Chinese first green finance laws and regulations are implemented in Shenzhen Special Economic Zone

On March 1, chinese first green finance laws and regulations, and also the world's first comprehensive bill to regulate green finance-the "Shenzhen Special Economic Zone Green Finance Regulations" (hereinafter referred to as the "Regulations") were formally implemented. The "Regulations" propose that financial institutions are encouraged to set up branches, business departments, and business departments that specialize in green finance business.

According to the "Regulations", banking financial institutions should establish a green credit statistics system, and in accordance with the requirements of the national financial regulatory authorities, focus on statistics and analysis of green credit balances and proportions, default rates, green credit asset distribution and quality, and the environmental benefits of green loans.

In terms of products and services, the "Regulations" propose that banking financial institutions should promote new energy loans, energy efficiency loans, and contract energy management income rights pledge loans and other energy credit products. Innovate green credit products such as green supply chain, green parks, green production, green buildings, and personal green consumption.

Those who violate relevant regulations will also be punished. The "Regulations" clarify that For investment projects in the Shenzhen Special Economic Zone whose annual greenhouse gas emissions are expected to reach 3,000 tons of carbon dioxide equivalent, financial institutions shall conduct green investment assessments in accordance with regulations. If the assessments are not carried out, they shall be ordered to make corrections within a time limit and be fined between RMB 50,000 and RMB 200,000. In the event of ecological environmental damage that should be punished by administrative penalties other than warnings, a fine shall be imposed on the basis of 1% to 10% of the loan or investment amount.

The development of green finance in my country has been accelerating in recent years. After General Secretary Xi Jinping announced the carbon neutral goal last year, the Fifth Plenary Session of the 19th Central Committee of the Party, the Central Economic Work Conference and this year’s Central Bank Work Conference all made corresponding arrangements to accelerate the promotion of green low Carbon development and increasing financial support for green development are listed as key tasks.

In this context, the "Regulations" are jointly promoted and implemented by the Shenzhen People's Bank, the relevant departments of the Shenzhen Municipal Government and other central financial regulatory agencies in Shenzhen. At present, there is a sufficient market and institutional foundation.

It is understood that the balance of green loans in Shenzhen accounts for a relatively large proportion. As of the end of 2020, the balance of green loans by deposit financial institutions in Shenzhen's banking industry was nearly 350 billion yuan, a year-on-year increase of 16.8%, accounting for 5.1% of all loan balances. In addition, a survey conducted by the Green Finance Committee of the Shenzhen Special Economic Zone Finance Society found that more than half of the financial institutions in the sample have already carried out public environmental information disclosure. The supporting rules of the "Regulations" will be further improved in the next step.