把握中國可持續(xù)發(fā)展投資機(jī)遇 SEIZING OPPORTUNITIES IN CHINA'S SUSTAINABLE INVESTMENT

ThinkAhead

SEIZING

OPPORTUNITIES

INCHINA'S

SUSTAINABLEINVESTMENT

2

AboutACCA

WeareACCA(theAssociationofCharteredCertifiedAccountants),agloballyrecognisedprofessional

accountancybodyprovidingqualificationsandadvancingstandardsinaccountancyworldwide.

Foundedin1904towidenaccesstotheaccountancy

profession,we’velongchampionedinclusionandtodayproudlysupportadiversecommunityofover252,500

membersand526,000futuremembersin180countries.

ACCAnowhasover29,000membersand125,000futuremembersinChina,withrepresentativeofficesandcontact

pointsin11citiesincludingBeijing,Shanghai,Guangzhou,Shenzhen,Chengdu,Shenyang,Qingdao,Wuhan,

Changsha,HongKongSARandMacauSAR.

ACCA'sunwaveringcommitmenttobuildingsustainable

economiesisattheheartofourglobalvision.Through

ourpolicypositionsandinsights,westrivetoinformand

influencedecision-makers,promoteethicalandresponsiblebusinesspractices,andsupportthetransitiontoabetter

future.

ForthisresearchreportonSeizingopportunitiesinChina’ssustainableinvestment,wearegratefultoourmembersinmainlandChinaandHongKongSARwhocontributedtheirexpertiseandon-the-groundexperiencesthroughsurveyandcasestudies.Byharnessingthecollectiveintelligence

ofourdiversecommunity,weareabletoprovidea

comprehensiveunderstandingoftheevolvinginvestmentoutlookinthedynamicChinesemarket.

ACCAisdelightedtocollaboratewithHKTDConthisimportantresearch.Wehopethisworkwillinspire

professionals,investors,policymakers,andthewiderbusinesscommunity.

Findoutmoreat

AbouttheHKTDC

TheHongKongTradeDevelopmentCouncil(HKTDC)is

astatutorybodyestablishedin1966topromote,assistanddevelopHongKong'strade.With50officesglobally,

including13inMainlandChina,theHKTDCpromotesHongKongasatwo-wayglobalinvestmentandbusinesshub.

TheHKTDCorganisesinternationalexhibitions,

conferencesandbusinessmissionstocreatebusinessopportunitiesforcompanies,particularlysmalland

medium-sizedenterprises(SMEs),inthemainlandandinternationalmarkets.TheHKTDCalsoprovidesup-to-

datemarketinsightsandproductinformationviaresearchreportsanddigitalnewschannels.

TheHKTDC'smissionistocreateopportunitiesfor

HongKongcompanies.Wefocusondeliveringvalueby

promotingtradeingoodsandservices,whileconnecting

theworld'sSMEsthroughHongKong'sbusinessplatform.Instrivingtobethebesttradepromotionorganisationinthe

world,theHKTDCiscommittedto:

nDevelopingandexpandingnewfrontiersbyexploring,learningandinnovating

nBuildingonHongKong'seconomicsuccessthroughglobalbusiness

nCreatinganddeliveringvaluetoourcustomers

nMaintainingtrust,respectandopennessinallourrelationships

Findoutmoreat

3

Abouttheauthors

SamChen

RegionalLead,PolicyandInsightsACCAChina

Email:sam.chen@

AdrianChong

Manager,PolicyandInsightsACCAChina

Email:adrian.chong@

WingChu

PrincipalEconomist

HongKongTradeDevelopmentCouncilEmail:wing.wc.chu@

CherryYeung

SeniorEconomist

HongKongTradeDevelopmentCouncilEmail:cherry.cl.yeung@

Weacknowledgeandthankallindividualswhohaveparticipatedinourinterviewsforgivingtheirtimeandinvaluableinsights(see

Acknowledgements)

Copyright?2024HongKongTradeDevelopmentCouncilandACCA.Reproductioninwholeorinpartofthisreportwithoutpriorpermissionisprohibited.Whileeveryefforthasbeenmadetoensureaccuracy,theHongKongTradeDevelopmentCouncilandACCAarenotresponsibleforanyerrorsthisreportmaycontain.TheviewsexpressedinthisreportareneithernecessarilythoseoftheHongKongTradeDevelopmentCouncilnorACCA.

