Since the Chinese government published the Guidelines for Establishing the Green Financial System in August 2016, much of the green finance movement has been driven by strong government policy, but both issuers and investors feel that sustainability would benefit from financial aid from the Chinese government.

Fifty percent of issuers and 44% of investors regard some form of tax kicker or other financial inducement as a key step the Chinese government could take to help their organisation move toward sustainability.

Out of six other potential policy actions, the next most popular were ‘investment from the government’ and ‘information on how to become sustainable’, each with 46% support. Issuers are particularly eager for financial support — it comes well ahead of the second most commonly requested kind of help, which is investment from the government,
on 43%.

Moreover, when issuers are asked whether they might issue green and sustainable debt products, a lack of financial incentives is one of the main obstacles, alongside not needing to
raise debt.

Respondents also view current financial incentives as fairly ineffective. They rank them least well developed among seven measures of the effectiveness of green and sustainable finance in China.

Nearly 40% of issuers and investors believe current incentives need improvement, while only 11% judge them well developed. This may also explain the fairly meagre score some respondents assign to the effectiveness of official guidance to encourage green and sustainable finance. Although more are positive on this effort, 26% say it needs to improve.

Direct investment by government is another potential way of kick-starting sustainability efforts. Respondents are almost as enthusiastic about this policy as about financial incentives, with 46% liking it. Unlike in the case of incentives, however, investors are marginally stronger in their support than issuers.

Almost as popular as government investment, with 42% backing, is better access to private investors.