The China Banking and Insurance Regulatory Commission (CBIRC) issued the green finance guidelines for banking and insurance sectors, along with related questions and answers (Q&As) on the guidelines. These guidelines shall come into force on the date of promulgation.
The guidelines clarify green finance supervision responsibilities of CBIRC and its local offices to strengthen the guidance and assessment of green finance business of banking and insurance institutions. The guidelines require banking and insurance institutions to:
- thoroughly implement the new development philosophy, promote green finance from a strategic standpoint, increase support for a green, low-carbon and circular economy, prevent environmental, social and governance (ESG) risks, improve their own ESG performance, and promote an all-round green transition of economic and social development.
- establish a green finance organization and coordination mechanism, also encouraging them to carry out innovation in the green finance system.
- seek progress while maintaining stability, adjust and improve credit policies and investment policies, and actively support the building of a clean and low-carbon energy system, particularly in the areas of energy conservation, pollution reduction, carbon reduction, green enhancement, and disaster prevention of key industries and fields.
- strengthen process management of investment and financing activities, conduct due diligence on credit extension and investment, strengthen the management of credit and investment approval, urge clients to strengthen ESG risk management by refining contract terms, and improve post-loan and post-investment management.
- improve green finance management, adopt differentiated and convenient management measures, and optimize the ESG risk management of financing, online financing, and other businesses for micro and small enterprises.
- strengthen internal control management and information disclosure, establish a green finance assessment and evaluation system, implement incentive and restraint measures as well as the mechanism of exempting liabilities after fulfilling duties, to ensure the sustainable and effective development of green finance.
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Keywords: Asia Pacific, China, Banking, Insurance, Green Finance, Climate Change Risk, ESG, Sustainable Finance, Guidelines, Disclosure, CBIRC
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
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