People’s Bank of China sets priorities for green finance

December 16, 2020|Written by GCB News|People's Bank of China

Yi Gang, Governor of the People’s Bank of China (PBoC), outlined four priorities for the bank in support of China’s ambition to achieve carbon neutrality by 2060, announced in September.

In a speech delivered by video to the Singapore FinTech Festival, Governor Yi said that the PBoC will work to improve green finance standards and open China’s green-finance market to international investors. The bank will also “enhance capacity” for analysing and managing environmental and climate risk, and will consider introducing mandatory environment-related disclosure requirements for financial institutions.

Governor Yi also reviewed China’s progress in supporting green finance. The bank is improving its policy framework for green finance and is updating its green bonds taxonomy, with the new taxonomy “expected to remove projects related to fossil fuel production and consumption,” said Yi. A draft version of the new taxonomy released in June, 2020, specifically excludes coal and does not mention natural gas, while adding hydrogen, sustainable agriculture and green consumer finance.

The PBoC is encouraging innovation in green finance products, including green credit, green bonds, green agricultural insurance, clean energy insurance, and green trusts, and has also launched pilot programs for green finance reforms and innovation in 9 cities.

Governor Yi also spoke of China’s leadership role in international cooperation on green finance and green central banking, pointing to the establishment of the G20 Green Finance Study Group under the 2016 Chinese presidency and to the PBoC’s founding membership in both the Network for Greening the Financial System and the International Platform on Sustainable Finance.

This page was last updated April 23, 2021

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