Chinese regulators designated 18 credit rating and accounting agencies as the country’s first officially approved green bond certification authorities to regulate the fast-growing market, as reported by Caixin on September 22. The Green Bond Standards Committee (GBSC), affiliated with China’s National Association of Financial Market Institutional Investors, has submitted a list including the 18 institutions to the central bank and the China Securities Regulatory Commission (CSRC). The list comprises Lianhe Equator Environmental Impact Assessment, China Chengxin Green Finance Technology (Beijing), Ernst & Young Huaming Certified Public Accountants, and others. These certification bodies were selected through a review involving 166 experts in bonds, investments, environment, and infrastructure. According to the GBSC, these agencies will greatly help promote the self-discipline and regulation of the green bond industry.

China issued green bonds worth RMB613.3bn (USD87bn) in 2021, almost tripling the 2020 total. As of the end of August 2022, China’s green bond issuance had amounted to RMB508.5bn (USD70.35bn), on track to create a new record. However, the booming market was found lacking in unified standards and regulatory frameworks. Moreover, China’s green bonds cover those used for environment conservation, biodiversity, and pollution prevention, while the green bond standards in many other countries focus on climate change alone. Therefore, the GBSC enacted the China Green Bond Principles on July 29 to create a unified framework for green bond issuance. The principles comprise standards on the use of funds, project assessment and selection, fund management, and information disclosure.

Sources:

https://www.caixin.com/2022-09-22/101944633.html

https://www.caixinglobal.com/2022-09-23/china-names-18-institutions-as-gatekeepers-for-green-bonds-101943526.html

https://www.cs.com.cn/xwzx/hg/202207/t20220728_6287532.html