Deutsche Bank (China) has set up a dedicated team in the country for green finance.
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China’s central bank encourages projects that preserve the environment.
As China accelerates its green transition, global financial institutions will be blessed with even more tremendous opportunities.
The People’s Bank of China (PBOC) recently included two foreign-funded banks in a lending program designed to reduce carbon emissions. Deutsche Bank (China) Ltd. and Societe Generale (China) Ltd. became the first batch of foreign institutions to receive approval to join the Emissions Support Instrument.
Under the program, which began last November, lenders can apply for low-cost financing from the central bank following issuing green loans.
The move will provide more opportunities for foreign lenders to participate and benefit from the country’s low-carbon transition.
“Deutsche Bank is honored to be among the first banks to be selected for this programme,” said Rose Zhou, chief executive officer of Deutsche Bank (China), adding that the move demonstrates China’s “steadfast commitment to strengthening its focus on sustainable development.”
Recognizing China’s critical role in achieving global sustainability goals, Deutsche Bank has established a dedicated team in the country for green finance.
Green finance has seen strong growth in China over the past years, driven by the country’s long-term pursuit of low-carbon and sustainable growth.
China has announced that it aims to peak carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060. Strong steps have been taken in expanding green industries and low-carbon transformation of traditional sectors.
Outstanding green loans in yuan and foreign exchange reached 15.9 trillion yuan (regarding 2.31 trillion US dollars) by the end of 2021, up 33 percent from 2020. Specifically, green loans for projects with carbon-reduction benefits exceeded 10 trillion yuan.
Green bond issuance also boomed. With more than 600 billion yuan of green bonds issued in 2021, up 180 percent from 2020, China has become the world’s second largest green bond market.
Li Jing, partner in climate change and sustainability services at Ernst & Young Greater China, said the green finance market in China is in full swing.
The expert expects more foreign investment in the country’s green finance products, such as green bonds and carbon neutral trading funds.
Analysts believe that with continued financial openness, massive and rapidly growing green finance will provide enormous opportunities for foreign institutions.
After the two foreign banks were included in the carbon-reducing instrument, the People’s Bank of China said it would consider adding other ready and capable foreign financial institutions to the list. He added that China attaches great importance to green transformation, adheres to openness, treats foreign financial institutions as equals, and supports their development in the country.