Advancing the UK - China’s Green Finance agenda through disclosure and demand-led capacity building for both financial firms and listed companies

Project purpose: Increased TCFD aligned disclosure amongst financial institutions (FIs) and listed companies at national level and accelerated engagement in Shanghai, Beijing and Guangdong, leads to greater transparency of the green finance market in China. Context and Need for the Project: The project contributes to the ICF China goal to support and incentivise China’s transition to a more environmentally sustainable growth model through green finance1, in alignment with the Paris Agreement goals as well as SDG targets 8.4 and 12.62. CDP has identified that the Chinese market needs coordinated pro-ESG investment signals from three stakeholder groups: 1. Regulators who will not impose audacious regulatory requirements without evidence that companies (and FIs) can deliver on ambitious environmental goals. 2. Investors (and FIs3) who cannot rigorously assess the levels of risk within their portfolios and are not incentivised to shift capital towards green investments in the absence of strong evidence of companies’ carbon footprint and environmental impact 3. Finally, and closing the loop, companies that will not change their business model nor adopt low carbon business objectives without evidence that ESG investments may lower the cost of capital. Fundamentally, it has become clear that disclosure by companies is a vital prerequisite to embedding management of climate risk – and risk disclosure - within FIs. The UK is uniquely positioned as a funder due to its unique eco-system of FIs, repositories of world class green finance knowledge and its leading role in financial and non-financial disclosure globally.