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[Exclusive] Green Finance Standards Need Upgrade, Paulson Foundation’s Sun Says
Du Chuan
DATE:  Aug 07 2020
/ SOURCE:  Yicai
[Exclusive] Green Finance Standards Need Upgrade, Paulson Foundation’s Sun Says [Exclusive] Green Finance Standards Need Upgrade, Paulson Foundation’s Sun Says

(Yicai Global) Aug. 7 -- China has bolstered support for green finance in the wake of the coronavirus pandemic, giving its development a boost, but standards need to be improved, according to a senior advisor at the Paulson Institute.

The government must build catalogs for green new infrastructure industries and industrial chains to form standards for green new infrastructure projects, and regulators must issue policies to guide industries and companies on intelligent and green transformation, Sun Rui, executive director of the Green Finance Center at the Chicago-based think tank, said in a recent interview with Yicai Global.

Drawing up such policies and standards can guide financial institutions to enhance support to green finance entities and projects. Sun also suggested to intensify disclosure of environment information in the appraisal stage to encourage financial institutions to invest in green projects.

Green finance refers to the use of loans, insurance and other financial products and services for eco-friendly projects in such areas as environmental protection, energy conservation, and clean energy.China has been making headway in the area as the country's high-quality growth gives impetus to the sector. The spread of the coronavirus has also boosted green finance.

“China's green finance sector is advancing with the times,” Sun said. “China has enhanced green finance support related to the fight against the epidemic and brought the advantages of green channels to full play amid the virus. That has motivated green finance investors and given rapid and low-cost financial support to related green finance investment and financing projects.”

Fintech Solutions

Sun also said that investment in the Internet of Things, industrial internet and other high-tech and emerging industries, the upgrading of traditional industries such as electrical energy, green buildings, and green consumption will each exceed CNY1 trillion (USD143.7 billion) every year.

China’s green finance is developing rapidly but still lags behind developed countries in terms of citizen’s awareness and financial institutions’ responsibility management, and is in huge need of talent, Sun added.

Financial technology can offer solutions to the problems that arise in the development of green finance, she said, pointing to blockchain technology.

Big Data, blockchain and other fintech solutions can solve information asymmetry for micro and small businesses and make information more available in the capital market to help financial institutions achieve look-through fund management in green finance services and track where green bonds and credit loans go and bring new ideas for the development of green finance.

Some financial institutions have been using fintech in their internal systems to achieve look-through fund management in green finance services, Yicai Global has learned.

Founded in 2011 by former US Treasury Secretary Henry M. Paulson, the Paulson Institute focuses its work on the China-US relationship. It also has branch offices in Washington and Beijing.

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Keywords:   green finance,fintech