CBGG Holds Academic Seminar on “ESG Sustainable Development and Theoretical Standard System” in Beijing. 

Source: CBGG

Published: 2021-06-30 

On June 29, 2021, the Academic Seminar on “ESG Sustainable Development and Theoretical Standard System under the Background of Dual Carbon Goals”, co-hosted by the Center for BRICS and Global Governance (CBGG), the World Finance Forum (WFF) and Institute for Sustainable Development Goals of Tsinghua University (TUSDG) and organized by China Chengxin Green Finance Technology (Beijing) Ltd. (CCXGF), was held in Beijing. 

Zhu Guangyao, former Deputy Minister of Finance, and Chief Advisor of WFF and the Center for BRICS and Global Governance (CBGG), Wu Hongbo, Special Representative of the Chinese Government on European Affairs, former Deputy Secretary-General of the United Nations and Co-President of TUSDG, Wang Zhongmin, former Vice Chairman of China’s National Council for Social Security Fund, Vice Chairman of WFF, and Chairman of the Academic Committee of CBGG, Liu Yanhua, Director of the National Expert Committee on Climate Change, former Vice Minister of the Ministry of Science and Technology, and Director of TUSDG, Feng Xingke, Secretary-General of WFF, and Director of CBGG, Zhu Xufeng, Vice President of the School of Public Administration of Tsinghua University and Executive Director of TUSDG, Zhu Jun, Director-General of the International Department of the People’s Bank of China (PBC), Ma Xianfeng, Vice President of China Institute of Finance and Capital Markets (CIFCM), Zhang Xuechun, Deputy Director-General of the Research Bureau of the PBC, He Ping, Director of China Center for Financial Research of School of Economics and Management at Tsinghua University, Zhang Xiaohong, Deputy Director of the Bureau of Sci-Tech Innovation and Social Responsibility of State-owned Assets Supervision and Administration Commission (SASAC) of the State Council, Ye Min, Managing Director and Head of International at Moody’s Corporation, Shen Shuangbo, President of CCXGF, Li Xinxing, Chief Representative of European Bank for Reconstruction and Development (EBRD) in Asian Infrastructure Investment Bank (AIIB), Chen Zhiwei, Senior ESG Expert of AIIB, Zong Liang, Senior Research Fellow of WFF and CBGG, and Chief Research Fellow of Bank of China (BOC), Mei Dewen, General Manager of China Beijing Green Exchange, Jeong Bokhee, Vice President of SK China Social Value Promotion Office, Guo Siping, Senior Analyst of ESG research in MSCI Greater China, Xu Yang, Government Affairs General Manager of Greater China at the Dow Chemical Company, and other guests and experts attended the seminar.

Feng Xingke, Secretary-General of WFF and Director of CBGG, explained the background and objective of the seminar when presiding over the speech session, and reported the work, plans and objectives of the WFF in the fields of climate change, low carbon emissions reduction and ESG. Zhu Guangyao, former Deputy Minister of Finance and Chief Advisor of WFF and CBGG (CBGG) and Wu Hongbo, Special Representative of the Chinese Government on European Affairs, former Deputy Secretary-General of the United Nations and Co-President of TUSDG, delivered speeches respectively.

Zhu Guangyao noted that President Xi Jinping delivered an important speech at the general debate of the 75th session of the United Nations General Assembly and made it clear to the world that China will do its utmost to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060. President Xi repeatedly emphasized the importance of the environment and the “Two Mountains Theory”, that is, lucid waters and lush mountains are invaluable assets. Under the guidance of this theory, China has played an active and constructive role in promoting the formulation of global sustainability standards. In 2018, the international community began to realize the importance of formulating a unified, mandatory international standard that includes environmental, social and corporate governance (ESG) and is enforced globally. The International Financial Reporting Standards (IFRS) Foundation has been carrying out related work since 2018, but the first obstacle is the Trump administration of the United States, who rejects multilateral institutional arrangements, and the US Securities and Exchange Commission (SEC) resisted the initiative to set global sustainable standards advocated by the IFRS from the very beginning. However, the situation changed this year, because since President Biden took office on January 20, 2021, the new US administration aims to “return to multilateralism”. In March this year, the US SEC Chairman made it clear that a standard that can be enforced in the international community should be formulated, covering the fields of climate change and social development. Subsequently, US Treasury Secretary Yellen publicly stated that the United States supports the establishment of global sustainability standards and international negotiations. At present, IFRS consults with countries all over the world on relevant negotiation process for global sustainability standards, so as to promote the establishment of the global sustainability standards board and advancing relevant negotiation process through IFRS. The negotiation will be challenging, as the standards are a complete set of guidelines with mandatory implementation for future global sustainable development. Once this set of rules is completed, it will be serious for the member countries to implement. We must take it seriously and be prepared. First of all, we should actively participate in global governance and exert our influence and leadership. The choice of negotiators should reflect China’s will and the requirements of Chinese enterprises, accurately reflect China’s policy demands and play a leading role in the negotiation process. At the same time, we should properly handle challenges and problems in all aspects, serve the overall situation of high-quality economic development and China’s “dual carbon” goals, and make contribution to China’s closer integration with the world and the strong, sustainable, balanced and inclusive development of China’s economy.

