On April 20, Yi Gang, President of the people's Bank of China, attended the round table meeting of "financial support for carbon neutral" at the 2021 annual meeting of Boao Forum for Asia and gave a keynote speech, detailing how to better mobilize funds to support low-carbon transformation, how to manage financial risks caused by climate change, and how international coordination and cooperation, especially G20 and other platforms, can play an important role.
Yi Gang pointed out that under the correct leadership of the Party Central Committee and the State Council, the people's Bank of China, together with relevant departments, has continuously improved the top-level design of green finance, mainly carrying out the following work:
First, promote capital flow into green industries and fields. The first is to improve the standard system of green finance. In 2015 and 2018, the people's Bank of China formulated the standards for green bonds and green credit respectively, and will soon complete the revision of the catalogue of green bond support projects and delete the contents related to fossil energy. The second is to strengthen information reporting and disclosure. At present, financial institutions need to disclose the green financial bonds in the inter-bank market and report the use and investment of green credit funds. In the future, compulsory information disclosure system will be established step by step to cover all kinds of financial institutions and financing entities and unify the disclosure standards. Third, build incentive mechanism. At present, green bonds and green loans have been included in the scope of qualified collateral for central bank loan facilities, and carbon emission reduction support tools will be created to encourage financial institutions to provide financial support for carbon emission reduction. The people's Bank of China will also increase its support for green finance and carbon emission reduction through commercial bank rating, deposit insurance rate, macro Prudential assessment and other channels.
Second, promote cross-border green capital flow. On the one hand, the central bank will formulate a common classification standard for green finance as soon as possible. At present, we are working with the European Union to promote the international convergence of green classification standards, and strive to issue a set of common classification standards within this year for international investors' reference, so as to promote the coordinated development of international green finance. On the other hand, it will continue to open up the financial industry to facilitate international investors to participate in China's green financial market. On the basis of the full implementation of the pre entry national treatment plus negative list management system, we will continue to expand the business scope of foreign-funded financial institutions, expand the two-way opening of the capital market, and enhance the attraction of China's green financial market to international investors.
In terms of managing climate related financial risks, Yi Gang said that compared with developed countries, China and other Asian developing countries are still in the process of industrialization and urbanization. At present, the time from carbon peak to carbon neutralization announced by China is much shorter than that announced by developed regions in Europe and the United States, and the slope of carbon neutralization curve is steeper. "Therefore, we need to make more efforts to deal with it in advance, and also urge financial institutions to transform as soon as possible." He stressed.
Yi Gang said that at the central bank level, it will timely assess the impact of climate change on financial stability and monetary policy. "We are looking at systematically taking climate change into account in stress testing of financial institutions. We will continue to increase the allocation of green bonds in our foreign exchange reserves, control investment in high-carbon assets, and incorporate climate factors into the investment risk management framework. " In addition, at the level of financial institutions, financial institutions will be encouraged to make early preparations to actively respond to climate challenges. The people's Bank of China has guided the pilot financial institutions to measure the carbon emissions of the project, assess the climate and environmental risks of the project, is exploring the establishment of a national carbon accounting system, has evaluated the green credit of banks on a quarterly basis, and is studying the performance evaluation system for green credit and green bonds of financial institutions.