4

Contents

ExecutiveSummary5

1.NewNormforChineseBusinesses

8

1.1PredominanceofSustainability

8

1.2NavigatingthePrioritiesofModernChineseBusiness

10

1.3GlobalSustainabilityPledge

11

1.4CorporateApproaches

14

2.SustainableInvestmentinChina:SurveyFindings

15

2.1PositiveBusinessandInvestmentOutlook

15

2.2ComprehensiveUnderstandingofSustainableInvestmentUsageandBenefits

16

2.3SustainabilityInvestments

17

2.4FundingSustainability

19

2.5ChallengesandOpportunities

20

3.Sustainabilityinpractice–casestudies

24

3.1BancoNacionalUltramarino

25

3.2KPMGChina

29

3.3ChinaGeneralNuclearPowerCorporation

31

3.4SwireProperties

33

4.Risingtothechallengesandlevellingupsustainabilityintegration–lessonslearned

36

4.1Clearlinesofcommunicationandunderstandinglocalcontext

36

4.2Stayingthecourse–exploitinggreenfundingandtechnology

37

4.3Takingitontheroad–balancingprofitabilityandothersustainablefactors

4.4Varyinglevelsofmaturity,butstrongcommitment

38

–settingsustainabilityperformanceindicators

38

4.5Compliance,reputationandvalues–stayinginformed

39

Appendix

41

Acknowledgements

43

SEIZINGOPPORTUNITIESINCHINA'SSUSTAINABLEINVESTMENT|EXECUTIVESUMMARY

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ExecutiveSummary

Sustainabilityhas,beyondanydoubt,emergedasoneofthemostcriticalconcernsofthe21stcentury.Asaconcept,ithasbecomedeeplyembeddedinalmosteveryaspect

ofcontemporarysociety–fromconsumerbehaviourto

educationtogovernmentalpriorities.Inevitably,ithasalsomovedtocentrestagefortheglobalbusinesscommunity.

Sustainableinvestmentreferstothepracticeofmakingfinancialinvestmentsinanorganisationorprojectina

waythatprioritisesustainabilityconsiderationsalongsidefinancialreturns,therebygeneratingapositiveimpact

forbothsocietyandtheenvironment.Theseinvestmentsareintendedtosupportlong-termsustainabilityand

responsiblebusinesspracticesinadditiontoachievingfinancialgoals.

Itisbecomingincreasinglyimportantforbusinessinvestors,sustainabilityprofessionals,andinstitutionalleadersto

understandthecurrentsustainableinvestmentlandscape.Athoroughgraspofemerginginvestmentstrategies,

andinnovativesolutionscanhelpthesestakeholders

identifyopportunitiestointegrateESGprinciplesintotheiroperationsanddecision-making.

WithinChina,theworld’ssecond-largesteconomyand

itsmostsignificantmanufacturingbase,afurtherdriverforsustainabilityisthestringentregulatoryrequirementslinkedtothecentralgovernment’s'DualCarbon'target.Beyond

that,anumberofotherfactorsarealsodrivingthecountry’sprioritisationofagreeneragenda.Theseincludetheneedtoenhancetheenvironmentally-friendlycredentialsof

thecountry’smanufacturingbaseinawaythatmeetsthe

concernsofbothdomesticandoverseasstakeholders.

Furthermore,thereisaclearrequirementtobolsterthe

brandsofmainlandcompaniesinsustainableterms,whiledemonstratingtoallstakeholders,strategicpartners,clientsandofficialbodieshowseriouslythecountrytakesits

responsibilitiesonsustainabilitymatters.

Giventheinterconnectednatureofeconomicactivityacrosstheglobe,China’scommitmenttosustainabilityonboth

thebusinessandinvestmentfrontsis,ofcourse,subjecttoconstantscrutinyfromoverseasanddomesticstakeholdersaswellasinternationalmonitoringbodiesgiventhesizeofitsmanufacturingbaseanditsgrowingglobalprominence.

