PBOC to Guide Asset Owners Towards ESG Investments

Central bank to steer China’s pension funds, insurance, social security agencies and asset managers towards ESG products.

Officials at the People’s Bank of China (PBOC) have reportedly said the central bank will guide long-term investment funds – including pension funds, insurance and social security agencies – towards investing in ESG products.

According to local reports, the PBOC will prioritise ESG-themed investments and leverage the newly-launched national carbon trading mechanism to implement the country’s green and low-carbon development strategy.

PBOC deputy governor Fan Yifei recently said at the Global Asset Management Forum in Beijing that financial institutions will gradually be able to plug into the national carbon trading system, and that carbon derivatives like forwards, futures and options will be developed.

At the forum, officials urged asset managers to actively promote ESG investing and support the development of green and low-carbon industries, to help China meet its 2030 peak emissions and 2060 carbon neutrality goals.

An estimated CNY 136 trillion of total investment is needed to meet these goals, officials said, adding that the government plans to soon issue policy guidance to accelerate the low-carbon transition.

The PBOC is meanwhile working to set new policy tools that can promote reductions in carbon emissions, improve incentives, and provide window guidance to strengthen financial institution support for key areas, such as wind power and photovoltaic power generation.

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

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