Shanghai promotes strong green finance goals, pushing low-carbon transformation

Shanghai on Monday issued an action plan on promoting green finance, to push ahead the overall green and low-carbon transformation of economy and society.

The action plan sets the goals that by 2025, Shanghai's banking and insurance industry will basically build a green finance ecological service system that is compatible with the carbon peak.

Efforts will also be made to cultivate enhanced green finance service institutions, and form a number of green finance industry benchmarks.

Meanwhile, the effectiveness of green finance comprehensive services will be continuously improved. The balance of green financing is expected to exceed 1.5 trillion yuan (US$221 billion), while green insurance will see its coverage significantly expanded with a targeted insurance coverage amount of over 1.5 trillion yuan.

Green bonds, funds, trusts, capital management, leasing and other green businesses are also aimed to develop steadily.

The innovation ability of green finance will be enhanced continuously with green financial products and derivatives being continuously enriched, and a replicable and extensible Shanghai scheme of green finance will be formed, according to the plan.

To help form an international first-class development environment for green finance in Shanghai, the city is to give full play to the advantages of the Pudong New Area as a pioneering zone of Socialist modernization.

It will promote the convergence of green finance standards at home and abroad, help improve the city's services as an international financial center, support the development of the Yangtze River Delta Integrated Ecological and Green Development Demonstration Zone, and promote the construction of a national pilot green finance reform zone in Shanghai.

Specifically, the action plan put forward 30 key tasks in eight various aspects, namely, the active deployment of green finance development strategy, optimizing green finance promotion mechanism, services for green development in key areas, boosting innovation, exploring green finance cooperation models, continuous improvement of risk management systems, construction of green finance standards system, and creating a good external environment for green finance development.

For instance, on ESG, or environmental, social and governance, it is to build and optimize an ESG risk management system, encouraging banks and insurance institutions to include ESG risks into their comprehensive risk management systems and administrative processes.

It also suggests establishing an ESG information disclosure mechanism that is in line with international standards. Each banking and insurance institution should take the initiative to disclose its own green finance strategy and policy, fully disclosing the development of green finance through channels such as annual reports, ESG reports and official websites, and establish a system for responding to complaints about relevant major risk events.