China’spolicymakinghasalsobeengivenadded

significanceasitspracticesandvaluesare,effectively,

exportedbythemanymainlandbusinessesexpanding

globally,particularlyinthecaseofthosecountriesalignedwiththeobjectivesoftheBeltandRoadInitiative(BRI).Infact,China’sBRIrelatedinvestmentisincreasinglyfocusedongreeninfrastructure,renewableenergyandgreen

transition.Aswellascomplyingwithterritory-wideESG

practice,suchbusinessesmustalsoaligntheiroperationalprotocolswiththesustainabilityprioritiesofthejurisdictiontheyareoperatingwithin.

Thishighlightstheinterconnectednatureofsustainability,withsuchsharedvaluesnowunderpinningbusiness

resilience,customerrelationships,corporatereputation,

andultimatelythevaluecreatedbycompaniesonatruly

internationalbasis,withsuchconcernsunitingemergingandmaturemarkets,aswellaseverythinginbetween.

ThesustainableinvestmentlandscapeinChinais

witnessingadual-directionalgrowthtrend,markedby

significantdevelopmentsinoutboundandinbound

investments.Chinesecompaniesareincreasinglylookingbeyondtheirborderstoinvestinsustainableprojects

andopportunitiesabroad.Thisoutwardexpansionnot

onlydiversifiesinvestmentportfoliosbutalsocontributestotheglobaladvancementofsustainablepracticesand

technologies.Conversely,foreigninvestorsareshowingagrowinginterestinChina'ssustainableinvestmentmarket.TheinfluxofinboundinvestmentsintoChinasuggests

internationalrecognitionofthecountry'spotentialasahubforsustainableinitiativesandgreenfinance.

SEIZINGOPPORTUNITIESINCHINA'SSUSTAINABLEINVESTMENT|EXECUTIVESUMMARY

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TurningtoHongKong’sparticularrolewithinthis,the

cityhaslongfunctionedasakeyfacilitatorformainlandbusinessesthatarekeentoenhancetheirsustainabilitycredentials.ThishaspartlystemmedfromitslegacyroleasaconduitforinternationalcapitalinvestmentstoflowintomainlandChina(bringing-instrategy),aswellasitspreeminentcontributiontohelpingmanagemainland

China’soutboundinvestmentportfolio(going-global

strategy)–abouttwo-thirdsofsuchcapitalisfunnelled

throughHongKong.Arecentsurveyrevealsthatover90%ofcompaniesintheGuangdong-HongKong-MacaoGreaterBayArea(GBA)acknowledgeHongKongasastrong

facilitatorforsustainabledevelopment,citingitsstrengthsinawiderangeofgreenapplicationsandfinancialservices.

Thisislargelyattributedtothecity’sserviceproviders

maintaininginternationalstandardsandunderstandingthemainland’ssustainabilityneed.

Assustainabilityhasbecomeanincreasinglysignificant

elementoftheglobalbusinessmix,HongKong's

contributionhasexpandedaccordingly,ashasthebreadthofitscontributions.Astestimonytothis,thecitynowplaysadecisiveroleinensuringChinesebusinessesareable

tocomplywiththediversesustainabilitystandardsoftheirvariousstakeholders.

Itisnotable,forinstance,thatasignificantnumberof

GBAcompanieshavegoneonrecordasacknowledging

thedepthandqualityofHongKong'sresourcesacross

manyrelatedareas,includinggreenapplications,financialproductsandservices.Takentogether,thisinterconnectedresourcebasehasestablishedHongKongasthekey

stakeholderwithintheGBAwhenitcomestothepromotionandimplementationofsustainabledevelopmentpractices.

Todeliverdeeperinsightsintothesustainabilityjourneyofmainlandcompanies,theHKTDCandACCAhave

recentlycompletedajointresearchinitiativespecificallyfocussedonthisissue.

