Our reporter (chinatimes.net.cn) Fu Bizhen reports from Beijing.
At present, the global protection of biodiversity faces a huge funding gap. With the rapid development of green finance in China, more and more financial institutions have realized the importance of biodiversity and accelerated the pace of product innovation in related fields.
Recently, Huzhou City, Zhejiang Province issued the "Implementation Opinions on Financial Support for Biodiversity Protection" (hereinafter referred to as "Implementation Opinions") to explore the establishment of a green financial service system suitable for biodiversity protection.
On the other hand, it can not be ignored that financial institutions are still facing many problems in participating in biodiversity protection. How to guide more funds into it and make financial institutions such as banks get more reasonable comprehensive returns needs further exploration.
Finance supports biodiversity.
According to the prediction of the secretariat of the United Nations Convention on Biological Diversity, by 2030, the global annual capital demand for biodiversity protection will be about 711 billion US dollars. But at present, the annual capital investment in related fields is only $143 billion. Moreover, nearly 80% of the funds depend on government departments.
It can be seen that the protection of biodiversity is facing a huge funding gap, and financial institutions and social capital are urgently needed to participate.
In October 2021, the first phase of the 15th meeting of the Conference of the Parties to the United Nations Convention on Biological Diversity (COP15) was held in Kunming, Yunnan. China took the lead in setting up the Kunming Biodiversity Fund with a capital of 1.5 billion yuan. The second phase of COP15 will be held in Montreal, Canada in December this year. How to introduce the power of financial institutions to participate in biodiversity protection is also one of the important topics of the meeting.
"Capital investment is an important basic guarantee for deepening the battle against pollution. The Ministry of Ecology and Environment adheres to the principle of "grasping with both hands". On the one hand, it actively strives for the public welfare support of financial funds, on the other hand, it actively guides the market-oriented support of financial funds. " Zou Shoumin, director of the Science, Technology and Finance Department of the Ministry of Ecology and Environment, said this at the regular press conference held by the Ministry on August 23rd.
In guiding financial support, Zou Shoumin introduced that since the second half of 2021, the eco-environment department has established cooperation mechanisms with 10 financial institutions, including China Development Bank, China Agricultural Development Bank and China Bank, established a repository of eco-environmental financial support projects, and issued the "Guidelines for the Storage of Eco-environmental Financial Support Project Repositories (Trial)" to support projects in eight major areas, such as air, water and soil pollution prevention, and guided financial institutions to provide more accurate financial support. The Ministry of Ecology and Environment screened out projects with good environmental and economic benefits and regularly pushed them to the above 10 financial institutions. In July this year, the first batch of 139 projects were pushed, and projects will be pushed to financial institutions regularly every two months.
In the field of biodiversity protection, banks and other financial institutions are also actively involved in continuous product innovation.
In terms of ecological restoration of abandoned mines, Huzhou has developed green financial products such as "green mine loan" and "pledge loan for comprehensive utilization of mining rights", providing a total of 3.86 billion yuan of green financing, supporting the restoration of 382 abandoned mines such as the "Dragon Dream" super-large tourism complex project and Changxing "Golden Nail" national geological nature reserve, with 25,000 mu of green and 31,000 mu of reclaimed farmland, thus becoming a national-level green mining development demonstration zone.
Huzhou guides state-owned banks such as workers, peasants and China Construction Co., Ltd. to carry out syndicated cooperation with CDB, and supports the first ecological transformation project of bamboo forest carbon sink in China by introducing low-cost green financial funds, so as to change 180,000 mu of abandoned bamboo forest from carbon source to carbon sink and promote ecological balance.
Anji county, Huzhou city is rich in bamboo resources, but in recent years, with the decline of bamboo prices and the lack of labor, the phenomenon of bamboo forest abandonment has appeared. In order to solve this problem, Anji Rural Commercial Bank innovated the loan model and launched the first "bamboo forest carbon sequestration pledge" loan in China. At the end of last year, Anji County also established the first bamboo forest carbon sink trading center in China. According to the relevant person in charge of the Green Finance Division of Anji Rural Commercial Bank, the reporter of China Times told me that up to now, Anji Rural Commercial Bank has invested more than 200 million yuan in bamboo forest carbon sink series loans.
