The First GBA GSFS Held to Co-build New Ecosystem for Sustainable Finance
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The high-profile first Greater Bay Area Green and Sustainable Finance Summit closed in Shenzhen on November 16, 2022. Notable attendees include officials from Shenzhen and the HKSAR government, experts from the United Nation Development Programme (UNDP), and chairpersons of CASVI. The summit, with the theme of “Greening for a Better Greater Bay Area, Financing for a Sustainable Future,” had a main forum and four parallel sub-forums. Combining leading ideas and actions, it focused on sustainable finance topics covering the Guangdong- Hong Kong- Macao Greater Bay Area’s new achievements in green finance, China’s cutting-edge practices of impact investing, and a new journey for ESG investing and information disclosure. More than 100 government representatives, industry leaders, corporate executives, experts and scholars gathered to share their forward-looking reflections and actions on sustainable finance and exchanged opinions on the subject. Yao Ren, Deputy Secretary-general of Shenzhen Municipal People’s Government, congratulated the opening of the summit and expressed his hope for the development of sustainable finance in the Greater Bay Area, saying, “Shenzhen is an important financial center in China, and it is also the first to set out the aim for a global hub for sustainable finance. Taking this summit as an opportunity, we look forward to further communicating with experts, scholars and industry representatives and continue to strengthen cooperation with other cities in the Greater Bay Area in terms of green finance so as to produce more innovative experience and achievements that can be replicated and promoted.”
Yao Ren, Deputy Secretary-general of Shenzhen Municipal People’s Government, makes an opening address. Anchoring the Dual Carbon Goals to Promote a New Journey of Sustainable Finance Sustainable development cannot be divorced from the support of finance. As China’s pioneer in pushing forward the double carbon goals and green development, the Greater Bay Area bears the mission of innovating sustainable finance. Particularly, Hong Kong and Shenzhen, two international financial cities, have leveraged their advantages to gain considerable experience that leads in the country. Christopher Hui Ching-yu, Secretary for Financial Services and the Treasury of the HKSAR, said that as an international financial hub, Hong Kong could guide international funding for high-quality green projects to contribute to China’s double carbon goals, and Hong Kong would make every effort to reach carbon neutrality by 2050 and transit to a green economy.
Contrary to common belief, the key issue in allocating resources to achieve the SDGs is not one of availability of funding, but how finance is being prioritized. UNDP Resident Representative for China Beate Trankmann said, “Just around 1 percent of global financial assets would be enough to finance the global energy transition. This is not a cost. This is an investment in our collective future.” [1]
Developing sustainable finance is vital for closing the outstanding funding gap for sustainable development. Ma Weihua, Member of SDG Impact Global Steering Group and Chairperson of CASVI, said that sustainable finance is the only solution to fundamentally change the extensive growth mode, to balance economic, social and environmental benefits, to align economic values with social values, and to deliver innovative, coordinated, green, open and shared development.
The rapid growth of sustainable finance results from the urgency to fund sustainable development worldwide. Therefore, international cooperation to better push for a stable sustainable finance market has become a global topic of interest. Sir William Russell, Co-chair of the UK-China Green Finance Taskforce and the 692nd Lord Mayor of the City of London, said, “Climate change is a global challenge that requires a global response. That is why we are actively partnering with not only UK-based institutions but also global partners to create synergy to ramp up green and sustainable finance.”
The idea of sustainable finance is being promoted across China in a top-down manner, driven by the concept of sustainable development and the double carbon goals. Guests at the summit discussed green finance, ESG investing, impact investing and other theme-related hot topics based on the cutting-edge trends and latest practices in China. Ma Jun, Chairperson of China Green Finance Committee, President of Beijing Green Finance Research Institute, Rotating Chairperson of Guangdong-Hong Kong-Macao Greater Bay Area Green Finance Alliance and Chairperson of CASVI, who participated in and witnessed the development of China’s green finance system, said the G20 Sustainable Finance Working Group in 2021 agreed to develop a framework for transition finance to urge GHG-intensive sectors and firms to set credible reduction targets and implementation paths.
Focusing on the opportunities and challenges on the road to decarbonization, Zou Ji, CEO and President of Energy Foundation China, pointed out that investment, green consumption and trade potential are the new “troika” to drive the economy. Moreover, growth, energy security and climate change have highly overlapping goals, so many things can be achieved in one stroke.
Yao Yang, Dean of Peking University National School of Development and Chairperson of CASVI, noted that as the sustainable development agenda becomes mainstream worldwide, China’s future economic growth hinges on the commitment to this global consensus.
Against the background of the “Chinese path to modernization,” Shenzhen, a forerunner in sustainable finance, must set the example. Wang Ping, Chairman of YouChange China Social Entrepreneur Foundation and Chairperson of CASVI, suggested that: First, change the underlying logic of traditional finance to integrate financial, social and environmental capital. Second, explore more progressive standards for judging and identifying values. Third, replace the current “Corporate Social Responsibility Report” with the “Corporate Social Value Report” to encourage firms to create social value endogenously. Fourth, serve more small and medium-sized enterprises.
