idea of the computing network brain, the capabilities of intent perception, demand analysis, and computing power orchestration and scheduling are gradually built, and these capabilities and basic computing power are encapsulated into different business platforms to serve different industries. At the top level, various applications have been introduced for the subdivisions of different industries to provide professional services. Relying on the industrial supporting policies and service support of the Inner Mongolia computing power cluster, it has continuously improved its capabilities and expanded its scale in terms of computing network capabilities, computing network applications, and industrial ecology. Based on computing power + AI + big data and other capabilities, we will launch more digital intelligence applications such as AI training, telecom ChatGPT, and industry large models, empowering thousands of industries. Finally, China Mobile's Hohhot data center will be built into a northern intelligent computing center, with "cloud rendering, cloud video, cloud gaming, and AIGC" as the computing power nameplate to promote the implementation of the computing industry application ecology.
All parties work together to do a good job in green finance
Zhou Xiao, general manager of the corporate business department of Minsheng Bank, said that the first thing is to maintain the same frequency resonance strategically. Both banking institutions and non-bank financial institutions should deepen their strategic, overall and long-term research and understanding of green development, resolutely implement the national green development strategy, actively fulfill their social responsibilities, actively integrate into the overall economic and social development, and insist on creating value for customers. The second is to weave a multi-dimensional product system. Financial institutions can focus on green development areas such as clean energy, energy conservation and emission reduction, low-carbon technology, and carbon rights trading, strengthen mother-child collaboration within the group, and strengthen cooperation with external financial peers to jointly build a complete green financial product system. Third, it is necessary to deepen the comprehensive services of subdivided industries. On the basis of the green financial product system, financial institutions can strengthen the comprehensive services for the in-depth dimension of subdivided industries, formulate comprehensive solutions for the green development of the industry according to the characteristics, pain points and blocking points of these subdivided industries, and integrate the use of such settlement, credit, bonds, supply chain, equity, funds, securitization and other means to actively contribute to the low-carbon transformation of high-carbon industries and the green development of emerging industries. Fourth, it should be extended to the industrial ecosystem. By deepening cooperation with core enterprises, we will build an integrated service system for large, medium, small and micro enterprises, and comprehensively use financial technology to build a mutually beneficial and win-win green ecosystem with customers in the upstream and downstream of the industrial chain. Fifth, we should carry out innovative exploration in carbon finance. The day-to-day operation of the carbon market should be implemented through the infrastructure system, and this is inseparable from the support of the settlement bank, which can ensure the smooth progress of the carbon market inquiry, trading and performance through professional and efficient capital settlement services.
Zhou Xiao, General Manager of the Corporate Business Department of Minsheng Bank: Green finance is an important support for ensuring national energy security, a solid backing for achieving the mainland's dual carbon goals, an important way to deepen the structural reform of the financial supply side, and one of the core driving forces for the transformation and development of financial institutions. By the end of the third quarter of 2023, the bank's green credit scale exceeded 250 billion yuan, an increase of 39% from the beginning of the year, and the growth rate should be said to have remained at the forefront of comparable peers for three consecutive years, and it has widely served member enterprises in the national carbon market.
Wang Wen said that the financial industry is the grain and grass of the "'dual carbon' war", and has played an important role in the "double carbon" work, such as capital supply, liquidity support, risk management, and value realization. First, it is necessary to continuously improve the compatibility of the financial industry with the "dual carbon" goal. In the new era, China's ecological civilization construction, green and sustainable development and climate change response will bring hundreds of billions of yuan in capital needs, which will require disruptive reforms in the financial industry to meet them. Second, the financial industry should strengthen business support for the construction and innovation of the national carbon market. Carbon emission rights and carbon pricing have the most direct regulatory role in the total carbon emission control and carbon emission reduction target arrangement under the "dual carbon" goal, and are inseparable from the innovation linkage of the financial industry. Third, the financial industry has the advantage of obtaining information and data, and should actively undertake the information disclosure and database construction under the "dual carbon" goal. In the process of green project approval, strengthen the carbon accounting, carbon verification, environmental information collection and disclosure of enterprises, from the direct and indirect energy consumption, related pollution emissions to carry out environmental statistical disclosure of business activities, comprehensive reference to the carbon accounting financial partnership (PCAF) and climate-related financial information disclosure task force (TCFD) to carry out model innovation, according to the lender and the loan project industry characteristics, loan amount and other comprehensive calculation of credit and project carbon footprint, and finally establish a carbon footprint, The comprehensive database of environmental disclosure and financial information provides basic data support for the calculation of the economic benefits of carbon emission reduction and the construction of the financial system for enterprise transformation.
In conclusion, the history of green finance is a process of continuous evolution and progress. From the initial exploration and practice, to the current global wide recognition and promotion, green finance has become an important force to promote environmental protection and sustainable development. In the future, with the intensification of global environmental problems and the continuous advancement of sustainable development goals, green finance will continue to play an important role and make greater contributions to building a sustainable future.
(This article was published in the first half of April 2024)