• Surge in Green Financing: China’s green loans reached $4.1 trillion in 2023, a 36.5% year-on-year increase, leading all loan categories.
• Expansion of ESG Investments: Over 296 mutual funds in China now focus on sustainability, with assets surpassing $55.5 billion.
• Enhanced ESG Frameworks: Financial institutions, like E Fund Management, are developing advanced ESG rating systems tailored to China’s market.

China is accelerating its green transition, leveraging financial instruments to promote sustainable development. According to guidelines from the Communist Party of China Central Committee and the State Council, the focus is on green equity financing and financial leasing to drive economic transformation.

The People’s Bank of China reported a substantial increase in green loans, totaling $4.1 trillion at the end of 2023—a 36.5% rise compared to the previous year, marking it as the highest growth among all loan types. These funds are primarily directed towards green projects in sectors like energy, construction, and mining.

In addition, China’s domestic green bond issuance approached $498 billion by the end of 2023. This influx of capital supports green transitions across various industries, reinforcing the nation’s commitment to a low-carbon future.

Financial institutions are also ramping up their efforts in sustainable investing. The Asset Management Association of China noted that by the end of 2022, 296 mutual funds focused on sustainability and ESG had accumulated over $55.5 billion in assets. E Fund Management Co., Ltd., China’s largest mutual fund manager, has been at the forefront of this movement. As one of the first PRI signatories in China, we are committed to pioneering ESG investment products, stated E Fund Management.

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E Fund is further enhancing its ESG strategies by developing an ESG rating framework tailored to the A-shares market. This framework uses both quantitative and qualitative methods to assess companies based on environmental impact, management, and opportunities. Additionally, they have published a climate risk management framework to monitor and manage climate-related risks in their investment portfolios.

These initiatives underscore China’s strategic push to guide capital into green and low-carbon industries, reflecting a broader commitment to sustainable economic growth.