Here’s your weekly update on green finance in China from the International Institute of Green Finance in Beijing with ESG, G20, wind, coal, and trash. 28th of June 2019. |
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At the IIGF we have been working on an exciting project together with the China Securities Index Co. Ltd. that we can now unveil: The CSI-Zhongcai Shanghai and Shenzhen 100 ESG Leading Index. The new Environmental, Social, and Governance (ESG) index will create a localized assessment system, making up for some of the shortcomings in the existing ESG assessment methodology for Chinese shares. Internationally, as Chinese A-shares have been included in the MSCI Emerging Market Index and thus gained wider, more direct exposure to portfolios, the new CSI-Zhongcai Shanghai Shenzhen 100 ESG Leading Index will work as potential verification tool for ESG conscious investors. If everything goes according to plan the index will also be tradeable on the Luxembourg Stock Exchange that already hosts the China green bond connect program. Aligning a portfolio with well performing ESG shares might pay of. The 100 best performing ESG shares in the new index are represented by the red line in the below, the CSI 300 average is blue. |
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This story is usually one about coal (and it will be further down), but a new joint Green Peace and Sichuan Circular Economy Research Center-paper have been looking at a different type of Chinese overseas energy investments: wind “From 2014 to 2018, South and Southeast Asia was the main growth points for Chinese overseas wind power investments. The total installed capacity of wind power projects completed by Chinese enterprises through equity investment in South and Southeast Asia was 397.5 MW, with 1362 MW planned or under construction.” Here’s how it breaks down: |
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Top bar is Europe, middle one is South East Asia and bottom is Central Asia (the stans). Blue is built, grey is underway. All in all, Chinese wind investments have made a foray into 64 Belt and Road countries. In Pakistan Chinese money featured in 37 percent of all the countries’ wind investments. 绿色和平发布: 中国1700兆瓦风电投资有望助力南亚和东南亚可再生能源发展 Related, solar installations in Vietnam (with plenty of pictures): 华东勘测设计研究院 |
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一带一路, from B to the I: how about Rail? |
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Going forward we'll add a Green Finance Belt and Road story to the mix for your weekly newsletter. Dr. Christoph Nedopil Wang of the IIGF will supply news and analysis for the segment. You can find his writing at www.green-bri.org or follow the steady newsflow on our dedicated LinkedIn page |
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Of the five Belt and Road pillars the most tangible has to be transport. Building a road or a port and slapping the BRI logo on it is a sure way to shore up support. Building the right kind of infrastructure, in this case, the green kind, is another matter. In this column Christoph looks at the innovative aspects of Chinese green public transport and its BRI potential. "China has been a role model in providing public transport services for its population for many years. Compared with countries of a similar development state, and even compared to most countries with a higher GDP per capita, China has a higher density of modern public transportation services for both urban public transportation services and inter-city public transportation services.” Of noteworthy achievements has to be the rapid expansion of the high-speed rail network, the mushrooming of metros across metropolises, and the export success of electric city busses. The growth in rail and subway and the innovations done in the realm of electrification are something, but, as Christoph points out, it hasn’t come cheap in China and won’t abroad either: “The main reason for the lack of the investments in innovative and green public transport systems is the high cost of construction, acquisition of hardware and operation/maintenance of the transport systems – as well as lack of policy/planning capacity. This is an important responsibility and opportunity for China with its expertise in fast and affordable construction, policy making and investment to share its experiences and support BRI countries in applying green public transportation innovation.” Do read the whole thing: Green Belt and Road: Green public transport innovation in China – an opportunity for BRI countries Chinese: 绿色公共交通: 中国的创新之举及给“一带一路”沿线国家带来的发展机遇 |
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We talked about the Beijing waste sorting dictum last week, and now South China Morning Post takes us to the street examining whether a solution to the trashy issue might be in sight. In front of a row of dumpsters in Beijing, they meet Xu: “Xu, who has lived in Beijing for 10 years, admitted her family never sorted its household waste, despite two decades of encouragement from the government to do so. Her attitude may be about to change.” Maybe because of the oratorical Xi: “[We should have] extensive education and guidance, to let people realise the importance and necessity of waste sorting; through effective supervision and guidance, [we should] let more people take action and form a good habit on waste sorting,” he said.” And consulting the experts in the relevant ministries: “Waste sorting is a now a political task for local officials, and they might lose their jobs if they can’t do the job well,” said Zhang Yi, an expert with the ministry, which has primary responsibility for waste management. Zhang said waste classification was a social issue but local officials had so far not paid enough attention to it. Most of the targeted 46 cities now had a plan on paper and had established offices with specific targets but, at the moment, waste sorting remained on paper too, he said.” It’s about trash classification, education, and local official validation. 100s of you have asked for advice on what to do when you’re standing in from of the bins with the assorted trash in hand. Look no further: The Trash Trap Game SCMP: Can China sort its household waste recycling problem by 2020? |
