China to issue principles for green bonds - Securities Times

China will issue principles for green bonds to build a unified criteria for domestic issuers, rushing to establish standards in a growing market in line with international norms, the official Securities Times reported on Thursday.

China will issue principles for green bonds to build unified criteria for domestic issuers, rushing to establish standards in a growing market in line with international norms, the official Securities Times reported on Thursday. The country aims to bring its emissions to a peak before 2030 and become carbon neutral by 2060, fuelling its green bond market to grow into one of the world's largest.

Green financial bonds, green debt financing instruments, and green corporate bonds will apply the new principles, while enterprise bonds — mainly issued by state-owned enterprises (SOEs) — will be excluded, according to the report. Currently, Chinese regulators have different definitions of green bonds, and standards for various products are different, such as the usage of proceeds and disclosure requirements, according to China International Capital Corporation (CICC).

Moreover, some domestic green bonds are not in line with international standards, resulting in them not being recognized by international investors. China issued 400.6 billion yuan ($59.4 billion) of green bonds and asset-backed securities in the first half of 2022, jumping 64% from a year earlier, pushing the total balance to 1.42 trillion yuan ($210.6 billion), the paper reported.

The principles will fully respect the prevailing international standards and will set basic rules for green bond issuers and related institutions based on domestic conditions, the paper said, citing people familiar with the case. The principles will continue to promote the convergence between domestic and international green bond market standards, it added.