Ourjointsurveyrevealedasignificantdeficitinsustainabilityexpertise,withrespondentsciting

shortfallsinknowledge(37%),talent(28%)andpractical

experience(27%)aspotentialroadblockstotheir

sustainabilitygoals.Thishighlightsacriticalgapin

China'sburgeoningsustainabilitybusinesslandscape

andtalentdevelopment.Whilebusinessesaremaking

commendableprogressinadoptingsustainablepractices,thelackofspecialisedtalentposesasignificantriskto

thesuccessfulimplementationandlong-term

sustainabilityoftheseinitiatives.Byproactively

addressingthetalentgap,businessleaderscanensurethatChina'sgreenbusinessambitionsaremetwiththenecessaryexpertiseandskills.Thiswillnotonly

contributetoamoresustainablefuture,butalsocreateacompetitiveadvantageforbusinessesoperatingina

rapidlyevolvingglobalmarket.

SEIZINGOPPORTUNITIESINCHINA'SSUSTAINABLEINVESTMENT|EXECUTIVESUMMARY

7

Otherkeyfindingsareasfollows:

nOverall,themajorityofresearchparticipantsnotedanuptickinthecurrentbusinessenvironmentandamoreoptimisticbusinessoutlookcomparedto12months

ago,withthisseenaslikelytoboostChina-orientedinvestmentlevels.

nSurveyrespondentstendtopayattentionto

Government'spolicyprioritiesonenvironmentalimpacts,especiallyoncarbonemissions.

nWhenevaluatinginvestmentopportunities,mostsurveyrespondentscitedeconomicconsiderationsastheirfirstpriority,followedbythespecificsustainablecapability

setupandanumberofrelatedgovernancefactors.

nSurveyfindingsalsoshowedthatrespondentsare

committedtoadoptingsustainabilitypractices.While60%hadonlyallocatedamaximumof3%oftheir

incometosuchobjectives,asignificantportion(40%)spentagreaterproportioningreenmeasures.

nWhilesome99%ofenterprises(30%tendtoincrease

while69%tendtoremainatthesamelevel)planto

sustainablyinvestoverthenextthreeyears,cost

pressureswerecitedasamajorhurdlewhenitcomestoimplementingsustainableinvestmentstrategiesinChina.

nCreatinglong-termvalues(73%)andcomplyingwith

regulatoryrequirements(71%)wereidentifiedasthe

mainmotivationsforadoptingsustainabilitypractices.[1]

nWhileonlyaround50%ofthesurveyedenterprises

reported'moderate,''slight,'or'extreme'familiaritywithgreenfinancingoptionsinChina,asignificantmajorityofover70%wouldconsiderusingagreenfinancing

channeltomeettheirfutureneeds.

nOverall,theprogress/effortmadetowardsintegratingsustainableinvestmentintocurrentbusinessand

operationalmodelswasseenasmorethansatisfactory.

Inaddition,certainkeylessonsweregleanedfromthepanelofindustryexpertsinterviewedbytheHKTDCandACCA.

nWhenfocusingoncuttingthecarbonemissionsof

allstakeholdersunderstandingthelocalcontextisofparamountimportance,especiallywhentryingtofullyaccessthearrayofopportunitiesavailableinChina’ssustainabilitymarket.

nCompaniesareactivelytransitioningtheirinvestmentstrategiesandoperationalprotocolstowardmore

sustainability-focusedinitiatives.Thisstrategicshift

reflectsstakeholderexpectationsthatcompanies

shouldfocusongeneratingvalueinasustainable

andsociallyresponsiblemanner.Greenfinancingandtechnologyareamongthekeymethodscompanies

nowusetoachievetheirsustainabilitygoals.Securinggreenfinancing,includinggreenbondsorloans,can

seeinterestmarginsreducedifsustainabilitytargetsarehit.Inaddition,suchfinanceexpandsaccesstocapital,whilediversifyingtheavailablepoolofinstitutional

investorsinanygivenmarket.

nInvestinginsustainableprojectsnolongerrequires

companiestosacrificeprofitability.Indeed,asthenumberofsustainableinvestmentopportunitieshasgrownrapidly

–particularlywithinChina–manysuchprospectsareperfectlyalignedwithwell-definedsustainablefinancepriorities,whileremainingfinanciallyviable.

