"We need to establish and improve a circle of friends composed of banks, insurance, securities, trust, fund and other financial institutions. Such a more diversified, more extensive and more perfect financial service system can build a good ecological chain of green finance, climate finance and carbon finance, making business costs lower and lower, and risk management and control getting better and better." At the International Symposium on climate friendly banks held recently, Zhang Yongmiao, director of green finance center of Huaxia Bank, appealed.

On November 15, the newly released regional comprehensive economic partnership agreement (RCEP) incorporated financial and other fields into the opening clauses. The day before that, the international seminar on climate friendly banks, jointly organized by the climate investment and financing Committee of the Chinese society of Environmental Sciences, the natural resources protection association (NRDC) and China energy conservation Consulting Co., Ltd., was held in Beijing.

Green Finance: striving for climate change

The relevant person in charge of the climate investment and financing Committee of the Chinese society of Environmental Sciences pointed out that "financial institutions and investment institutions play a very important role in our response to climate change."

According to the special report on 1.5 ℃ temperature rise issued by the Intergovernmental Panel on climate change in 2018, the world needs to invest $2.4 trillion in clean energy and low-carbon projects every year in the next 15-20 years to slow down the trend of global warming. "These investment needs only rely on public funds and capital is not enough." Qian Jingjing, China Program Director of the natural resources conservation association, believes that "a large number of private capital and private funds need to be mobilized to invest in climate friendly projects."

According to Zhou Jianliang, vice president of Huzhou Bank Co., Ltd., climate investment and financing is a part of green finance. "We have reached a consensus in the process of communication with a number of financial institutions to maintain the continuous promotion of green finance and climate financing in one institution."

"It is very important for banks and insurance funds to better invest in coping with climate change. In this regard, external constraints and supervision are needed. It is an important external guidance for banks to formulate climate friendly evaluation standards and evaluation schemes." Ye Yanfei, a first-class inspector of the China Banking and Insurance Regulatory Commission, said.

Douglass Sims, director and senior consultant of the green finance center of the natural resources conservation association, pointed out that green banks supported by public capital can play a leading role in providing a green financing mechanism for global sustainable development, linking the Paris Agreement goals with the UN sustainable development goals.

Climate Investment and financing: institutional design and tool innovation

In order to strengthen in-depth exchanges and cooperation in the field of Climate Investment and financing in the future and jointly promote the development of Climate Investment and financing, the climate investment and financing Committee and the natural resources protection association signed a memorandum of understanding on cooperation at the meeting. Although China's climate investment and financing Committee has just been established for two years, it has brought together a number of institutions in the field of Finance and climate change to jointly cope with the challenge of climate change, which impressed the international experts attending the meeting.

Experts at the meeting pointed out that financial institutions should be encouraged and urged to actively make efforts to cope with climate change, and promote financial institutions to take the target of carbon peak by 2030 and carbon neutrality by 2060 into consideration of business strategy. "It should be better reflected in the daily work operation, indicator setting, and the setting of relevant policy products." Ye Yanfei said.

Some financial institutions have also begun to explore green financial products such as climate investment and financing.

Cai Yu, Deputy Secretary General of the insurance society of China, said that the insurance industry was innovating and improving insurance products and services in order to support environmental improvement, cope with climate change and promote resource conservation and efficient utilization. For example, in recent years, with the support of relevant policies, the insurance compensation mechanism for the first set of major technical equipment and the insurance compensation mechanism for the first batch of key new materials have been innovatively launched to help new equipment with outstanding energy-saving, material saving and environmental protection effects, and promote the market-oriented application of green technology. At the same time, we are increasing the use of insurance funds for green investment.

Ivan frishberg, director of influence policy at the United Bank and the United charities foundation, said the bank now uses 13% of its credit portfolio for renewable energy. The bank has established a "carbon measurement financial partnership" (PCAF) with a number of financial partners to account for the carbon emissions of their loans and investments. "At present, 84 banks and asset management companies are committed to using the PCAF carbon measurement system, covering a total assets of $16.9 trillion. The institutions involved in drafting this measurement standard include Morgan Stanley, Bank of America, Citibank, Barclays Bank, Lloyds Bank, etc

Huzhou bank is the third bank in China to adopt the equator principle. Zhou Jianliang said, "up to now, our bank's green credit accounts for 18%, and the non-performing rate is only 0.06%."

Taking Huzhou sand washing city project as an example, he introduced the green finance project of Huzhou bank. Huzhou is the largest production base of children's clothing in China, and there are about 1200 small and micro sand washing and printing and dyeing enterprises around. The local government lacks sufficient funds in the process of environmental remediation. "Huzhou bank has issued 390 million yuan loans to 89 small and micro enterprises in just two months, effectively helping the owners of the project to operate healthily."

In terms of environmental benefits, the project can reduce 100.9 tons of standard coal consumption, 177000 tons of sewage discharge, 32 tons of COD and 5.5 tons of ammonia nitrogen per year.

Risk prevention -- Establishing Green financial circle of friends

"Climate change poses a very big risk to financial stability and long-term value creation. To mitigate and adapt to the risks, the first step is to have better data and report with higher transparency." Patricia Hudson, head of global strategy at State Street, stressed the importance of risk prevention for green finance.

"The evaluation of climate friendly financial institutions needs the support and guidance of relevant departments." Sun Yikai, standing member of the climate investment and financing Committee of the Chinese society of Environmental Sciences, stressed that we should fully listen to the opinions of financial institutions and encourage them to participate actively. At the same time, we should do a good job in data collection and management, which can not do without the attention and support of stakeholders.

Source: China Environment News