Speaking at the Roundtable of the China Development Forum on March 21, 2021, the Governor of the People’s Bank of China (PBOC), Yi Gang, outlined the central bank’s green finance priorities over the near- to mid-term. Governor Yi began by highlighting China’s goal of reaching peak carbon emissions by 2030 and achieving carbon neutrality by 2060 (the “30/60 goal“), and noted that China currently leads the world in the value of outstanding green loans at about US$2 trillion.

Amidst this background, Governor Yi indicated that the PBOC has identified green finance as a priority for 2021 and the next five years. He discussed, among other things, the following specific initiatives relevant for a variety of financial institutions (FIs):

• improving the taxonomy of green finance,  including by working with European counterparts to announce a common taxonomy later this year;
• strengthening information disclosure, including by developing a mandatory disclosure system;
• incorporating climate change into the policy framework, possibly through climate stress testing, and exploring the role of monetary policy as a means of encouraging FIs to support emissions reductions;
• encouraging FIs to proactively deal with climate change risks, including by asking some pilot FIs to measure their carbon emissions and the climate risks of their projects, and extending the existing quarterly green credit assessment for banks to include additional FIs; and
• deepening international cooperation, including through coordination with other G20 members.

Governor Yi concluded by noting that the PBOC “will continue to support green and high-quality development, and contribute its share to the 30/60 goal.”