September starts with a good day and China is under the spotlight of the world. The eleventh session of G20 Summit hosted in Hangzhou brought an early “golden” autumn to Yangtze River delta.
As the rotational host of 2016 G20, China included green finance into the agenda of G20 for the first time. To promote environment-friendly investment through financial instruments is a main proposal of China at G20 Summit this year. On the eve of G20, Guidance on the Construction of the Green Finance System was approved at a meeting of the leading government group for overall reform, marking an important milestone for construction of green finance system in China. Coincidentally, on September 6, sponsored by eight institutions including Green Finance Specialized Committee of China Finance Society, UN Environment Programme, International Capital Market Association and IB, International Green Finance Forum was held in Shanghai, another charming city in Yangtze River delta.
On one hand, the forum showed the development of green finance in China and on the other hand, it raised awareness of green finance in G20 and fueled international exchanges and cooperation in green finance. Yi Gang, deputy governor of the People’s Bank of China, Erik Solhiem, UN Deputy Secretary-General and Executive Director of UN Environment Program, Barbara Woodward, British ambassador to China, Per Bolund, Minister for Financial Markets and Consumer Affairs, as well as other Chinese and foreign officials and distinguished guests attended the forum and made speeches. Tao Yiping, the governor of IB and representative of leading banks in green finance in China, made a keynote speech in the morning.
Tao Yiping stated that as green development was elevated as a national strategy, green finance will usher in a new round of explosive growth, and all financial institutions including IB will meet important strategic opportunities. As the first equator bank on the Chinese mainland, IB has been committed to green financial field for ten years. While becoming a pioneer of green finance in China, it will seize historical development opportunities and work to be a world-class supplier of comprehensive green financial service.
From 2006, IB was the first to launch financing business for energy efficiency projects, and explored sustainable development, took green finance as its strategic business, and vigorously pushed forward its development. Over the past years, it continued to make more innovations, and used a variety of financing products to provide green financing of more than RMB 900 billion for a total of more than 6400 enterprises. At present green financing balance exceeded RMB 430 billion, accounting for more than 14% in the corporate financing balance and ratio of non-performing asset was lower than that of the industry and IB’s average ratio of non-performing assets. According to estimates, the projects supported by IB's green finance can annually save standard coal by 26.29 million tons, and reduce carbon dioxide emissions by 73.83 million tons.
“Through green finance, IB achieved a win-win situation between economic profit of enterprise and social ecological benefits, and figured out a good development path that was featured by green finance and that obtained reasonable profits while bringing benefits to the stakeholders.” Tao Yiping said.
He compared IB’s a decade’s exploration in green finance to a miniature of the development of green finance in China. Over the past decade, the government, regulatory authorities and the society laid more emphasis on green development, and promulgated a series of policies, laws and regulations on energy saving and emission reduction, environmental protection, green credit and green finance, thus green financial industry can thrive in China. For an earlier notice of this development trend, IB took the lead to closely integrate itself into green development, and achieved rapid development of green financial services.
Unremitting innovation is another important factor in IB's rapid development of green finance. Over the past ten years, IB was the first in China to provide comprehensive carbon financial services, launch emission permit pledge loan and carbon asset collateral loan, put forward integrated solutions of water resource utilization and protection, launch bank-based carbon trading agent account system, release low carbon credit card, and release green credit asset-backed securities and green financial bonds. It created many “firsts” in green finance. At present, IB’s green finance business system has been enriched. It has formed a complete and multifarious green product service system covering green financing, green leasing, green trust, green fund, green investment and green consumption. Green finance has become an essential and prominent part of IB comprehensive financial group.
Tao Yiping believed that green finance will usher in a new round of explosive growth, so all financial institutions including IB will meet important strategic opportunities.
From a domestic perspective, as of the end of 2015, green credit in China has exceeded RMB 8 trillion; green bond market was the largest in the world, and green bonds issued in the first half of the year accounted for about 30% of global market; market system of carbon trading pilots was improved, trading rules expanded exponentially, and the construction of a unified national carbon market was in the near future.
From an international perspective, the goals of sustainable development and the Paris Agreement has provided a series of important policy guidance for global economic and environmental development, which require that trillions of dollars should be invested in green industry across the globe every year, and that the financial system should pay more attention to green and sustainable development and there’s huge space for development.
“Chinese government develops green finance and promotes green development with unprecedented determination.” Tao Yiping concluded that, in theory, China has included “green development" in the "13th Five-Year Plan", and taken it as a national strategy; in practice, China vigorously promotes supply-side structural reform, and accelerates the development of emerging industries such as energy saving and environmental protection while promoting transformation and upgrade of traditional industries into low consumption and environmental protection industries in a comprehensive way.
He also pointed out that green development called for huge investment of financial resources, and the financial industry had a brilliant future. According to the latest research of authority, from 2015 to 2020, investment demand of green development in China is about RMB 2.9 trillion per year, of which governmental investment occupies about 10% to 15%. The financial industry undertakes the responsibility of mobilizing social capital to serve green industry and fill the financing gap of green development. In addition, integration of green industry and improvement of green financial market system needs intellectual resources from financial institutions. This is the basis for the development of green finance in China.
IB has drawn up a five-year goal of “two ‘ten thousand'”, i.e. by 2020, the financing balance of green finance of IB Group shall exceed RMB 1 trillion and the number of green finance clients shall reach ten thousand, and it will offer diversified “intelligent finance” service and work to be a world-class supplier of comprehensive green financial service. Since the launch of green financial service, IB attaches great importance to opening up exchanges and cooperation, hopes to carry out more and more in-depth exchanges and cooperation on concept, technology and business with interbank and other kinds of organizations at home and abroad, and shares historic opportunities of great development of green finance in China during the construction of environment-friendly society.