nFurthermore,manymainlandcompanieshavealready

successfullyintegratedsustainabilityintotheiroperationalmodelsandarenowcontinuouslyevaluatingandfine-

tuningtheirapproachtoensureoptimaloutcomes.This

requireslookingbeyondtraditionalfinancialindicators

andtoconsidernon-financialelementssuchascorporategovernanceandsocialimpact.

nThelevelofreportinganddisclosurethatorganisationsmustcomplywithiscontinuallyrising.Whileaccesstotherequireddataandstayinginformedoftheevolvingrequirements

remainchallenging,actionableplansandbespokestrategiescanhelpovercomeanysuchobstacles.

1.Source:

'ACCA–Sustainabilityreporting:SMEguide'

SEIZINGOPPORTUNITIESINCHINA'SSUSTAINABLEINVESTMENT|1.NEWNORMFORCHINESEBUSINESSES

1.NewNormforChinese

Businesses

1.1PredominanceofSustainability

Chinesebusinessesareincreasinglyrecognisingthe

importanceofsustainability.Thisemphasishasbeendrivennotonlybytheneedtofollowregulatoryrequirementsin

linewithChina's'DualCarbon'targetsbutalsobydemandsfromadiversesetofstakeholdersincludinginstitutional

investorsandcorporateclients,aswellasend-customersbothdomesticallyandabroad.Thisshiftisalsoevident

amongthoseChineseenterprisesandinvestorsaimingtoextendtheirreachintoBeltandRoadcountriesandotherinternationalmarkets.

Suchdevelopmentsarenocoincidence,asglobalwarmingandclimatechangeposeformidablechallengesto

humanity.Notably,theelevationintheEarth’stemperaturehasreachedalarminglevelsamidincreasedgreenhousegasemissions,suchascarbondioxideandmethane,

primarilyduetohumanactivities.Addressingthese

complexclimate-changeissuesrequireswidespread

alterationsinnumeroussectorsoftheglobaleconomy,particularlyinenergyproduction,landuseandcontrolofgreenhousegasemissions.

Inresponsetosuchescalatingthreats,Chinaisactively

workingtoreducecarbonemissionsandpromote

sustainabledevelopmentpractices.Thecountry’sproactiveapproachisanchoredinitscommitmenttotransitioningtoagreeneconomyandamoresustainablefuture.During

thecourseofits14thFive-YearPlan(2021-2025),China

iscommittedtostrategicallychartingacoursetowardsits

carbonpeakandcarbonneutralitygoals.Thisrepresentsasignificantshiftinthegovernment’sdevelopmentparadigm,

whichnowemphasisesenvironmentallyfriendlyandsustainablemeasures.

8

SEIZINGOPPORTUNITIESINCHINA'SSUSTAINABLEINVESTMENT|1.NEWNORMFORCHINESEBUSINESSES

9

AshighlightedinTheOutlineofthe14thFive-YearPlan

forNationalEconomicandSocialDevelopmentand

theLong-RangeVisionsThroughtheYear2035ofthe

People’sRepublicofChina,thecountrynowenvisions

atransformationalshifttowardsgreenproductionand

lifestyle,leadingtoagradualdecreaseincarbonemissionsafterhittingapeak.Thisvisionandtherelatedplansaim

tofundamentallyimprovetheecologicalenvironmentandtherealisationofbuildinga'BeautifulChina'.Theyheraldamomentousshiftinthecountry’sdevelopmentagendathatseesitmovingbeyondrelianceoncarbon,whilesignallingakeypivottowardsenvironmentallymindfulconsiderationswithinnationaldevelopmentframeworks.

Suchdevelopmentsinevitablyhavefar-reaching

implicationsforbusinessesoperatingwithinChina,aswellasforthoseChineseenterprisesadoptingthe'going-out'

strategytoexpandinternationally.Intriguingly,nearly90%

ofmainlandenterprisessurveyedbyHKTDCreportedplansto'goglobal'withintheforthcomingonetothreeyears.

