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China’s new green bond rules and sustainable investment

New green bond rules were created last month in China, the first nation to adopt guidelines on transparency and use of funds for investing in sustainability project using green bonds. China’s new Green Bond Guidelines and the Green Bond Endorsed Project Catalogue revolve around six key concepts:

  • energy savings,
  • pollution prevention,
  • resource conservation and recycling,
  • clean transportation,
  • clean energy and ecological protection, and
  • climate change adaptation.

The new guidelines cover environmental issues pertinent to China, such as air pollution prevention and source pollution control; they also allow clean coal. In this respect they differ from other international standards, which prohibit the use of any fossil fuels in green bond financing. While traditionally, Europe and the U.S. have been heavily focused on green bond markets, China’s new guidelines indicate the growth of the green financing market internationally.

The Green Bond Guidelines and Project Catalogue will encourage more capital in the private sector for financing green investments in China. This will provide more support for transforming China to a greener economy.

You can read more about China’s potential to become a major force in the green bond market here.