Fostering a Community to Develop a New Ecosystem for Sustainable Finance Looking into the future, building a commonly thriving, benign financial ecosystem is vital for a higher capital allocation efficiency. Through four sub-forums, including Investing for Green, Investing for Good, Investing with Transparency and Investing for Innovation, the summit brought together innovative practices and reflections to map out the blueprint for the future of sustainable finance. At the Investing for Green sub-forum, Director of Shenzhen Municipal Financial Regulation Bureau He Jie said, “Shenzhen is a global leader in financial technology. We apply many financial technologies to green finance, such as creating smart and public service platforms to meet the market’s needs.”
He Jie, Director of Shenzhen Municipal Financial Regulation Bureau, delivers a keynote speech.
The tide of business for good has offered significant opportunities for impact investing. At the Global Impact Investing Leaders Dialogue, a session of the Investing for Good sub-forum, guests from across the world exchanged opinions on impact investing’s development at home and abroad, as well as on the problems China faced in practicing impact investing. Fabienne Michaux, Director of UNDP SDG Impact, said impact investing is the ability to invest in ways that intentionally deliver a positive impact on society while guaranteeing a certain financial return. The key lies in the intention to promote social and economic development, as well as in measurable social impacts.
Maud Savary-Mornet, Senior Advisor for South-East Asia of the Global Impact Investing Network (GIIN), further stressed the importance of gauging environmental and social impacts. Setting universal, benchmarking industry indicators and standards will help everyone clearly understand impact investing, such as its efficiency, scale and size, she said.
With rapid development opportunities for ESG in China, relevant standards and policies have been rolled out faster, and the ESG disclosure system is growing mature. At the Investing with Transparency sub-forum, which centered on the present situation of information disclosure at home and abroad, guests talked through new development in global ESG standards and disclosure, as well as China’s innovative practices of ESG investing and financing. In his closing remarks, Qin Shuo, founder of Chin@Moments and Chairperson of CASVI, shared four suggestions for firms to practice commercial civilization: First, fulfill corporate social responsibility; second, implement responsibilities through investing, including socially responsible, ESG and impact investing; third, innovate charity; fourth, internalize social responsibility and incorporate social value into long-term strategies to create shared value.
Sustainable development is a universal endeavor and pursuit. China always attaches importance to the global cooperation of sustainable finance and plays a leading role in transnational collaboration, international platform development and universal standard research. At the Investing for Innovation sub-forum, guests contributed insights on new trends, such as overseas sustainable finance elements empowering the innovative development of the Greater Bay Area. Releasing Innovative Achievements to Lead the New Direction of Sustainable Finance Thanks to concerted intellectual efforts, China’s sustainable finance satisfied expectations with vibrant actions and fruitful results. A range of research achievements were released at the summit, including The Value of Impact Investing for China’s of Double Carbon Goals (2022), Value Creation: Social Value Investment Research Report 2022, Shenzhen Green Finance Development Report (2021), Report on Environmental Benefit Disclosure of Green Bond in the Greater Bay Area, Insights on Environmental Information Disclosure: Practices and Explorations in the First Year, and Social Impact Investment Brochure. Wang Si, Deputy Secretary General of CASVI, gave an in-depth interpretation of The Value of Impact Investing for China’s of Double Carbon Goals (2022) at the release session. The report aims to discuss impact investing’s potential value for China to deliver its double carbon goals, as well as to gather a wider community to boost high-quality double-carbon-related investing and financing.To achieve dual carbon goals, impact investing plays a part and addresses challenges chiefly by creating value and developing ecosystems, according to the report.
What kind of social enterprises do we need to meet the challenge of sustainable development? The Social Value Assessment for Social Enterprises—Group Standards was launched at the summit. Based on the concept of value creation, the Standards will establish procedures and an indicator system for assessing the social value created by social enterprises, holding great significance for sound and orderly impact investing. Social Impact Investment Brochure, another research on impact investing released on the same day, provides a forward-looking interpretation of the global updates and trends to help stakeholders understand the future of sustainable finance.
Aiming to “connect the world with the Greater Bay Area as the core,” the first Greater Bay Area Green and Sustainable Finance Summit helped develop Shenzhen into a sustainable finance hub and communicated sustainable finance innovation and practices domestically and globally. The event also gathered a broad community to create and boost a sustainable finance ecosystem. It was a successful exchange of ideas from different sectors, and it will be a new starting point for sustainable finance in China. [1]Source: https://www.irena.org/news/pressreleases/2021/Jun/IRENAs-World-Energy-Transitions-Outlook-Re-Writes-Energy-Narrative-for-a-Net-Zero-World |
Sir William Russell, Co-chair of the UK-China Green Finance Taskforce and the 692nd Lord Mayor of the City of London, addresses the summit
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