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China to develop capital markets to boost green financing: researcher

Updated: Sep 3,2016 11:51 AM     Xinhua

BEIJING — China’s securities watchdog is considering more support for green financing via the capital market to help the transition to greener growth, according to a senior researcher.

More capital market support could help channel money into environmentally friendly sectors, said Ma Xianfeng, deputy head of the China Institute of Finance and Capital Markets, a think tank affiliated with the China Securities Regulatory Commission (CSRC).

A green financing mechanism will help the transition to sustainable growth, according to the People’s Bank of China (PBOC) on Aug 31, who called for more products on the capital markets for companies investing in green business.

The CSRC may ease IPO approval for green companies and require stricter information disclosure and investigation regarding environmental protection, according to Ma.

Ma pointed out that China still has no standards and regulations for green bonds but the government can offer tax exemptions or subsidies for green bond insurance to reduce financing costs.

A total of 12 issuers have declared 13 green company bonds or green-asset-backed securities with a volume of 35 billion yuan ($5.25 billion).

The CSRC is also researching carbon futures, important to reducing carbon emissions and might build a carbon futures market once the carbon spot market is well established.

China now has 19 green stocks indexes featuring sustainable development, environmentally friendly sectors and green environment topics, which only account for about two percent of all indexes.

The government should develop more green indexes and encourage domestic asset management institutions to develop investment products, green stocks and bond indexes, Ma added.

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