The report highlights recent policies, market trends, and applications in China’s green finance sector.
BEIJING, October 26, 2023—Today, the Green Finance Center at the Paulson Institute and the Institute of Finance and Sustainability (IFS) released their annual 2023 report, Fintech Facilitates Green Finance in China: Cases and Outlook. Fintech has emerged as a powerful instrument to transform the green finance system and further promote a low-carbon economy. This report analyzes recent policies, market trends, and fintech applications in green finance in China. Additionally, it showcases fintech in practice through three new case studies.
“The fintech industry has grown by leaps and bounds in recent years, and policymakers and business leaders are challenged to capitalize on this remarkable growth potential, align with global net-zero development goals, and facilitate a low-carbon transition in high-emission sectors. We are pleased to be releasing this annual report for the fourth consecutive year to highlight this growth,” said Deborah Lehr, Vice Chairman and Executive Director of the Paulson Institute.
Ma Jun, President of IFS, commented on fintech’s role in green finance, “Digital information technology is a crucial tool to facilitate the high-quality development of green finance, has been extensively utilized in green credit and is gradually expanding to include green trust, green leasing, and products related to environmental rights and interests. As the scope of green finance expands, the significance of technological empowerment in key areas such as green inclusion, carbon accounting, financial support for biodiversity conservation, and transition finance is becoming increasingly apparent.”
Since 2021, China has actively explored and taken various measures to promote green finance in pursuing the “dual-carbon” goals of carbon peaking and neutrality. These efforts focus on five key pillars:
- Green finance standards,
- Supervision and information disclosure requirements for financial institutions,
- Incentive and constraint mechanisms,
- Green finance products and market systems, and
- International cooperation in green finance.
“Fintech plays an indispensable role as a vital infrastructure to support the development of green and transition finance. Fintech possesses inherent technological advantages that enhance the authenticity, reliability, and traceability of data, which can better meet the growing demands for sustainability-related disclosure in green finance and the dynamic disclosure requirements in transition finance,” said Gracie Sun, Senior Advisor and Managing Director of the Green Finance Center at the Paulson Institute.
Furthermore, in line with the approval of the G20 Transition Finance Framework in 2022, the People’s Bank of China has laid out the fundamental principles of transition finance and initiated research on the related standards for four sectors, including iron and steel, coal power, construction and building materials, and agriculture. “The effective promotion of fintech empowering the high-quality development of green finance relies on the full support of regulators and local governments and requires in-depth cooperation between financial institutions and tech companies. Looking ahead, all parties involved will continue to explore ways to improve the policy framework and incentive mechanism, better leverage and disseminate experience from pilot areas, consolidate the green finance market infrastructure, and expand application scenarios and business innovation,” said Zhang Fang, Deputy Director of ESG Investment Research Center of the IFS.
For more information, please click to download the report.
The Green Finance Center at the Paulson Institute
Founded in Chicago in 2011 by Henry M. Paulson, Jr., the 74th Treasury Secretary of the United States and former CEO of Goldman Sachs, the Paulson Institute is a nonprofit, non-partisan, independent “think and do tank” dedicated to fostering the US-China relationship. We operate at the intersection of economics, financial markets, environmental protection and policy initiatives, with a focus on contributing to balanced and sustainable economic growth. The Green Finance Center, established in 2018, supports the greening of the financial system by moving green finance from a philanthropic niche to the mainstream of markets. By focusing on three core areas – carbon, finance and fintech – the Center aims to promote market-driven solutions to foster a vibrant international green finance market through convening, advocacy, thought leadership, and our expertise.
The Institute of Finance and Sustainability (IFS)
The Institute of Finance and Sustainability (IFS) is a think tank that provides a platform for policy, market, and product research as well as international cooperation on green finance and sustainability in China and beyond. As a nonprofit organization, the Institute aims to become a globally recognized think tank in the fields of green finance, natural capital financing, low-carbon development and energy transition, and make substantial contribution to the improvement of the global environment and the fight against climate change.
Jing Wang, Associate Director of Communications