Climate Cooperation China
On behalf of the International Climate Initiative (IKI)

European Study Tour on Sustainable Finance and Climate Finance

In order to close the significant financing gaps to achieve the goals of the Paris Agreement and to promote sustainability in the financial sector by integrating ESG factors into investment decision-making, we recognise the urgent need for leading financial professionals to strengthen their expertise on sustainable finance. International expert exchange can play an important role in this regard. To this end, a delegation visit to Germany and Norway was organised by the GIZ-implemented IKI project Sino-German Cooperation on Climate Change – Climate Partnership from 5 to 11 November 2023, which facilitated Sino-European technical exchange of financial market professionals and academia.

 

Sino-German Workshop on Sustainable Finance (Photo Credit: GIZ)

Consisting of representatives from Climate Investment and Finance Association (CIFA), China Energy Conservation and Environmental Protection Group (CECEP), China Development Bank (CDB), Chinese Academy of Sciences (CAS), China Industrial Bank (CIB), and Shenzhen Municipal Bureau of Ecology and Environment (SMBEE), the Chinese delegation participated in workshops at the Frankfurt School of Finance & Management (FS) and Climate Analytics (CA), and met with German and Norwegian banks and research institutions. The study tour enabled the participants to learn about the current landscape of sustainable finance and climate finance in Europe and China, share insights on practices and products, and discuss opportunities for future cooperation.

 

Sino-German Workshop on Sustainable Finance

 

On 7 November, the Chinese delegation participated in the Sino-German Workshop on Sustainable Finance, co-organised by GIZ, CIFA, and the Sino-German Center of Finance and Economics (SGC) at FS, to exchange views on EU, German, and Chinese regulatory frameworks for sustainable finance and the role of banks in financing the sustainable transformation. After welcoming remarks by Ms Fatma Dirkes, FS Vice President, Prof Dr Horst Löchel, SGC Co-Chairman, and Ms Qi Lan, GIZ Climate Team Co-Team Lead, keynote speeches were delivered by the participating experts. Mr Zhu Qingfeng, Secretary General of CIFA and Chief Accountant of CECEP, spoke about sustainable finance practices in China, highlighting China’s achievements in providing guidance for the development of sustainable finance as well as the need for financial technology innovation and inclusive approaches. Subsequently, Mr Karsten Löffler, Co-Head of the FS Global Shield Solution Platform, introduced the audience to the German and EU policy frameworks for sustainable finance, covering current challenges, the integrated roles that the financial sector and regulators should play to close ambition gaps, and potential areas for Sino-German cooperation. After that, Mr Hu Guanghua spoke about CDB’s promotion of green finance through pushing for ESG alignment, supporting technology development, and creating innovative financial products. Next, Dr Julia Dieckmann, Head of Sustainable Finance Policy at DB, provided input on regulatory developments in transition finance, calling for clearer definitions and closer collaboration between policymakers, industry, and banks, before introducing DB’s approach to reduce financed emissions to meet its 2050 net-zero commitment.

 

Group Photo at the Sino-German Workshop on Sustainable Finance (Photo Credit: CIFA)

In a subsequent panel discussion, Mr Liao Yuan, Deputy Secretary General of CIFA and Board Director of CECEP, noted that there is still huge regulatory potential to address transition finance in China’s financial market and that capital needs to be raised from public and private sources to decarbonise high-emitting sectors, while Prof Dr Ulf Moslener, Head of Research of the FS-UNEP Collaborating Centre for Climate and Sustainable Energy Finance, emphasized the key role of net-zero commitments and long-term policy stability as prerequisites to drive transition finance. Moreover, Ms Yang Xiaoxi, Deputy Director of the Green Finance Department Group Coordination Division of CIB, and Mr Thomas Trepohl, Head of Treasury at Hauck Aufhäuser Lampe Private Bank, discussed the current financial instruments and products used in China and Germany to support the transition of difficult-to-abate sectors and gave examples of how their banks are supporting clients in the low-carbon transition. To conclude the workshop, Dr Zeng An, Assistant Researcher at the Institute of Science and Development of CAS (CASISD), elaborated on the main research priorities of her institute and key areas of international cooperation that will advance the agenda and ensure alignment of countries in supporting transition sectors.

 

Panel Discussion at the Sino-German Workshop on Sustainable Finance (Photo Credit: CIFA)

Sino-German Workshop on Climate Finance

On 8 November, the Chinese delegation attended a Sino-German Workshop on Climate Finance co-organised by GIZ, CIFA, NewClimate Institute (NCI), and CA at the latter’s Berlin office. The workshop provided an opportunity to exchange information on national strategic frameworks for climate finance, share examples of concrete actions and initiatives taken by central and local governments and the private sector, and learn about innovative research tools to better address climate risks in the financial sector.

 

Sino-German Workshop on Climate Finance (Photo Credit: GIZ)

Moderated by Dr Jan Sindt, CA Head of Implementation Strategies, the workshop opened with keynote speeches. Dr Zeng An introduced China’s policy framework of climate finance and investment, covering products and instruments, monetary policy instruments, and the carbon market, as well as the use of local pilots. Next, Dr Kai Kornhuber, CA Senior Scientist, provided insights into how CA, as a contributor to the Network for Greening the Financial System, engages in quantifying climate risks for finance sector stress testing, including through its self-developed Climate Impact Explorer. The third presenter, Mr Liao Yuan, spoke about climate risk quantification and risk management for enterprises and financial institutions. Afterwards, Dr Tim Mennel, German Energy Agency Head of Topic Area Energy Market Design, shared German experiences in financing renewable energy, touching on business models for power generators with and without government support. Finally, Ms Frauke Röser, NCI Co-Founder, and Mr Mo Ziqing from SMBEE shared best practices and policy recommendations on climate finance at the city level.

 

Group Photo at the Sino-German Workshop on Climate Finance (Photo Credit: GIZ)

Exchange on Sustainable Finance and Climate Finance

As part of the study tour, the Chinese delegation also met with representatives of Deutsche Bank, KfW, CICERO Center for International Climate Research, and Norges Bank Investment Management in Frankfurt and Oslo. These meetings allowed the experts to further deepen their understanding of how major European banks and sovereign wealth funds intend to reduce financed emissions in the context of diverse regulatory environments. There was also an opportunity to discuss the role of public financial institutions in supporting the transition to a low-carbon and sustainable economy through providing both climate and transition finance. Finally, the experts were introduced to recent trends in knowledge support to the financial sector from research institutions and the EU’s Carbon Border Adjustment Mechanism.

 

The practical exchange during the study tour strengthened mutual understanding of recent regulatory and practical developments and paved the way for deeper Sino-European cooperation on the issues of sustainable and climate finance. GIZ and CIFA will continue to work closely together to facilitate expert dialogues.

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