Wu Hongbo noted that in December 2020, President Xi Jinping further clarified his determination to tackle climate change and advance energy and emissions reduction targets at the Climate Ambition Summit. At the same time, the fifth plenary session of 19th CPC Central Committee put forward the strategy of implementing sustainable development in depth, and made clear arrangements in the major economic development goals of the 14th Five-Year Plan and the long-range goals for 2035, which ensures the establishment of sustainable development and “dual carbon” goals, set our future green development strategy, and bring green innovation and changes to industries, environmental protection, energy, finance and other sectors. In this process, green finance is one of the important pillars to implement China’s energy revolution, and ESG is an important concept and practical tool to build a green capital market. However, at present, there is no unified ESG evaluation standard at home and abroad, so it is particularly important to accelerate the standardization of this system. The discussions on ESG standardization should be increased, so as to provide important support to realize China’s sustainable development and “dual carbon” goals.

Wang Zhongmin, former Vice Chairman of China’s National Council for Social Security Fund, Vice Chairman of WFF, and Chairman of the Academic Committee of CBGG, and Liu Yanhua, Director of the National Expert Committee on Climate Change, former Vice Minister of the Ministry of Science and Technology, and Director of TUSDG, delivered keynote speeches on core topics of the seminar respectively.

Wang Zhongmin noted that in terms of the “dual carbon” goals, we aim to peak carbon emissions by 2030 and achieve carbon neutrality by 2060. Before the peak, that is, from now to 2030, the total carbon emissions in China may still be increasing, and the total trading volume will be controlled to reach the peak in 2030, and by the time of carbon neutrality in 2060, the total amount of carbon will be decreasing every year. This is to define the target of total amount from a macro perspective. With the macro perspective, we can deduce the standard and quantitative derivation of each variable in micro quantification, and make carbon emissions reduction a measurable, identifiable, definable and tradable market. On the premise of the macro objective, it is also necessary to have the corresponding positioning of the micro perspective and consensus mechanism of standards, including the mechanism with multiple micro elements such as micro-incentive, micro-vitality and micro-balance. If any emissions reduction in this market can be regarded as a contribution to the society and receive effective and reasonable compensation, then the macro goals of “3060” will become a micro subject and mechanism, and “carbon neutrality” will become an incentive, which will dynamically encourage every enterprise and financial institution to introduce micro incentive measures.

Liu Yanhua noted that it has been almost five years since the Paris Agreement. Generally speaking, there are three “gaps” in green finance under the background of “dual carbon” goals. The first gap is the commitment gap. The sum of commitments made by various countries cannot meet the goal hold global temperatures to no more than 2°C above pre-industrial levels. According to the current estimates, the global temperature may rise by 3-3.5°C in the next 2,100 years. The second gap is the technical gap. The technology that has been mastered at present cannot support the ultimate goal of the Paris Agreement. The third gap is the funding gap. We face a large funding gap. To achieve “carbon neutrality”, government funds can only cover a small part, and the gap mainly depends on the market to bridge. In the future, the green financial system, especially the green financial services, will be very active, and it is necessary to find common ground between green and finance, and both green development and financial system need substantial reform. Generally speaking, it is urgent to realize low-carbon green finance under the background of “dual carbon”. Technology and market scale determine the cost, and market scale depends on the reform of the system and mechanism. A new round of competition under the “dual carbon” goals will reshape the global market structure. Green finance will be a bellwether of China’s future development prospects.

The seminar focused on “the path and direction of building ESG evaluation standard system”. Zhu Jun, Director-General of the International Department of the People’s Bank of China (PBC), Ma Xianfeng, Vice President of China Institute of Finance and Capital Markets (CIFCM), Zhang Xuechun, Deputy Director-General of the Research Bureau of the PBC, He Ping, Director of China Center for Financial Research of School of Economics and Management at Tsinghua University, Zhang Xiaohong, Deputy Director of the Bureau of Sci-Tech Innovation and Social Responsibility of State-owned Assets Supervision and Administration Commission (SASAC) of the State Council, Ye Min, Managing Director and Head of International at Moody’s Corporation, Shen Shuangbo, President of CCXGF, Li Xinxing, Chief Representative of European Bank for Reconstruction and Development (EBRD) in Asian Infrastructure Investment Bank (AIIB), Chen Zhiwei, Senior ESG Expert of AIIB, Zong Liang, Senior Research Fellow of WFF and CBGG, and Chief Research Fellow of Bank of China (BOC), Mei Dewen, General Manager of China Beijing Green Exchange, and other guests made speeches around the topic of the seminar. After that, the guests had a roundtable discussion. This session was hosted by Zhu Xufeng, Vice President of the School of Public Administration of Tsinghua University and Executive Director of TUSDG.

Nearly 100 authoritative guests from the PBC, Ministry of Finance, China Securities Regulatory Commission, SASAC, Development Research Center of the State Council, Moody’s Corporation, CCXGF, EBRD, AIIB, SK China, MSCI, Dow, Tencent, Lexin, Tongfang Co., Ltd., Beijing Normal University and Tsinghua University attended the seminar. The participants focused on the challenges and opportunities brought by ESG’s concept and practice, and analyzed ESG’s contribution to achieving the “dual carbon” goals and its realization path, so as to strengthen the research and judgment of ESG-related fields under the background of global economic and financial governance。