HONG KONG, Dec 10 (Reuters) – China’s central financial institution on Saturday warned that local weather change and a worldwide transfer to a low-carbon financial system posed dangers for home monetary establishments and mentioned stronger regulation was required.
“Local weather change and low-carbon transformation could have a significant affect on the wealth sample and the asset administration trade,” Xuan Changneng, deputy governor of the Folks’s Financial institution of China, advised the Shanghai Bund Summit through video hyperlink.
Loans to high-carbon industries account for a comparatively excessive proportion of monetary establishments’ property in China, he mentioned.
Xuan added that an accelerated withdrawal or delayed exit from high-carbon sectors would lead to heightened monetary dangers.
“Due to this fact, [we] ought to strengthen monetary rules, conduct stress exams and different means to information monetary establishments to constantly enhance their inexperienced monetary capabilities in accordance with the carbon peak and carbon impartial timetable,” he mentioned.
China, the world’s largest greenhouse fuel emitter, goals to chop its carbon dioxide emissions per unit of gross home product, or carbon depth, by greater than 65% from 2005 ranges by 2030.
Xuan mentioned globally the strategy varies from voluntary participation to obligatory regulation and known as on regulatory our bodies to steadily implement obligatory, complete and quantitative local weather disclosure necessities.
Xuan additionally warned of the reputational harm which monetary establishments can undergo if they’re suspected of overstating their inexperienced credentials citing the instance of German asset administration agency DWS Group (DWSG.DE).
A German shopper group in October sued DWS for allegedly misrepresenting a fund’s inexperienced credentials in advertising supplies. DWS has repeatedly denied that it misled traders and rejects the buyer group’s allegations. read more
Reporting by Selena Li; enhancing by Jason Neely
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