Challenges and hopes coexist on the road to green finance

Ti Gong

The nation's first report on the sustainable development of green finance in the Yangtze River Delta region was released on Thursday, with existing problems revealed and corresponding strategies presented.

The release came at the second joint meeting of Banking Associations in the Yangtze River Delta Region, the first of which was held last June.

The report shows the challenges facing green finance in the region's banking industry, including the lack of unified standards for ESG (environmental, social and governance) information disclosure by domestic financial institutions and real enterprises, an insufficient degree of international convergence, the lack of accurate and effective carbon emission data and accounting methods, and the lack of composite professionals in green finance.

According to the report, it's necessary to prevent financial institutions from greenwashing (false environmental propaganda) through regulations and enhanced ESG disclosure.

Possible solutions have been suggested, including improving the green financial system, financial institutions' supervision and information disclosure, incentive and constraint mechanisms, green financial products, and market system, intensifying international cooperation.

At the 2016 G20 Hangzhou Summit, China included green finance as an important topic on its agenda for the first time, having green finance development officially written into the G20 Hangzhou Summit Communiqué.

Since then, green and sustainable development has become a distinctive feature of China's contemporary high-quality development.

By the end of this year's first quarter, the green financing balance of Shanghai's banking sector totaled 1,566.615 billion yuan (US$215.6 billion), up 9.58 percent from the beginning of the year. Among them, the balance of green credit was 1,5191.96 billion yuan, up 10.04 percent from the beginning of the year, official data showed.

Ti Gong