China gets serious about green finance
Its ambitions require an estimated $1 trillion annual spend and only 10% to 15% of this will be met by the government.
If China hopes to make good on the promise that its carbon emissions will peak by 2030 and it will achieve net zero or carbon neutrality by 2060, then it’s going to need to attract private capital to finance green investments – and quickly. Its ambitions require an estimated $1 trillion annual spend and only 10% to 15% of this will be met by the Chinese government.
The nation finds itself in an entirely different position to Europe, where the growth in green finance has been driven by investor demand and the government response – in the form of regulation and a taxonomy – has followed.
Similarly, in the US green finance has been driven by the buy side, although there, regulatory follow-up is only now emerging.
Attracting private investment seeking green outcomes is not going to be easy for China no matter how much government intervention there is.
According to recent research from Standard Chartered, when it comes to sustainable investments, the world’s largest asset managers remain focused on North America and Europe.
Almost two thirds of investors are putting money to work in the two regions – despite over half of all investors surveyed admitting outperformance in China.