Approximately72.8%aimtocapitaliseonopportunities

withintheRCEPandBeltandRoadmarkets,while65.1%ofrespondentshavesetsightsonadvancedeconomiessuchasEuropeandNorthAmerica.Theirprimaryobjectivesfor'goingout'encompassvariousareas,includinglogistics

andtransportation(28.8%),marketingandsales(26.9%),

establishingoverseasfactories(23.3%),andsourcing

internationally(15.9%).[2]Aspartofthisexpansionstrategy,thesebusinessesneedtoincorporateconsiderationsof

extremeweatherrisks-includingcatastrophicflooding,

extremeheat,andwindstorms-intotheirsupplychainriskmanagementtoensureitscomprehensiveness.Likewise,inexpandingtheirglobalfootprint,theymustacknowledge

theimportanceofcompliancewiththesustainabilityrequirementsoftheirtargetmarkets.

Inthecircumstances,businesseswillhavetonavigateanincreasinglychallenginglandscapeofenvironmentalregulations,investincleanertechnologiesandadopt

sustainabilityasthecoreprincipleoftheiroperations,

withthelatterencompassingeverythingfrommanagingtheclimate-relatedriskstoenhancingsupplychain

sustainability.Thesebusinessstrategieswillcertainlyrequiresignificantupfrontinvestmentandbroad

organisationalshifts.However,thelong-termbenefits

couldalsobesubstantial,astheyofferthepotentialtoenhancecorporatevalueandbrandperception,enablelong-termcostsavings,andunlockopportunitiesinthegrowingworldofgreenfinancing.

2.Source:

'HongKong:ThePremierPlatformforMainlandCompaniestoExpandintotheBRIandRCEPMarkets',HongKongTradeDevelopmentCouncil

SEIZINGOPPORTUNITIESINCHINA'SSUSTAINABLEINVESTMENT|1.NEWNORMFORCHINESEBUSINESSES

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1.2NavigatingthePrioritiesofModernChineseBusiness

Withregardtothedomesticlandscape,ChinaismakingstridesinitscommitmenttotheParisAgreementby

establishing'DualCarbon'targetsforpeakcarbonand

carbonneutrality.Speakingatthegeneraldebateofthe

75thsessionoftheUnitedNationsGeneralAssemblyin

September2020,ChinesePresidentXiJinpingannouncedthatChinawouldscaleupitsintendednationallydeterminedcontributionsbyadoptingvigorouspoliciesandmeasures

toseecarbondioxideemissionspeakbefore2030and

achievecarbonneutralitybefore2060.Itfollowedthat

carbonpeakingandneutralitywereincludedinChina’s

overallplanforenvironmentalprotectionatameetingoftheCommissionforFinancialandEconomicAffairsunderthe

CPCCentralCommitteepresidedoverbyPresidentXiinMarch2021.

ThesegoalsrepresentasignificantincreaseintheambitionofChina’sclimatepolicies,whilesignallinganimportant

commitmenttoacceleratingthecountry’spathtoagreen

andlow-carboneconomy.However,achievingtheseaimsrequiresextensiveeffortsinreshapingthecountry’senergygenerationandusage,includingimplementingenergy

efficiencymeasures,expandingrenewableenergyand

continuingtoreducerelianceoncoal.Specifically,the

centralauthoritiesadoptedadocumententitledGuidelinesforCarbonDioxidePeakingandCarbonNeutralityinFull

andFaithfulImplementationoftheNewDevelopment

Philosophy,whichdefinedtheworkingguidelines,main

objectivesandkeytasksforachievingcarbonpeakandneutrality[3].Thiswasfollowedupwithanactionplanforcarbonpeakingbefore2030,issuedbytheStateCouncilinOctober2021[4],whichcoveredanumberofareas,

including:

nGreenandlow-carbontransformationofenergy

nEnergysaving,carbonreductionandefficiencyimprovement

nReachingpeakcarbonemissionsintheindustrialsector

nReachingpeakcarbonemissionsinurbanandruralconstruction

nGreenandlow-carbontransportation

nCirculareconomytoassistincarbonreduction

nGreen,low-carbonscientificandtechnological

innovation

ThesecommitmentsandactionshavemultipleimplicationsforbusinessesandinvestmentsinChina.Asoutlinedin

