China Tops World in Green Bond Issuance for Second Straight Year

China maintained its position as the global leader in green bond issuance for the second year in a row in 2023, amassing a total of $131 billion in both onshore and offshore markets, according to a report released on Friday [para. 1]. This figure is nearly double that of Germany, the second-largest issuer of green bonds, as reported by the Climate Bonds Initiative (CBI), an international nonprofit organization [para. 2].

The report also highlights an improvement in the quality of China’s green bonds. In 2023, 63.3% of these bonds qualified for inclusion in the Climate Bonds Green Bond Database, a rise from 57.3% in the previous year [para. 3]. To be part of this database, the bonds must adhere to CBI's stringent standards, which mandate that 100% of the net proceeds from the bonds be allocated to green assets [para. 3].

CBI CEO Sean Kidney emphasized the increasing significance of debt instruments in China’s green transition. He projects that the establishment of a credible transition finance market will provide crucial funding to decarbonize high-carbon-emitting sectors such as power, steel, chemicals, and agriculture [para. 4]. In an interview with Caixin, Kidney urged governments worldwide to set ambitious climate objectives and create a regulatory environment favorable to the development of green finance solutions. This would help steer both private and public funds towards the green transition [para. 5].

In July 2022, the Green Bond Standards Committee of China introduced the country’s green bond principles. These are primarily aligned with international standards and require that 100% of green bond proceeds be directed towards eligible green projects [para. 6]. More recently, in the previous month, the People’s Bank of China, alongside six other state departments involved in finance and environmental sectors, issued guidelines to create a "world-leading" financial support system for green and low-carbon development over the next five years [para. 7].

Additionally, Zhu Liangtao contributed to the article, with contact information provided for reporters Qing Na and editor Joshua Dummer [para. 8][para. 9].