The Green Finance Center at the Paulson Institute and the Institute of Finance and Sustainability (IFS) jointly released their annual report "2023 Fintech Facilitates Green Finance in China: Cases and Outlook" on Thursday in Beijing.

The cover of the "2023 Fintech Facilitates Green Finance in China: Cases and Outlook" report. [Photo courtesy of the Paulson Institute]

The report, the fourth of its kind, examines the latest policies, market trends and fintech applications in green finance in China. It also showcases fintech in practice through three new case studies.

Deborah M. Lehr, vice chairman and executive director of the Paulson Institute, noted that 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.

President of the IFS, Ma Jun, commented on fintech's role in green finance, saying that fintech-enabled products, while being utilized in green credit, green funds, green energy markets and green bonds, are expanding their coverage into fields such as green insurance, green trust, green leasing and carbon finance.

According to the report, since 2021, China has actively explored various measures to promote green finance in pursuing its carbon peak and carbon neutrality goals. Five key pillars of green finance have now taken shape in China, namely green finance standards, supervision and information disclosure requirements for financial institutions, incentive and constraint mechanisms, green finance products and market systems, and international cooperation. 

Gracie Sun, senior advisor and managing director of the Green Finance Center at the Paulson Institute, lauded fintech's indispensable role in driving green finance. She said that 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.

Zhang Fang, deputy director of ESG Investment Research Center of the IFS, highlighted that leveraging fintech to empower the high-quality development of green finance requires the full support of regulators and local governments, as well as in-depth cooperation between financial institutions and tech companies. She added that the involved parties will continue to improve the policy framework and incentive mechanism, better apply experience from pilot areas, and expand application scenarios and business innovation of green finance.

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