Green Finance ： China and Global Initiatives

1. Green Finance：China and Global Initiatives MA Jun, Ph.D. Chairman, Green Finance Committee of China Society for Finance & Banking Director of Research Center for Green Finance Development, Tsinghua University Chair, Supervision Workstream of NGFS August 2019

2. CONTENTS • China: Establishing a Green Financial System • International cooperation: G20, NGFS, Green Investment Principles, Green Finance Leadership Program

3. Green Finance in China

4. Objectives of a green financial system Tomobilize green finance：RMB4tn will be needed per year to finance green and low-carbon investments in China To manage financialrisks：to protect the financial sector from risks arising from exposure to environmental and climate risks

5. A policy framework for green finance， outlined by China’s Green Finance Guidelines (2016)

6. Taxonomies

7. China - Green Credit Definition (2013) Green Credit Definition, by China Banking Regulatory Commission (2013) (one pager) 1 Green Agriculture 2 Forestry 3 Energy Saving and Water Saving 4 Natural resource protection, environmental restoration, disaster prevention 5 Recycling of natural resources 6 Waste treatment 7 Renewable energies (solar, wind, biomass, hydro etc) 8 Water supply projects 9 Green building 10 Green transportation 11 Energy saving and water saving services 12 Green projects by international standards

8. China - Green Bond Catalog (2015) by China Green Finance Committee (10 pages) Circular economy：Water saving, re-utilization of tailings and associated mines, solid waste and renewable resources utilization, etc. Energysaving：Industrial energy conservation, green building, energy management, etc. Environmentalremediation：Pollution prevention and control (water, air, solid waste), environmental restoration, clean coal utilization, etc. Eco-protection and climate change adaptation:Ecological protection, afforestation, ecological agriculture, animal husbandry and fishery, disaster emergency protection, etc. Cleanenergy：Solar energy, wind energy, water energy, natural gas, geothermal energy, ocean energy, distributed energy, smart grid, etc. Clean transportation：Railways, urban rail transit, public transportation, clean fuel, new energy vehicles, etc.

9. China - Green Industry Catalog (2019)by seven ministries led by NDRC (60 pages)

10. Policy incentives

11. Selected policy incentives by central bank and local governments

12. Environmental Info Disclosure

13. Sampleofdisclosurereport for green bonds: Environmental impact Positiveenvironmentalimpact oftheissuingofgreenbondofChina PudongDevelopmentBank Source: EYreport：post-issuance for green bond issued by SPD Bank

14. Products and tools

15. Green Finance Products/Tools • Green loans (RMB10tn outstanding) • Green bonds (raised RMB900bn since 2016) • Green insurance • Green PE investment (400 green funds) • Financing on emission rights as collaterals • Green rating/verification • Environmental impact assessment • Environmental risk analysis

16. Green Banking IT systems, are used or developed by some Chinese banks. Such systems are able to: Labelling green loans Estimating environmental impact of projects Pricing green loans Post-lending monitoring of borrowers’ environmental performance Reporting green banking statistics Automating Green Banking Practices

17. International Initiatives

18. G20 Green Finance Study Group - 2016 Seven Voluntary Options Five Research Topics Provide strategic policy signals and frameworks Promote voluntary principles for green finance Expand learning networks for capacity building Support the development of local green bond markets Promote international collaboration to facilitate cross-border investment in green bonds Encourage and facilitate knowledge sharing on environmental and financial risk Improve the measurement of green finance activities and their impacts • Greening the Banking System • Greening the Bond Market • Greening Institutional Investors • Risk Analysis • Measuring Progress

19. G20 Green Finance Study Group - 2017 Environmental Risk Analysis (ERA) Publicly Available Environmental Data (PAED)

20. Green Finance in the G20 - 2018 Creatingsustainableassetsforthe capitalmarkets DevelopingsustainablePE andVC Applicationsofdigitaltechnologies to sustainable finance

21. Central Banks and Supervisors Network for Greening the Financial System (NGFS) • Founded in December 2017 • 8 Founding Members:Central Banks and/or Financial Regulators from Germany, Mexico, the UK, France, the Netherlands, Sweden, Singapore, China. • Now 40 Members and 5Observers, and still growing.

22. Green Investment Principles (GIP) for the Belt & Road • China Green Finance Committee and the City of London jointly launched the Green Investment Principles (GIP) for the Belt & Road in November 2018. These principles are: • Embedding sustainability into corporate governance • Understanding Environmental, Social and Governance Risks • Disclosing environmental information • Enhancing communication with stakeholders • Utilizing green financial instruments • Adopting green supply chain management • Building capacity through collective action • 28 Global Institutions have signed up to the GIP and we will host the first annual GIP meeting in August.

23. Green Finance Leadership Program (GFLP) The GFLP is jointly launched by Tsinghua University, IFC-supported Sustainable Banking Network (SBN) and CCICED, with an aim to provide green finance capacity building services for policy makers, financial regulators and market practitioners around the world, with a focus on EM economies. In 2018: Two events, held in May and November in Beijing, attracted more than 250 participants from 48 countries - mostly developing countries along the Belt & Road. In 2019: Three events have been planned in this year: Jun. 2019, Casablanca, Morocco Sep. 2019, Astana, Kazakhstan Nov. 2019, Singapore

24. Thank you!