SSE Leads Innovation in Green Finance: Enhancing Green Indices, Funds, and Bonds

Translated from Shanghai Securities News—www.cnstock.com

(Shanghai Securities News, www.cnstock.com) (Reporter Sun Xiaocheng) Recently, the China Securities Regulatory Commission issued the Implementation Opinions on Enhancing Capital Market's Efforts in the Areas of Technology Finance, Green Finance, Inclusive Finance, Pension Finance, and Digital Finance (hereinafter referred to as "Implementation Opinions"). The Implementation Opinions clearly outlines the need to enhance the green finance standards in the capital market and expand the range of green financial products.

In recent years, focusing on the crucial aspect of green finance, the Shanghai Stock Exchange (SSE) has been actively innovating in the realm of green indices, continuously enhancing a sustainable index system that encompasses environmental, social and governance (ESG) indices, green themes, and climate themes. In 2024, nine green indices were launched, including the SSE STAR ESG Index and the CSI SH-SZ-HK New Energy Vehicles Thematic Index. Among them, the CSI SH-SZ-HK New Energy Vehicles Index and others concentrate on the new energy vehicle industry, the China Ocean Economy Stock Price Index targets the marine economy, and the CSI Changzhou New Energy Industry Index signifies local green development.

The SSE has released the SSE STAR ESG Index to enhance the index framework. This complements existing green bond indices, including the CSI AAA Green Bond Index, and involves a joint release of the CSI CITIC Bank Biodiversity Credit Bond Select Index. Additionally, revisions to the CSI Energy Storage Battery Thematic Index were made. By the end of 2024, the SSE, in partnership with China Securities Index Co., Ltd., launched a total of 147 indices related to ESG and sustainable development, covering equities, bonds, and multi-asset indices.

As the green index system expands, the SSE continues to increase the variety of green investment options available. The SSE green indices now track 89 products, reaching 84.131 billion yuan, thereby presenting investors with a wider range of green investment choices. By the end of 2024, 46 green exchange-traded funds (ETFs) had been listed on the SSE, achieving a scale of 34 billion yuan, significantly promoting the integration of the capital market with sustainable development ideals.

The green bond market on the SSE continues to undergo constructive advancement. On one hand, the infrastructure for the green bond market has become increasingly sophisticated. The SSE has updated its green bond regulations by extending the fund replacement period from 3 to 12 months for investments in green projects using capital raised through green bonds. This initiative aims to invigorate market participants' involvement in green bond investment and issuance, promoting the continued sustainable growth of the green bond market.

On the other hand, the issuance of green bonds remains robust. In the context of high-quality advancement of local bond markets and industrial enterprise issuers engaging with the SSE, the SSE actively advocates for innovative financial instruments like green bonds and low-carbon transition bonds to various market stakeholders. In 2024, the SSE highlighted eight instances of green bond financing, encouraging enterprises to utilize innovative capital market products to drive green and low-carbon transformations. In 2024, the SSE saw a total issuance of green bonds amounting to 140.3 billion yuan. Among these, green corporate bonds had an issuance scale of 59.8 billion yuan, an 8% increase from the previous year, while the issuance scale of green asset-backed securities (ABS) reached 80.5 billion yuan.

In recent years, several publicly offered real estate investment trusts (REITs) projects focused on sustainability have successfully debuted on the SSE. In 2024, two environmentally conscious ventures, the China Securities Ming Yang Smart New Energy REIT and China Asset management TBEA New Energy REIT, were listed on the SSE, amassing a funding capacity of 2.45 billion yuan. By the end of 2024, six green REIT projects were listed on the SSE, covering sectors like new energy, environmental protection, and photovoltaics. These projects amassed a combined financing scale of 15.58 billion yuan, thereby promoting the integration of the green industry with capital markets and bolstering the advancement of the green economy.

The above information is provided for reference purposes only and does not constitute investment advice.