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The Natural Resources Defence Council, The International Institute of Sustainable Development, and Oil Change International have issued a damning report on the G20 countries sponsorship of coal globally, first line: “A decade on from their commitment to phase out subsidies to fossil fuels at the Group of 20 (G20) Summit in Pittsburgh, G20 governments continue to provide billions of dollars for the production and consumption of fossil fuels. This report finds that they provide at least US$63.9 billion per year in government support to the production and consumption of coal alone, with almost three-quarters of the support identified being directed to coal-fired power production.” It’s not entirely in Asian thing, but China, Japan, and South Korea does come out on top with regards to investments, while Bangladesh, Pakistan, Indonesia and Vietnam are the largest recipients of said investments. |
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五, another year, another fight |
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A 2019-2020 Battle for the Blue Skies has been declared. In looking back on the last one, the 2018-2019 edition, Huanbao Daily, has some great stats and insights: Going into last year’s war, there were 38,900 issues leftover from previous years. More than 80,000 companies and sites have been inspected in the past 12 months and 6,394 issues were discovered and dealt with. “Although the Battle for the Blue Skies has achieved results, the atmospheric environment situation is still not optimal and the pollution control results are still not solid,” they write. And: “For cities that have been unable to deal with their issues will be held accountable according to regulations.” We’ve previously written about the supervision wave that has swept over Beijing and the surrounding areas through April and May. Many of the violators of the past years have been smaller fish, but in the next 12 months the Enforcement Bureau of the Ministry of Ecology and Environment will go after the big ones. It’s director, Cao Liping, told Huanbao that the war has entered a critical period and any relaxation could spur a rebound in pollution. The new battle plan will involve 39 cities in the Beijing, Tianjin, Hebein region. (I realise we might previously have refereed to the 蓝天保卫战 with a different translation, but we’ll use Battle for the Blue Skies going forward, apologies for any confusion). It’s a fairly long read, which you can find her: 新一轮蓝天保卫战已打响生态环境部全员上阵 |
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In the lush green Beijing summer, one can easily forget that winter will be back. Maybe that’s why the Beijing Banking Regulatory Insurance Bureau (with an even less pronounceable acronym) is telling the cities financial institutions to continue to become greener. Last week, they released issued a circular reiterating that the cities' banks needs to form a mechanism for green credit coordination, specifically mentioning China Postal Bank and China Construction Bank. The circular contains a three point plan, the above being the first. Second: innovate in the realm of green financial products; and actually deploy those products to fitting industries, do the same with insurance products; and deploy those products as well - with special attention to the green building insurance program – find more on that here, via Paulson Institute. Third: move forward with the implementation and expansion of Environmental Liability Insurance in the city. And that’s it. Xinhua: 北京银保监局持续引导辖内金融机构大力发展绿色金融 |
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七, urging action: trillionaire edition |
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G20 is coming up and activists of all sorts are barging at the gates: “Investors managing more than $34 trillion in assets, nearly half the world’s invested capital, are demanding urgent action from governments on climate change, piling pressure on leaders of the world’s 20 biggest economies meeting this week.” That’s according to Reuters that have seen a letter from the concerned money men and women. Blackrock and Vanguard have not signed on. Reuters: Investors with $34 trillion demand urgent climate change action |
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Your annual global overview on the state of the worlds energy consumption and production is out from the data savvy people at REN21. Below is a two graph summary, ending on a positive one. You can browse through the whole thing here: Global Overview |
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Green bond issuance seems to be picking up. Last week saw five green bonds issued to the tune of 4.9 billion RMB. 105.72 billion worth of unlabelled green bonds were also issued. 盘点绿色债券 6.10-6.16 |
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This is the seventeenth issue of our Green Finance in China newsletter. The idea is to bring the latest in news, research, and opinion related to green finance in China to anyone interested. Please send tips and criticisms our way. You can also have a look at greenfinanceinchina.com where we'll host earlier editions, blog posts, and more. If you've been signed up to our newsletter by mistake please unsubscribe at the bottom of the email. |
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