Abstract:

Within the last few years, China has transformed from a late-comer into a global leader in the field of green finance and has become the first country in the world to establish a comprehensive policy framework and market for green finance.

This paper summarizes salient issues and key drivers in scaling up green finance, and China’s experience in leading the global development of green finance in five parts: (1) The definition of green finance and the role it plays in achieving the sustainable development goals. (2) China’s experience in scaling up domestic green financial market, including creating one of the world’s largest green bond markets, introducing various green financial products and innovative incentive mechanisms, launching compulsory environmental information disclosure requirement for listed companies, and requiring financial institutions to conduct environmental risk analysis. (3) The impetus and favorable conditions for green finance in China, including political support, strong public desire for a better environment, and active participation of financial institutes and professionals. (4) China’s role in leading global cooperation on green finance development through the G20, the Central Bank and Supervisors’ Network for Greening the Financial System (NGFS), and other bilateral cooperation mechanisms. (5) Recent initiatives and progress in green finance developments, including efforts in greening the investments along the Belt & Road, capacity building, as well as researches on the risk weights of green assets and the transmission channels of climate risks onto the financial system.

Full Text (PDF): China as a Global Leader in Green Finance