The buzz around green finance is being incorporated into efforts by the United Kingdom to engage with China’s financial markets and maintain London’s status as a global financial hub, despite Brexit uncertainties.
In March, Lord Mayor of London Charles Bowman announced that the British and Chinese governments and private companies would invest up to 10 million pounds ($12.8 million; 11.3 million euros) in funding the new UK-China Green Finance Centre to conduct research in this field.
In June, Industrial and Commercial Bank of China listed a $1.58 billion green bond on the London Stock Exchange, the largest-ever listing of such a bond for the bourse.
Roger Gifford, chairman of City of London Corp’s Green Finance Initiative, says: “The opportunity for UK-China collaboration on green finance is huge, and the political commitment from both governments for this collaboration is critical.
“London is home to one of the largest global pools of international investors looking to invest in sustainable projects, and China has a big market for these projects. That’s a great commercial logic.”
UK-China green finance collaboration began in 2015, when Agricultural Bank of China raised $1 billion to invest in climate-friendly projects by listing a green bond on the London exchange.
This was viewed as a stamp of confidence for London’s green finance market, since it was the first green bond issued internationally by a Chinese bank.
In 2016, when China used its G20 presidency to put green finance on the international forum’s agenda for the first time, it called on the UK for support.
That year, the People’s Bank of China and the Bank of England co-chaired the G20 Green Finance Study Group. Central banks from other G20 countries also took part in the discussion.
Last year, the China-UK Green Finance Taskforce was established, with support from both governments. The task force gathered British and Chinese policymakers, banks and major green finance investors to share ideas on regulation and data disclosure and accelerate green finance solutions in countries taking part in the Belt and Road Initiative.
“It is this growing understanding and exchanges that have given the market a positive signal and created a confident environment for Chinese banks to issue green bonds in London,” Gifford says.
(China Daily European Weekly 12/07/2018 page28)