The number of green fintech companies has doubled in three years, and they are active in areas such as carbon accounting

"Since 2020, the number of tech companies active in China's green finance sector has almost doubled from 59 to 102. In the past, these fintechs were mainly used in the field of inclusive finance, but now more and more large technology companies are constantly joining the field of green finance, and fintech companies that promote the application of green finance scenarios are growing rapidly. On October 26, at the press conference of "Fintech Drives the Development of Green Finance in China: Cases and Prospects (2023)", Sun Rui, senior advisor to the Paulson Institute and executive director of the Center for Green Finance, pointed out in an interview with the 21st Century Business Herald that fintech is an indispensable and important infrastructure to support the development of green finance and transition finance, and that fintech has natural technical advantages in improving the authenticity, reliability and traceability of data.

At the press conference, Ma Jun, President of the Beijing Institute of Green Finance and Sustainable Development, said that digital information technology, as an important tool to empower the high-quality development of green finance, has been fully applied in the field of green credit business, and has gradually expanded to green trust, green leasing, and environmental rights and interests products. With the in-depth promotion of green finance, the importance of scientific and technological empowerment in the fields of green inclusion, carbon accounting, financial support for biodiversity conservation and transition finance has become more prominent.

Beijing and Shanghai are leading in the application of green financial technology

In 2022, the People's Bank of China, the former China Banking and Insurance Regulatory Commission and other financial regulatory authorities successively issued the "Fintech Development Plan (2022-2025)", "Regulatory Data Standardization Specifications for Banking Financial Institutions (2021 Edition)", "Guidelines for Green Finance in the Banking and Insurance Industry" and other documents to continue to promote the standardization of financial technology, improve the management level of green finance, and strengthen the in-depth integration and development of financial technology and green finance.

Sun Rui told the 21st Century Business Herald reporter that the market players currently active in the field of green finance are mainly divided into four categories, including providers of environmental information big data, financial technology companies focusing on green finance, technology subsidiaries of financial institutions, and Internet technology companies. The active deployment of large technology companies such as Ant, Tencent, Baidu, and Alibaba Cloud has also promoted the development of the green finance market, bringing technology capital and innovation to the market, as well as a full range of professional solutions.

Sun Rui further introduced to the 21st Century Business Herald reporter: "As major financial technology companies and green finance application locations, Beijing and Shanghai have always been ahead of other regions; But in the past few years, we have also seen a relatively rapid increase in the number of fintech companies in Shenzhen, Hangzhou, Wuhan and Xi'an. ”

From the perspective of application subjects, fintech companies serving enterprises and financial institutions have a large and rapid growth from 2021 to 2022, and the services provided by enterprises mainly focus on carbon accounting and energy efficiency management, which is closely related to the launch of our national carbon market in 2021.

From the perspective of technology application, big data, artificial intelligence, and cloud computing have always been the top three scientific and technological applications, which can effectively solve the problems of information asymmetry, difficulty in obtaining relevant information such as carbon emission reduction data, and high cost faced by green finance. On the other hand, due to the breakthrough application in many scenarios such as climate disaster insurance, green agricultural loans, and distributed photovoltaics, the Internet of Things, remote sensing, and blockchain technologies have also been upgraded in recent years.

Sun Rui told the 21st Century Business Herald reporter that the main components of China's green financial products are credit, bonds and funds, which are also the main areas of financial technology enabling financial products. The green finance platform developed by many domestic banks integrates the intelligent identification of green entities and green economic activities into the credit process, breaks down the information barriers between different departments, and effectively improves the quality and speed of the credit approval process.

Fintech plays an important role in carbon emissions

In the context of promoting the "dual carbon" goal, China's green finance development will be more and more concentrated towards the dual carbon goal, and transition finance, green inclusion, and low-carbon transformation of enterprises will be important aspects of China's sustainable finance, and it is also an area where fintech can make great achievements.

In response to the recent restart of the carbon market CCER, at the above press conference, Zhang Jie, director of the Carbon Emission Management Division of the Science and Technology Information Department of China Huadian Group Co., Ltd., told the 21st Century Business Herald reporter that power companies need to complete the dual tasks of low-carbon transformation and carbon emission performance under the task of ensuring supply, and financial technology has played a very important role in carbon emissions, carbon assets and carbon trading. For example, the development of Huadian's carbon digital intelligence platform uses big data analysis and data mining technology to identify abnormal data and improve the quality management level of enterprise carbon emission data. At the same time, it carried out carbon reduction potential analysis and enterprise benchmarking management, which provided data support for the technological transformation and daily operation adjustment of enterprises.

Zhang Jie further introduced that Huadian also uses intelligent robot API to automatically log in to carbon trading accounts, which greatly improves the efficiency and security of account management in the case of carbon emission trading and compliance of more than 100 enterprises.

In response to the financing problem of power enterprises, Zhang Jie told reporters that at present, based on the above solid ecological management foundation, enterprises can support enterprises to successfully carry out carbon financial derivative businesses including carbon quota pledge loans and carbon insurance. For example, Huadian Jurong Power Plant in Jiangsu Province used the surplus carbon allowance as collateral to obtain credit funds below the market loan interest rate, which were used for carbon capture of thermal power units, research and development of high-performance chemical absorbents, and CCUS technology transformation, achieving a win-win situation for enterprises to reduce carbon emissions and expand financing channels.