CNA – China’s central bank warned that climate change and a global move to a low-carbon economy posed risks for domestic financial institutions and said stronger regulation was required.
“Climate change and low-carbon transformation will have a major impact on the wealth pattern and the asset management industry,” deputy governor of the People’s Bank of China Xuan Changneng told the Shanghai Bund Summit via video link.
Loans to high-carbon industries account for a relatively high proportion of financial institutions’ assets in China, he said.
Xuan added that an accelerated withdrawal or delayed exit from high-carbon sectors would result in heightened financial risks.
“Therefore, (we) should strengthen financial regulations, conduct stress tests and other means to guide financial institutions to continuously improve their green financial capabilities in accordance with the carbon peak and carbon neutral timetable,” he said.
China aims to cut its carbon dioxide emissions per unit of gross domestic product, or carbon intensity, by more than 65 per cent from 2005 levels by 2030.