United Nations in China organizes a policy dialogue on Finance for Sustainable Development and Carbon Neutrality

June 22, 2021

Policy dialogue on financing for the SDGs at the UN Compound in Beijing

Beijing, 22 June 2021 - With the support of the UN Country Team in China, UNDP and the International Institute of Green Finance (IIGF) jointly organized a policy dialogue on Sustainable Finance and Carbon Neutrality to exchange views with key policymakers on accelerating sustainable and climate finance.

While delivering his opening speech, Mr. Shahbaz Khan, United Nations Resident Coordinator in China (ad interim) stressed that COVID-19 has increased the financing gap for achieving Sustainable Development Goals (SDGs)  to USD 4.2 trillion.[1] "This SDG-financing gap is also made more complex by the investment needed for climate action embedded in the 2015 Paris Agreement." added Mr. Khan.

Professor Wang Yao , Director General of IIGF at Central University of Finance and Economics (CUFE) also echoed the impact of COVID-19 on SDG financing, and highlighted the need to mobilize private sector investment to close the financing gap required for achieving China’s climate pledge. “Innovative financial instruments and policy tools will also play a vital role in this process”.

During her keynote speech, Ms. Beate Trankmann, UNDP China's Resident Representative noted that " moving forward, in the push to achieve the SDGs, there needs to be a shift from voluntary application to institutionalization. It is vital that governments and societies further integrate the SDGs into policies and regulations, setting standards that unleash the potential of public finance and capital markets for a green future that includes everyone."

Ms. Trankmann presented key recommendations for Sustainable Finance including "aligning government spending in the post-COVID era with climate targets and SDGs; re-setting the relative price of renewables and fossil fuels by eliminating fossil fuel subsidies and using taxes to disincentivize emissions; mandating climate-related information disclosures;  setting explicit Key Performance Indictors (KPIs) of climate change for high-emission companies and investors; and ensuring that no one is left behind during the transition to carbon neutrality."

Keynote speaker Ye Yanfei, Chief Inspector of the Policy Research Bureau of the China Banking and Insurance Regulatory Commission, recommends to make green finance more inclusive. “More financing should go to agriculture sector to mitigate the impact of climate change on farmers and create eco-friendly job opportunities for rural residents. Carbon footprint should also be a key consideration when offering financial support to small and medium-sized enterprises (SMEs) to incentivize them adopt energy efficient facilities.”

According to Ma Xianfeng, Deputy Director General of China Institute of Finance and Capital Markets (CIFCM) at China Securities Regulatory Commission, "low-carbon economy, and green financing face huge challenges that cannot be met solely by state budget. In this context, we need to use financial and fiscal means and allow the market to play an important role in the allocation of resources to improve the resilience of the financial systems. In particular, capital markets in China, with its 180 million investors and its CNY 85 trillion-value, can be used to achieve the just transition under the double goal of carbon peaking before 2030 and carbon neutrality before 2060".

He Jie, Director of the Shenzhen Municipal Financial Regulatory Bureau, shared Shenzhen’s good practices in advancing green finance development and promoting ESG investing. He also  stressed “To better support China in achieving its climate goals, policy and planning should fully consider regional difference and promote regional cooperation”

The opening session was followed by four interactive discussion sessions with high-level panelists. Discussions focused on aligning public financing policy and strategy with SDGs and the climate agenda; integrating climate impact and risk into finance practices; mobilizing capital in a just and inclusive transition; as well as Environmental Social Governance (ESG) investing.

The event convened around 30 high-level representatives and 150 online experts from government, financial institutions, think tanks, academia and the corporate sector in China and  internationally. The event identified recommendations on accelerating financing for sustainable development and carbon neutrality.  This will help the UN to  better engage with China's policymakers and market players to accelerate the alignment of China’s development path and national priorities with SDG attainment. This event is the 4th of the United Nations Policy Dialogue series planned by the UN Country Team in China following the launch of the UN Framework for the Immediate Socio-Economic Response to COVID-19. Previous United Nations Policy Dialogues focused respectively on social protection, food security and green development.

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[1] OECD (2020). Global Outlook on Financing for Sustainable Development 2021: A New Way to Invest for People and Planet, OECD Publishing, Paris. https://www.oecd.org/development/global-outlook-on-financing-for-sustainable-development-2021-e3c30a9a-