What should be done to finance green and sustainable development? This forum gives ideas
Green finance is a catalyst and accelerator for sustainable urban development, and plays an important role in the process of low-carbonization. So, what should be done to invest and finance green development and sustainable development? What are the multiple perspectives and solutions? A forum on the theme of World Cities Day focused on this gave ideas.
On the afternoon of October 30, the Green Development and Sustainable Development Investment and Financing Forum of the 2023 World Cities Day Theme Forum was successfully held at the Shanghai International Convention Center. The forum was hosted by the Shanghai Municipal Housing and Urban-Rural Development Management Commission and Shanghai Culture Radio, Film and Television Group, organized by Shanghai Yicai Media Co., Ltd., Lujiazui Administration of China (Shanghai) Pilot Free Trade Zone Management Committee, Shanghai Environment and Energy Exchange, and co-organized by Shanghai Lujiazui Culture Media Co., Ltd.
At the forum, Zhou Hanmin, member of the Standing Committee of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) and President of the Shanghai Public Diplomacy Association, Zhang Yonggang, Deputy Director of the Shanghai Municipal Housing and Urban-Rural Development Management Commission, Li Rong, Vice President of Shanghai Culture, Radio, Film and Television Group and Chairman of China Business Network, and Yuan Yefeng, Deputy Director of the Lujiazui Administration Bureau of the China (Shanghai) Pilot Free Trade Zone Management Committee, attended and delivered speeches.
Reflections on Financial Institutions
Zhang Xingrong, President of the Yangtze River Delta Financial Research Institute of Bank of China Shanghai Branch, said in his keynote speech that since China issued the world's first national-level green finance policy in 2016, the policy framework, measurement standards and governance mechanisms have been continuously improved, and financial instruments have expanded from early-stage credit to green funds, transition bonds and ESG funds. At the end of June 2023, the balance of China's green loans exceeded 27 trillion yuan, a year-on-year increase of 38.4%, and more and more Chinese financial institutions are participating in relevant international organizations to implement sustainable development standards. Sustainable development investment and financing have become an important engine for economic growth in China and the world, and have also provided a boost to the sustainable development of cities.
Based on practice, Zhang Xingrong put forward some thoughts on sustainable development investment and financing business. He said that first of all, it is necessary to strengthen the top-level design and improve the green financial organization system; secondly, it is necessary to optimize financial supply and enrich the green financial product system; Third, we need to deepen cross-border linkage and build a green finance cooperation system.
He also suggested enriching the connotation and extension of Shanghai's sustainable investment and financing, promoting the expansion of the carbon trading market, gradually including other high-carbon emission enterprises, and considering the introduction of some financial institutions on a pilot basis. Internally, we will promote the transformation and upgrading of high-carbon industries, strengthen the management and control of key industries, curb the blind development of high-energy-consuming and high-emission projects, and develop transition finance to provide financial support for high-carbon enterprises to replace their production capacity and low-carbon transformation.
Suggestions and construction ideas of service providers
As the earliest comprehensive consulting institution in China, the most comprehensive consulting organization with the most complete categories and the strongest industry, Sun Wei, deputy general manager of Shanghai Investment Consulting Group, pointed out in his speech that Shanghai is a large city in economy, industry and population, as well as a small city in space, resources and environmental capacity. To achieve green transformation based on the characteristics of a city and industry like Shanghai, the focus should be on five major areas: energy, industry, construction, transportation, and lifestyle.
In addition to the above five key areas, Sun Wei believes that the entire green transformation also needs a sound support system, including the construction of a policy system, the core supporting role of accelerating scientific and technological innovation, actively playing the role of market mechanism resource allocation, and at the same time giving full play to the role of the whole society in participating in co-construction and co-governance.
As the builder of the carbon market, the Shanghai Environment and Energy Exchange has been deeply involved in the construction, launch and smooth operation of the national carbon market in recent years, and supported the healthy development of the Shanghai carbon emission trading system. Liu Jie, general manager of Shanghai Environment and Energy Exchange, said in his speech that to promote regional environmental collaborative governance, we can start from many aspects and perspectives such as system construction, mechanism innovation, and mechanism guarantee. These include establishing long-term mechanisms to improve the efficiency of resource allocation, such as strengthening the construction of market-oriented mechanisms such as carbon market trading and emission rights trading; Special attention should be paid to the innovation of market-oriented mechanisms with cross-domain and comprehensive synergistic benefits, such as exploring the construction of carbon inclusive mechanisms; It is necessary to break through the bottleneck of mechanism development and release the impetus for innovation.
