Shanghai accelerates building of international green finance hub
Green finance is increasingly being emphasized in China, reflecting the country's commitment to reducing its carbon footprint and promoting sustainable development.
With the aid of a newly-established service platform, the network of Shanghai's green financial industry is expanding, as green finance has been an organic part of Shanghai's urban development.
Green finance has gained traction when the financial sector takes environmental protection as a basic guideline, considering potential environmental impacts in investment and financing decisions, promoting the sustainable development of society with environment protection and pollution treatment.
As an important component for the construction of an international green financial hub, the Shanghai Green Financial Service Platform was officially launched on January 11, 2024, under the construction and operation of the Shanghai United Credit Information Co.
Within approximately two months, the platform has so far accessed 22 financial institutions, declared 20 green projects and released 48 financial products.
The platform aims to provide high-quality green financial products and services to solve many practical problems in the development of green finance in Shanghai, such as how to identify green products and how to carry out financing.
Being market-oriented, the platform will also ensure the sustainability of the platform through a market-based approach to ensure its sustainable and efficient operation.
The platform provides five major services, including green information services, green financial services, green industry enterprise identification services, green project identification services, and intelligent early warning and statistical analysis services, according to Chen Lianggui, general manager of the Shanghai United Credit Information Co.
"It provides "one-stop" green financial services for market players, financial institutions and government departments, solves the gap of green information between the government, banks and enterprises, reducing the cost of financing corporation between enterprises and financial institutions," said Chen.
Two subsidiaries of Wusheng (Shanghai) Energy Technology Co had energy management projects listed on the green platform, seeking financing opportunities.
Through the platform, the bank noticed their financing needs, and successfully claimed the project with quick credit approval, according to Zhou Buxin, general manager of the strategic client department of the Industrial Bank, Shanghai branch.
"It was difficult for a bank to obtain this type of project before, because it was the account managers' job to coordinate, which usually ended in vain. Through this platform, the basic information of projects is clear to see, making the preliminary examination much easier," Zhou said.
Shanghai's major financial institutions also participate in the construction of a green financial "ecosystem" through their own product innovation.
The Bank of Communications has been actively taking initiatives to promote and apply the concept of green finance.
Fan Chen, general manager of the credit management department of the Bank of Communications, said that BOCOM has carried out a number of innovations around the carbon emissions reduction business, including the release of the country's first carbon credit report financing loan and carrying out the Yangtze River Delta region's first carbon quota pledge financing.
BOCOM took the initiative to participate in the preparation of the "Shanghai Transformation Finance Catalog (Trial)", which specifies the ways of transformation and carbon reduction targets for 19 categories of subjects such as ocean-going, coastal, inland waterways, and ports.
"At present, we have taken the lead in implementing the first domestic transformation financial loan for the water transportation industry," Fan said.
The building of Shanghai's international green financial hub also involves financial institutions other than the traditional financial institutions such as banks.
In order to help the construction, innovation and promotion of the green financial services platform, seven financial leasing enterprises are about to be stationed on the platform and release products.
"Financial leasing enterprises are the carrier of the combination of industry and financing. In the future,they can act as both the funding provider of green projects and the demand side of funds on the platform,"said Gao Yixiang, deputy secretary-general of the Shanghai Rental Trade Association (SRTA).
In December 2022, an action program of the Shanghai banking and insurance industry for green finance and carbon neutral strategy was jointly issued by the Shanghai Development and Reform Commission and another eight government departments.
The program set the goal of building a green financial ecological service system by 2025, expecting to exceed 1.5 trillion yuan ($US208 billion) in both the balance of green financing and the amount of green insurance coverage.
As of the end of 2023, Shanghai had achieved breakthroughs in five major financial areas, including the balance of inclusive small and micro loans, the balance of loans to science and technology-based enterprises, and the balance of green financing, with all indicators exceeding 1 trillion yuan for the first time, according to official data.
