From 13 to 20 October 2024, the Sino-German Cooperation on Climate Change – Climate Partnership project organised a study tour on sustainable and climate finance to Europe in collaboration with the Climate Investment and Finance Association (CIFA) of the Chinese Society for Environmental Sciences. The study tour fostered dialogue between China, Germany, and the European Union on sustainable finance frameworks and policies, on the harmonization of international standards, and on the mobilization of financial flows that are aligned with the Paris Agreement’s green and low-carbon transition goals.
Delegation and objectives
Led by Zhu Qingfeng, Chief Accountant of China Energy Conservation and Environmental Protection Group Corporation (CECEP), the delegation included leaders and experts from prominent Chinese institutions such as the China Development Bank, Huaxia Bank, and Institute of Finance and Sustainability. Delegation members aimed to deepen their understanding of sustainable finance frameworks in the EU, engage with counterparts on international cooperation, and explore innovations in sustainable financial instruments.
Key engagements in Germany and the EU
The delegation participated in several workshops and exchange sessions, beginning with the Sino-German Seminar on Sustainable Finance and Climate Finance in Berlin. Here, discussions centred around the EU Carbon Border Adjustment Mechanism (CBAM), the Corporate Sustainability Due Diligence Directive (CSDDD), and developments in transition finance products. The event, hosted by GIZ at its Berlin office, included representatives from Germany’s Federal Foreign Office and leading think tanks who emphasised the importance of policy innovation and private capital mobilisation.
In Frankfurt, the delegation attended the Sino-German Workshop on Sustainable Equity Products and Sustainability Disclosures at the Frankfurt School of Finance and Management. This workshop was part of the broader Sino-German expert dialogue series on sustainable financial products and practices and highlighted the importance of fostering expert platforms to support peer-learning and knowledge exchange. Keynote speeches and panel discussions offered insights into sustainable equity products, ESG investments, and emerging trends in sustainability disclosures.
Discussion highlights
Promoting sustainable investments in China and Europe
The rapid growth of China’s sustainable equity investment market reflects increasing policy support, diversified strategies, and efforts to attract global investors. Stringent ESG disclosure standards are being prioritized to ensure the authenticity of investments, while the country’s openness to foreign participation in green sectors broadens financial opportunities and fosters international collaboration.
In Europe, mobilising financial and social capital is seen as a cornerstone of sustainable development. Efforts are focused on overcoming challenges such as regulatory complexities, conflicts between new and existing frameworks, and data standardisation issues. Germany, as a leader in Europe’s green transition, is emphasizing capacity building and innovation, particularly through fintech, to advance its sustainability goals. Quantifying risks and setting measurable financial portfolio targets, such as assessing carbon footprints and climate-related financial impacts with advanced tools, are integral to these strategies.
Innovations in financial products
Advancements in index-based and derivative financial products were also a key focus. Developments in index-based and derivative products are helping distinguish traditional benchmarks from ESG-focused indices in Germany and Europe. Green loans and funds in China, such as the National Green Development Fund, are supporting projects in renewable energy, infrastructure, and environmental restoration, showcasing how collaborative efforts between government and financial institutions can address environmental challenges.
Sustainability disclosure: a pillar of sustainable finance
The delegation’s discussions in Frankfurt and Brussels placed strong emphasis on sustainability disclosures. Clear and comparable sustainability disclosure remains a central focus, fostering investor confidence and streamlining capital flows. Aligning national disclosure policies with international guidelines is essential to achieving consistency and transparency. In the EU, disclosure requirements are continuously being expanded across industries, while initiatives such as the Banking Net Zero Alliance are helping countries like Germany to adopt ambitious climate goals. Despite the high costs associated with reporting, participants agreed on the long-term benefits of improved transparency.
Strengthening bilateral cooperation
The delegation’s visit included bilateral exchanges with prominent organisations such as the Association of German Private Banks (BdB), DZ Bank, and GIZ’s headquarter in Eschborn. These sessions explored topics like transition finance, climate risk management, and the integration of sustainability into financial decision-making frameworks.
At the European Commission, the delegation engaged with representatives from the Directorate-General for Climate Action (DG CLIMA) and Directorate-General for Financial Stability, Financial Services, and Capital Markets Union (DG FISMA). Discussions focused on aligning financial flows with the Paris Agreement’s climate goals and how the EU policy package has integrated industrial policies, fiscal policies, and sustainable finance policies to achieve this goal.
A visit to the European Financial Reporting Advisory Group (EFRAG) offered insights into the EU’s sustainability reporting standards. Participants explored strategies for mutual recognition of international standards to streamline global reporting efforts.
