Green finance is good, policy dividends are powerful




Achieving carbon peaking and carbon neutrality is my country's solemn commitment to the international community, and it is also an extensive and profound economic and social transformation. Many industry insiders regard the past 2021 as the "first year" of the rise of green finance. In fact, under the catalyst of previous policies, the development of green finance has shown a positive trend this year, and the investment and financing enthusiasm has increased significantly.

Our reporter noticed that the birth and development of the concept of green finance has gone through a relatively long process. The industrial civilization of human beings has made a great leap in social productivity, and also made the worsening environmental problems more and more prominent. Public campaigns on the subject of environmental protection and social responsibility prevailed for a while, but they also gradually influenced business behavior and decision-making. From the perspective of policy in recent years, the release of positive signals and "combination punches" are even more important features. For example, the "Carbon Peaking Action Plan before 2030" issued by the State Council in October last year specifically pointed out that in the development of green economy, trade, technology and financial cooperation, it is necessary to deepen international cooperation in green finance, and actively participate in carbon pricing mechanism and green financial standard system. International macro-coordination to jointly promote green and low-carbon transformation with relevant parties; the People's Bank of China, relying on a number of national-level green finance reform and innovation pilot zones, actively promotes green finance such as "Green Finance Terminology" and "Green Bond Credit Rating Specification (Trial)". Financial national standards and industry standards, sum up experience in a timely manner, and provide a solid foundation for improving green financial standards and giving full play to the standards to empower the green and low-carbon development of the domestic economy and society; The National Development and Reform Commission and the National Energy Administration recently issued the "Opinions on Improving the System, Mechanism, and Policy Measures for Energy Green and Low-Carbon Transformation", making detailed arrangements for promoting energy green and low-carbon transformation.

At the same time, Chinese domestic institutional investors are actively exploring ESG (Environmental, Social and Governance) investment under the guidance of regulatory authorities, and have gradually carried out relevant capacity building. The ESG investment practice of domestic asset management institutions has increased significantly. In addition, the vigorous development of green funds and ESG products is also promoting the green transformation of related industries.

Professor Shi Yichen, deputy dean of the Green Finance Research Institute of Central University of Finance and Economics, said in an interview with a reporter from China Trade News that for enterprises, the main role of ESG is to measure the sustainability, credit quality and risk management capabilities of enterprises. In the short term, ESG may bring a certain cost to enterprises, because the application of ESG concepts means the standardization and improvement of standards; but in the long run, as regulation and market demand for ESG tend to become mainstream, future enterprises are likely to It is necessary to invest a lot of costs in the short term to respond to regulatory and market demands, and the required investment will be far greater than the early investment of the enterprise.

“Furthermore, ignoring the risks posed by ESG may also incur higher risk costs for companies in the future. In short, the sooner companies start ESG practices, the more sustainable they can be in the market for long-term profits and later The investment is relatively low cost." Shi Yichen emphasized.

According to the reporter's observation, compared with the traditional investment evaluation mechanism, ESG examines more factors other than the fundamentals of the company. This is an emerging investment strategy that is expected to deliver higher ROI over the long term. According to incomplete statistics, more than 30 economies around the world have required companies to disclose ESG information, including the United States, Japan, EU countries, India, Brazil, and South Korea. Exchanges in some countries and regions have launched ESG information disclosure standards and related guidelines in a timely manner, and some exchanges have implemented mandatory ESG information disclosure systems.

At the same time, the concept of green finance has gradually developed and accelerated its dissemination due to global climate and environmental issues, and was proposed as an important topic at the G20 Summit in Hangzhou in 2016. This concept was also vigorously promoted by the officials of various countries around the world, especially China, at that time. In August 2016, seven ministries including the People's Bank of China and the Ministry of Finance jointly issued the "Guiding Opinions on Building a Green Financial System", proposing a series of incentives to support and encourage green investment and financing. In November 2018, the Asset Management Association of China officially released the "Green Investment Guidelines (Trial)", requiring fund managers to conduct a self-assessment of green investment every year, and to prepare the self-assessment report and the "Green Investment Self-assessment of Fund Managers". Form" submitted to the China Foundation Association. Since then, green investment has become a topic of great concern to AMAC and the entire fund industry.

Judging from the data released one after another at the beginning of this year, the issuance of green bonds accelerated in the first month. According to statistics from China Chengxin Research Report, 40 new green bonds will be issued in January 2022, with a total issuance scale of 69.292 billion yuan, of which 11 are carbon neutral bonds with a scale of 14.319 billion yuan. On the whole, the issuance of green bonds in January this year was more than four times that of the same period last year, and the issuance scale was about seven times more. Green bonds accounted for 3.65% of the overall bond market in January, a significant increase from 2.05% in 2021. In addition, carbon emission reduction support tools have been intensively funded, and the first zero-carbon technology investment fund was also established at the beginning of the year.

It is worth mentioning that more social capitals are actively involved in green finance investment and financing in various ways. On February 8, the "2021 Sustainability Bonds (First Anniversary Report)" disclosed by Alibaba Group showed that Alibaba Group had previously issued a 20-year sustainable development bond, with net proceeds of approximately US$987 million. At present, the funds have been fully used to support 12 ESG-related projects, covering areas such as energy efficiency and green buildings.

In fact, the power of Chinese enterprises to promote the development of green finance is relatively weak as a whole, but the leading enterprises in the industry with larger scale and better development tend to pay more attention to their own green development and sustainable ESG development.

"This shows that when an enterprise develops to a certain scale, in order to stand out from the market competition and achieve its own long-term sustainable development, it must pay attention to green and low-carbon transformation and sustainable capacity building." Shi Yichen believes that for enterprises, ESG performance Good can build trust for companies and investors and stakeholders, and resist trust crises when the market faces negative shocks.