ESG News |June

Selected Monthly ESG News

Carbon Finance

Europe bans the publication of misleading carbon neutrality claims

On June 4th, at the plenary session of the European Parliament in Strasbourg, the European Parliament passed new rules aimed at increasing product durability and combating 'greenwashing' behaviors. The new regulations prohibit companies from making misleading advertisements and vague carbon neutrality claims. The approved content by the European Parliament stipulates that companies will be prohibited from using environmental statements such as 'eco-friendly,' 'natural,''biodegradable,''carbonneutral,' or 'zero carbon' without detailed evidence. Additionally, the new rules also prohibit environmental claims based solely on carbon offsetting plans, as well as other misleading practices.

Germany Launches €50 Billion Industrial Decarbonization Subsidy Program

Germany has launched a 50 billion euro industrial decarbonization subsidy program called Carbon Contracts for Difference (CCfD). This is a 15-year subsidy program aimed at helping companies in energy-intensive industries invest in low-carbon production processes and technologies. The new program aims to address the high costs and investment risks that hinder companies from investing in decarbonized manufacturing. The program will provide a "climate protection agreement" to protect companies from "price risks" associated with operating low-carbon facilities compared to their competitors who use traditional fossil-fuel based business operations. The program targets medium-sized enterprises with annual emissions of over 10,000 tons. Other criteria include being in an emissions-intensive industry such as steel, chemicals, and cement, and investing in systems that emit at least 90% less than the current system.

Sustainable Investments

Bank of China assists Asian Infrastructure Investment Bank in successfully issuing 2.5 billion yuan worth of sustainable development Panda bonds

On June 8th, Bank of China acted as the lead underwriter and book-runner for the successful issuance of 2.5 billion yuan worth of sustainable development Panda bonds for the Asian Infrastructure Investment Bank with a 5-year term and a coupon rate of 2.70%. The subscription rate for this issuance was nearly 2 times the total amount, with nearly 20 investors participating, including state-owned banks, joint-stock banks, foreign banks, rural commercial banks, and funds. The enthusiasm for participation has set a new high for similar bonds recently. This issuance is the second sustainable development bond issued by the Asian Infrastructure Investment Bank in China this year, and the funds raised will be used to support sustainable infrastructure development.

Carbon Growth Partners Raising $200 Million for Carbon Credit Fund

On June 6th, Carbon Growth Partners (CGP), an Australian carbon market investment company, announced that it plans to raise $200 million for its reopened Carbon Growth Fund to invest in global carbon credits and carbon offset projects. The Carbon Growth Fund was launched in May 2022 and announced its first close in November, raising $32 million. The company is now reopening the fund and expects to raise $20 million by the end of this month and $200 million by mid-2024. Prior to this, the company announced that its original fund, the Carbon Growth Opportunities Fund, has generated a return of 17% since its launch in 2021, outperforming other major asset classes such as cash, stocks, bonds, gold, and cryptocurrencies.

Green Finance

Zijin Rural Commercial Bank cooperates with the Jiangsu branch of China Development Bank to issue the first green finance transfer loan

According to Xinhua Daily on June 8th, Zijin Rural Commercial Bank and the Jiangsu branch of China Development Bank cooperated to issue the first green finance transfer loan of 80 million yuan. This is the first green finance transfer loan issued by a rural commercial bank in the province in collaboration with the Jiangsu branch of China Development Bank. The transferred loan funds will mainly be invested in environmental protection, energy conservation, clean energy, green transportation, green buildings and other project areas. This is the first time that the two parties have joined hands to assist in environmental governance, respond to climate change and build resource-saving enterprises.

Within the year, commercial banks issued over 240 billion yuan of green finance bonds, a year-on-year increase of over 88%

According to data from Wind Information, commercial banks have issued 243 billion yuan of green finance bonds since the beginning of this year, an increase of 88.26% compared to the same period last year. In addition to actively issuing green finance bonds, the green and low-carbon industry has also become a hot direction for bank credit investment. Recently, the People's Bank of China released the first-quarter financial institution loan statistics report for 2023, which showed that the balance of green loans denominated in both domestic and foreign currencies reached 24.99 trillion yuan, ayear-on-year increase of 38.3% by the end of the first quarter of 2023. Among them, loans directed towards projects with direct and indirect carbon reduction benefits were 9.19 trillion yuan and 7.47 trillion yuan respectively, accounting for a total of 66.7% of green loans.