For another example, Huzhou Branch of Industrial and Commercial Bank of China has also actively raised funds for friendly biodiversity conservation projects this year. According to the person in charge of the bank’s green finance department, the bank told the reporter of China Times that the bank provided 200 million yuan of credit financing for Taihu Forest Park in Changxing County, which supported the construction of 4,890 mu of high-efficiency seedlings, flowers and fine fruit and wood planting base. As of the first half of this year, Huzhou Branch of ICBC has invested 6 billion yuan in key biodiversity projects and supported about 20 projects.
In terms of supporting biodiversity protection, Huzhou Branch of Industrial and Commercial Bank of China gives preferential pricing to loans, which is usually 100 BP lower than other projects.
How to solve the difficulties
According to Huang Dingwei, deputy director of Huzhou Financial Office, there are several difficulties in the current financial support for biodiversity projects: First, the effects of biodiversity are difficult to internalize and the economic effects are difficult to reflect in a short time; Second, the impact of the project on biodiversity is difficult to assess; Third, the construction of relevant systems is lagging behind, and so on.
Huang Dingwei told the reporter of China Times that in view of these problems, the Implementation Opinions clearly divided the scope of biodiversity protection and drew a map of key areas for biodiversity protection, providing a clear reference for financial institutions. At the project level, fully respect the principle of commercial sustainability, compile a catalogue of biodiversity-sensitive industries and a list of biodiversity-friendly projects, coordinate the protection and restoration projects of important ecosystems such as forests, wetlands, rivers and lakes, and strengthen the financing docking between banks and enterprises. .
Bai Yiwen, vice president of Beijing Institute of Green Finance and Sustainable Development, told China Times that with reference to international experience, soft loans from government funds and some international organizations will begin to attach importance to biodiversity conservation projects, and commercial financial institutions can cooperate with them to carry out mixed financing to reduce the capital cost of supporting biodiversity-friendly projects. In addition, China is currently establishing a diversified ecological compensation mechanism to enable the main body of ecological services to benefit. In addition to the traditional financial transfer payment and regional transfer payment, the ecological compensation mechanism can also adopt market-oriented means.
"At present, there are still many financial institutions that have not realized that although they have not directly affected biodiversity, they have indirectly harmed biodiversity by providing financial services such as investment, insurance and loans for companies and business activities that destroy the ecology. Therefore, how the regulatory authorities guide the financial industry to support biodiversity conservation will become the key. " Shi Jianping, chairman of the International Institute of Green Finance of the Central University of Finance and Economics, told the reporter of China Times.
Shi Jianping pointed out that to further enhance financial institutions’ support for biodiversity, first of all, explore the feasibility and specific plans of incorporating biodiversity indicators into a comprehensive risk management system; Secondly, biodiversity protection should be included in the green sustainable development planning and strategic measures at the level of financial institutions; Finally, promote the perfection and innovation of biodiversity-related green financial product system: on the one hand, we can consider adjusting and optimizing traditional green financial products such as debt financial products to include biodiversity protection factors; On the other hand, with the rapid development of equity financial products, including private equity funds and impact investment funds, the concept of biodiversity can be included in ESG investment strategies.
Green finance, including supporting biodiversity, is also an important part of financial supply-side reform.
Shi Jianping told the reporter of China Times that at present, China’s real economy is in a critical period of green transformation and high-quality development. In this process, it is inseparable from the service and support of the financial industry, especially green finance. Therefore, supporting and promoting the development of green finance is not only the requirement of promoting the reform of financial supply side, but also the inevitable result of "transfusion" to the real economy and helping China’s high-quality economic development.
In the first half of 2022, China’s green credit reached 19.55 trillion yuan, accounting for only 9.47% of the balance of local and foreign currency loans. According to the green bond database of Green Finance International Research Institute of Central University of Finance and Economics, by the first half of 2022, the scale of new green bonds issued in China and abroad was about 503.963 billion yuan, the scale of new unlabeled green bonds issued in China was 878.412 billion yuan, and the stock of green bonds in China and abroad was about 2.1 trillion yuan.
Shi Jianping said that through the incentive and restraint mechanism, as well as the innovation of financial instruments such as green bonds, green insurance and green trusts, green finance guides the flow of funds to green and low-carbon fields, and gives direct financial support to the development of related industries, technological upgrading and consumption, thus injecting new impetus into industrial development, technological innovation and consumption upgrading.
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