Improved norms will help vitalize green investment

Editor's note: China's financial, sci-tech and environmental policies will be the drivers for green and low-carbon development in the 15th Five-Year Plan (2026-30) period. China Environment News spoke to Shi Yichen, deputy director of the International Institute of Green Finance at the Central University of Finance and Economics, about China's green investment policies. Below are excerpts of the interview. The views don't necessarily represent those of China Daily.

Green investment mostly focuses on five areas: energy, industries, transportation, rural-urban construction and agriculture. Over the next five years, China is expected to refine its green investment policies through a combination of structural adjustment and systemic upgrades. Phasing out high-carbon and outdated production capacity and promoting energy-saving renovations in key industries such as steel, nonferrous metals and building materials will free up resources and space for low-carbon industries.

At the same time, China will continue building a modern power system, scaling up wind, solar, hydro and nuclear energy to ensure that new electricity demand is mostly met by clean energy. Expanding the coverage of the national carbon market and strengthening carbon pricing signals will raise the operating costs of high-emissions industries, enhance the competitiveness of low- or zero-carbon projects and encourage capital to flow toward technologies and enterprises that are highly efficient at reducing emissions.

The following steps can help improve both the effectiveness and quality of green investment. First, China needs to set clear and operational criteria for identifying green projects and assets. It should continue improving its top-level framework and develop a coherent system of green standards. This includes aligning with mainstream international classification systems while reflecting China's industrial structure and development priorities. By building on experience from green bonds and green credit, the criteria can be gradually rolled out to ensure consistency and execution.

Second, policy incentives and financing channels need to be more accessible. Establishing "green channels" for the approval of qualified projects and enterprises would expedite initial public offerings, refinancing and green credit. A diversified policy toolkit ranging from fiscal subsidies and tax incentives to low-interest loans can provide targeted support at different stages of development. Complementary measures in research and development, as well as talent recruitment would further encourage firms to pursue green transformation.

Third, stronger information disclosure is essential for building trust in green investment. Clear guidelines on reporting green revenues, emissions-reduction outcomes and environmental risk indicators would improve transparency and comparability across financial instruments. A well-designed incentive and penalty mechanism is also needed. High-quality disclosure should be rewarded, while false or misleading claims should face tougher penalties. Independent verification by qualified third-party institutions will help ensure the reliability of green data and reduce systemic risks.

Fourth, public platforms and institutional capacity must be strengthened. Establishing national or regional green project libraries and asset information platforms would make data more accessible and traceable, lowering the cost for investors to identify credible green opportunities. Continuous capacity-building efforts through training, case studies and investor education would be of help to regulators, financial institutions, enterprises and service providers.

Finally, green investment should be integrated with green consumption and green production to create a holistic development ecosystem. Regulators should connect circular-economy goals and consumption-upgrade strategies with the green-transition needs of supply chains.

By leveraging digital economy industries and promoting coordinated actions among "chain master" enterprises and specialized and new small and medium-sized enterprises, China can accelerate the shift from green consumption finance toward a full-cycle green finance system that is rooted in traceable carbon accounts and credible labeling.