What is green finance?

What is green finance? In recent years, the concept of green finance has been increasingly welcomed by many domestic financial institutions, especially banks. Will the next editor introduce the meaning of green finance?

Green finance means that the financial sector takes environmental protection as a basic policy, considers the potential environmental impact in investment and financing decisions, integrates the potential benefits, risks and costs related to environmental conditions into the daily business of banks, attaches importance to the protection of ecological environment and the control of environmental pollution in financial business activities, and promotes the sustainable development of society by guiding social and economic resources.

Green finance has two meanings. One is how the financial industry promotes environmental protection and the sustainable development of economy and society, and the other is the sustainable development of the financial industry itself. The former points out that the function of green finance is mainly to guide funds to resource-saving technology development and eco-environmental protection industries, to guide enterprises to pay attention to green environmental protection, and to guide consumers to form a green consumption concept. The latter makes it clear that the financial industry should maintain sustainable development and avoid excessive speculation that attaches importance to short-term interests.

According to the Guiding Opinions on Building a Green Finance System issued by the People's Bank of China and other seven ministries and commissions on August 3, 2065438, the definition of green finance refers to economic activities that support environmental improvement, climate change and efficient use of resources, that is, project investment and financing, project operation and risk management in the fields of environmental protection, energy conservation, clean energy, green transportation and green buildings.

Characteristics of Green Finance

Green finance is similar to traditional financial policy finance, that is, its implementation needs the promotion of government policies. Under the guidance of current policies and the idea of "economic man", traditional finance aims at economic benefits and takes the task of completing policies as its own responsibility. The latter is policy-driven finance. Environmental resources are public goods. Unless there is a policy, financial institutions cannot actively consider whether the production and services of lenders are eco-efficient.