Roadmap for China: Green Bond Guidelines for the Next Stage of Market Growth
This paper sets out a roadmap for the next steps of the green bond guidelines in the Chinese domestic green bond market, with the aim of harmonizing these guidelines with international practice.
To develop a roadmap for China’s guidelines, the paper uses the following framework:
Step 1: Current green bond guidelines released by China: What do they say?
Step 2: What is the international practice in the area? How does this compare to China’s guidelines?
Step 3: Roadmap to achieving harmonization between China’s green bond guidelines and international practice.
This framework has been applied to each segment of China’s current green bond guidelines: Green Definitions, Management of Proceeds of green Bonds, External Reviews and Assurance, and Reporting and Disclosure requirements.
Findings: The current state of harmonization is good. The table overleaf outlines the current state of harmonization and clearly shows that there is strong alignment in most areas. In particular, full alignment already exists for Management of Proceeds and Reporting and Disclosure guidelines. External Reviews and Assurance guidelines are closely aligned, with China taking early steps to strongly encourage the use of independent verification. Further efforts to harmonize the green bond guidelines should focus primarily on Green Definitions, with particular emphasis on development of Sector-Specific Criteria and the Basis for Criteria.
This is the first paper in a series of four discussion papers issued by IISD and the Climate Bonds Initiative on prospects for the Chinese green bond market.
The four papers are:
- Roadmap for China: Green Bond Guidelines for the Next Stage of Market Growth (Paper 1)
- Roadmap for China: Scaling up Green Bond Market Issuance (Paper 2)
- Roadmap for China: Green Securitisation, Tax Incentives and Credit Enhancements to Scale Green Bonds (Paper 3)
- Roadmap for China: Extending the Joint Leadership on Green Finance (Paper 4)
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