Core content summary:
The total amount of green credit in China is relatively high and the growth is stable. At present, China’s green credit balance ranks first in the world, increasing to 13.03 trillion yuan in the first quarter of 2021. The quality of green credit assets is obviously better than that of commercial banks. In the past few years, the non-performing rate of green credit has remained below 0.8%; Green loans are concentrated in infrastructure upgrading and clean energy industry. The main lenders are concentrated in large state-owned banks, and their green credit balance accounts for more than half; The environmental benefits of green credit have gradually emerged. 21 major banking institutions are expected to save more than 400 million tons of standard coal and reduce more than 700 million tons of carbon dioxide equivalent every year; The green credit evaluation system is rich, which is not only included in the macro Prudential evaluation system, but also included in the scope of collateral operated by the central bank’s monetary policy.
At present, China’s green credit development faces four major problems. First, green credit accounts for a small proportion of the total credit scale. Except for policy banks and large state-owned banks, the participation of other commercial banks is not high. By September 2021, green credit accounted for only 7.6% of the total credit scale, less than one tenth of the credit scale, and green credit was concentrated in policy banks and large state-owned banks. Second, there is no unified, clear and measurable standard for green credit. Internationally, green credit is generally based on the “Equator Principle”. At present, seven banks in China have joined the equator principle, and the rest have not joined, resulting in inconsistent standards. In addition, the definitions of green projects and green products in China are not unified. For example, green bonds and green credit follow the green industry guidance catalogue of 2021 and 2019 respectively. Green project evaluation and information disclosure are also different from international standards, and quantitative indicators are not used for project screening. Third, the green transformation industry has not received enough support from green credit. Thermal power, steel, coal and other industrial enterprises have not yet become the main targets of green loans. Fourth, green credit products are not abundant. There are relatively few innovative products such as green transformation loans and green consumer credit, and there are problems in the existing pilot projects such as green building credit.
Green credit should seek breakthroughs in five aspects. First, establish standards with Chinese characteristics in line with international standards. On the one hand, promote China’s green credit industry directory to be in line with international standards and in line with the development characteristics of China’s green industry. On the other hand, it is necessary to gradually change the current practice of regulators simply dividing green credit standards by industry directory, and improve the green credit evaluation system. Second, expand coverage and support green transformation and dual carbon strategy. Promote green credit investment in green and clean industries, encourage banks to provide funds for green transformation of iron and steel, petrochemical, chemical, nonferrous metals, building materials, textile, papermaking, leather and other industries, and issue green transformation loans. Third, enrich green credit products. Learn from the successful experience of developed countries, develop carbon financial products and green agricultural loans, and vigorously develop personal green consumer credit, such as green housing mortgage loan and automobile consumer loan. Fourth, introduce green credit incentive policies to improve the enthusiasm of commercial banks. In addition to the traditional financial subsidies and tax relief, commercial banks should also be encouraged to support the financing needs of environmental protection enterprises at preferential interest rates. It is suggested that the government should make appropriate compensation for the credit risk caused by credit pressure drop and withdrawal in line with the adjustment of national environmental protection policies. It is suggested to reduce the weight of green credit in the calculation of risk assets from 100% to 75% or even 50%, so as to improve the enthusiasm of banks for green credit. Make good use of carbon emission reduction support tools to promote the growth of credit and investment in clean energy and other fields. Fifth, promote the standardized development of the regulatory system.
Promote a more standardized official statistical system, strengthen the supervision and inspection of the implementation of green credit, give play to the external supervision role of non-governmental organizations, gradually improve the legal system of green finance, do a good job in risk prevention of green finance, and prevent green credit from becoming a new source of risk.
(Shanghai Shenyin Wanguo Securities Research Institute)