thisyear’sgovernmentworkreportdeliveredatthe14th

NationalPeople’sCongresson5March2024,theChinesegovernmentissettostrengthentheconstructionofamoreecologically-basedsocietyandfurtherpromotegreen,

low-carbondevelopment.Accordingly,thegovernment

willvigorouslypromotethegreentransformationofthe

industrialstructure,energystructure,transportstructure,

andurban-ruralconstructiondevelopment.Itisalsosetto

enhancetheabilitytostatisticallycalculateandverifycarbonemissions,establishacarbonfootprintmanagementsystemandexpandthecoverageofthenationalcarbonmarket

industry.Asaresult,thecountryasawholeisworking

towardsgreenandlow-carbondevelopmentacrossmultiplesectors.

Businesseswithafocusonrenewableenergy,electric

vehicles,energy-efficienttechnologyandothergreen

industriescouldseeanincreaseinopportunitiesasChina

stepsupitseffortstotransitionawayfromfossilfuels,a

movethatwillpotentiallyimpactdomesticandforeign

companiesoperatinginsuchsectorsacrossthemainland.However,suchdevelopmentswillalsobringaboutchangestotheregulatoryenvironmentwhileimpactingthefinancingenvironment.Takentogether,thesechangessuggestthat

investorsmustaligntheirstrategieswiththecountry’s

transitiontowardsamoresustainable,low-carboneconomy.

nStricterregulations:companiesfacestricter

environmentalregulationsasChinaworkstodecreaseitscarbonemissions.Thiscould,forinstance,leadto

increasedcostsforcompaniesinsuchtraditionally

high-emittingsectorsasoil,gas,coalandmanufacturing.Similarly,companiesinvolvedinhigh-carbonindustriesmayexperiencechallengesduetoregulatorychangesaimedatreducingcarbonemissions.

3.Forfurtherdetails,pleasereferto:

ChinaAnnouncesPlansforCarbonNeutrality

4.Forfurtherdetails,pleasereferto:

ChinaRevealsActionPlanforCarbonDioxideEmissionstoPeakBefore2030

SEIZINGOPPORTUNITIESINCHINA'SSUSTAINABLEINVESTMENT|1.NEWNORMFORCHINESEBUSINESSES

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Morerecently,China’sStandardisationAdministration,

alongwithseveralotherdepartments,issuedguidelinesestablishingcarbonpeakingandcarbonneutrality

standards.Theauthoritiesaimtoformulateorupdateat

least1,000nationalandindustrystandardsby2025tokeeppacewiththeinternationalcommunity.[5]

Inanotherdevelopment,in2023,theNationalDevelopmentandReformCommissionreleasedaplanforthelaunchof

carbon-peakingpilotprojectsin100citiesandindustrial

parksnationwide[6].Inearly2024,theMinistryofIndustryandInformationTechnologythenannouncedguidelines

fortheestablishmentofasystemofcarbonpeakingand

carbonneutralitystandardsfortheindustrialsector,inordertoachievepeakcarbonby2030inlinewiththecountry’s

target[7].Thesedevelopmentshavealreadystartedtoimpactbusinessesandinvestmentacrossanumberofdifferentsectors.

Onthefinancialfront,China’speakcarbonandneutrality

ambitionshavealsobroughtaboutchangesinthecountry’sfinancingenvironmentasitworkstowardsimplementing

'greenfinancing'policies.InMarch2024,forexample,the

People’sBankofChinaandsixotherbodiesissuedasetofguidingopinionsrelatingtosteppingupfinancialsupportforgreenandlow-carbondevelopment[8].Thisdocument’skeyareasoffocusincludedoptimisinggreenfinancestandards,strengtheningthedisclosure-basedregulatoryregimeandfosteringthedevelopmentofthegreenfinancialmarketandrelatedproducts.Asaresult,suchpoliciesareexpected

tomakeiteasierforcompaniesoperatingsustainablytogetaccesstocapital,whilediscouragingthefinancingofprojectsharm