China's climate ambitions a historic boost to green finance, fintech, says report
- By Zhu Bochen
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E-mail China.org.cn, June 21, 2021
China's carbon neutrality targets carry huge potential for economic growth and technological innovation, bringing historic opportunities for the development of green finance and financial technology (fintech), said a report released on Friday.
The report, titled "Fintech Facilitates Green Finance Development in China: Cases and Outlook," provides insights into how fintech is transforming the business models of financial institutions in China and supporting green finance in better mitigating environmental risks and facilitating sustainability.
The Paulson Institute's Green Finance Center and the Institute of Finance and Sustainability (IFS) released the report based on their annual tracking of fintech's application in China's green finance markets. The report found that China's carbon peak and carbon neutrality goals have created a new sense of urgency, and green finance is one of the country's main avenues to achieve those goals.
"On the road to a more resilient recovery, green development is central, with finance and technology as key drivers," said IFS President Ma Jun during a virtual launch ceremony for the report.
Ma, also chairman of Green Finance Committee of the China Society for Finance and Banking, predicted that green investment worth hundreds of trillion yuan would be needed for China to achieve carbon neutrality.
"Still, green financing services in the future must help support the development of green SMEs, agriculture, shopping, and architecture," Ma urged, calling for more fintech applications such as big data, IoT, and blockchain to empower green finance.
The report also studies emerging case studies of carbon emission trading and the role fintech applications play in facilitating environmental, social and governance (ESG) investment.
"These case studies provide lessons for China and potentially emerging market countries, in how to use fintech to address environmental risk and promote sustainable investment and carbon pricing," said Deborah Lehr, vice chairman and executive director of the Paulson Institute.
In September last year, China vowed to peak its carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060. Despite the country's economic growth being largely powered by fossil fuels over previous decades, China is now one of the world's largest investors in green energy.
According to this year's government work report, China will work to reduce its energy consumption per unit of GDP and carbon dioxide emissions per unit of GDP by 13.5% and 18% respectively.
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