In terms of establishing a carbon inclusive mechanism and building a multi-level carbon market system, Liu Jie proposed that at present, China's carbon inclusive mechanism is mainly based on regional independent exploration in terms of top-level design, management and operation. With the expansion and deepening of the construction of the carbon inclusive mechanism, there is still room for exploration and optimization in strengthening incentives and improving the sustainable operation capacity of carbon inclusiveness. First, the carbon inclusive incentive methods will be more diversified, continue to enrich the incentive methods and products, and further mobilize the public's enthusiasm for emission reduction; Second, the publicity of the carbon inclusive mechanism needs to be strengthened, and there is still room for improvement in the awareness and acceptance of carbon inclusive by all sectors of society; Third, the cost and economic benefits of enterprise participation need to be improved, and the income of carbon assets is unstable, so it is possible to provide carbon financial services for carbon inclusive participants and guide the flow of social capital to emission reduction activities by promoting carbon finance innovation and encouraging institutions to set up carbon inclusive funds. Finally, the level of policy guidance and digital management needs to be improved, and the level of digitalization and informatization is also one of the key factors affecting the smooth operation and effective management of the carbon inclusive mechanism. Through the continuous improvement of the design of mechanism standards, it can provide support for guiding and regulating market participation behavior, and at the same time, through the introduction of blockchain technology, it can improve the informatization, digital intelligence, and security management of carbon inclusion.
Two starting points for building a market-oriented incentive mechanism
Ma Wenjie, Dean of the Shanghai International Financial Center Research Institute of Shanghai University of Finance and Economics, put forward his views from the perspective of how finance can support sustainable development, especially from the perspective of how to build a set of market-oriented incentive mechanisms. He said that to achieve sustainable development, funding is very important. At present, the funding gap is still large, and government funds alone are far from enough, and private capital and social funds are still needed to continuously enter the field of sustainable development. As a green investment, sustainable development has a relatively long investment cycle, no return in the short term, and the investment amount is relatively large, so a market-based incentive mechanism must be established.
Ma Wenjie believes that there are two important starting points for how to build a market-oriented incentive mechanism, the first is to build an investment and financing incentive system based on ESG evaluation, and the core is to achieve a high degree of unity between the financial performance and commercial value of green investment. The second is to vigorously develop the carbon market and carbon financial system. Among them, the construction of an investment and financing incentive system based on ESG evaluation not only needs to rely on policies to give corresponding incentive policies to banks, brokers, funds and other financial institutions, but also to improve investors' awareness of social responsibility. In this process, there are still some problems, such as the information disclosure mechanism, the underlying assets and leading role of institutional investors still need to be improved, and the evaluation system is very different. To this end, it is necessary to promote the combination of the internationalization of the ESG investment and financing system with local characteristics, and build a rating system that takes into account both internationalization and local characteristics; Refer to the European experience to increase the supervision of "greenwashing"; give full play to the leading role of financial institutions; Strengthen the role of core enterprises in ESG-driven; Increase fiscal and financial policy support, so that fiscal and financial policies are linked to the ESG evaluation structure; increase the scope of the carbon market; Vigorously develop carbon gold, etc.
At the forum on the same day, the annual flagship report of the CBN Research Institute, "The 10th Anniversary of the Belt and Road Initiative: New Silk Road Co-development", was officially released on the spot. After the release of the report, Zhao Kai, General Manager of Shenergy Chengyi, Zhang Liao, Founder and Chairman of Jibang Consulting Co., Ltd., and Kong Wei, Partner of Zhong Lun Law Firm, put forward their respective insights and suggestions on "sustainable development investment and financing from the perspective of diversification", respectively, from the perspectives of capital empowerment industry, infrastructure planning and green development of urban low-carbon transformation, as well as investment and financing mechanisms and green finance industry standards.
