HONG KONG: China's central bank on Saturday warned that climate change and a global move to a low-carbon economy posed risks for domestic financial institutions and said stronger regulation was required.
Loans to high-carbon industries account for a relatively high proportion of financial institutions' assets in China, he said. "Therefore, [we] should strengthen financial regulations, conduct stress tests and other means to guide financial institutions to continuously improve their green financial capabilities in accordance with the carbon peak and carbon neutral timetable," he said.
Xuan said globally the approach varies from voluntary participation to mandatory regulation and called on regulatory bodies to gradually implement mandatory, comprehensive and quantitative climate disclosure requirements.
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