Media release
For immediate release: 24/03/2014

Groundbreaking report outlines key recommendations for Chinese
policymakers on how to grow a green bonds market in China, tapping into
ongoing financial reform
Accompanied by the step by step ‘How to issue a green bond’ guide for issuers

Beijing, 24 March 2015 - Today at an event in Beijing, the Climate Bonds Initiative, IISD and Renmin
University’s Chongyang Institute launched a landmark report Growing a green bonds market inChina: key recommendations for policymakers in the context of China’s changing financial landscape.
The action-oriented paper was undertaken in conjunction with the Financial Research Institute ofthe Development Research Centre of the State Council (DRC-FRI). It is accompanied by astraightforward 5 step “how to” guide for green bond issuers in China (Available in English andChinese).
The reports are anchored in the Chinese context, evaluating the current state of play of China’s bondmarkets and how the short-medium term financial reforms may provide an opportunity for green
bonds to emerge. They provide a range of specific, action-oriented recommendations for China’spolicymakers on how to grow a green bonds market in China. These policy options are gaining
traction amongst top policymakers in China: many of them are included in recent policy agenda
drafts from the China State Council’s Development Research Centre and working groups of thePeople's Bank of China.
The reports complement the synthesis paper on Greening China’s Financial System launched at theChina Development Forum on Saturday, by offering more detailed recommendations specific togreen bonds.
Sean Kidney, CEO of the Climate Bonds Initiative and co-author of the report said: ‘The substantialcommitments China has made to reform its bond markets are exciting from a financial and economic
perspective, but also from an environmental one, as they increase the opportunity to utilise thebond market to finance the transition to a low-carbon/green economy in China.’‘Policymakers are considering how to facilitate green bonds in the design of the market. Pushingongoing changes in a green direction is much easier than attempting changes to established systems’
Beate Sonerud, Policy Analyst at the Climate Bonds Initiative added: ‘China is grappling withenvironmental challenges that are different to those of the mature economies in Europe and the US.
While climate change is high on the agenda in China too, the green challenge here is much broader:for example air pollution, contaminated soil and clean water. Green bonds will be part of thefinancing solution to those challenges.’
Sean Kidney added: ‘The excellent opportunity to integrate green bond market development withongoing debt capital market reform is ripe in many emerging markets beyond China. Countryspecific policy guides for green bonds can assist policymakers that are currently reforming their debt
capital markets on how to take advantage of the excellent opportunity to design the bond market
for green bonds from day one.’

Highlights from the reports:
 China’s particular environmental challenges and financial system means China-specific definitions
for green bonds are recommended. These can build on definitions and standards for green
investment already developed by the China Banking Regulatory Commission’s Notice on Filing andReporting in Green Credit Statistics Forms..
 A new entity, “Green Bond Market Development Committee”, should be set up to review existingand forthcoming green standards and regulations.
 A green bond verification system can use the structure of 3rd party, independent, governmentapproved verification entities used both under the local emissions trading schemes in China andthe National Energy Savings scheme. This could include establishing an independent, governmentapproved verification supervisory entity for green bonds, and expand the oversight of credit rating
agencies and auditors to cover green definitions.
 Establish a central fund to provide partial credit guarantees for green municipal revenue bonds
and green public-private partnership project bonds transitioning to full credit transparency.
 Provide corporate tax credits for interest earned on green enterprise bonds (from state ownedenterprises), corporate bonds and medium-term notes.
 Establish green investment quotas through the expansion of the programs for foreign investors inthe bond market (R-QFII and QFII).

---------------------------------------------ENDS--------------------------------------------For more information or to arrange interviews, please contact:
Rozalia Walencik, Communications, Climate Bonds Initiative, rozalia@climatebonds.net +44 772 3828954
Sean Kidney, CEO, Climate Bonds Initiative, sean@climatebonds.net, +86 152 0144 0391,+44 75 2506 8331
About Climate Bonds Initiative: The Climate Bonds Initiative is an investor-focused not-for-profit. It
is the only organization in the world focusing on mobilizing the USD 100 trillion bond market forclimate change solutions. Projects include developing proposals for the European Commission’s DG
Climate on Europe’s role in mobilizing private sector capital for climate solutions; helping organize aGreen Bonds workstream for the UN Secretary-General’s Climate Summit and the International
Standards and Certification Scheme.
The Initiative advises development banks, investors, governments and NGOs about structuring
programs to maximize the leverage of public sector resources. That includes green investmentbanks, green securitization and “sustainable financial solutions” for large-scale energy efficiency
schemes.
www.climatebonds.net
For Chinese language how-to: www.climatebonds.net/china@ClimateBonds