China has raised the bar for issuances in the world’s second-biggest green bond market, taking a major step towards adopting global standards and eliminating “greenwashing,” reports the South China Morning Post. Starting this month, the Shanghai Stock Exchange, China’s premier bourse, requires 100% of proceeds from green bond issuances to be invested in green projects such as clean energy—compared with at least 70% previously—according to a notice seen by Reuters.
Separately, the China Securities Regulatory Commission (CSRC) has instructed both the Shanghai and Shenzhen bourses to revise rules to bring issuances of such bonds in line with the newly published China Green Bond Principles, said two sources.
China published the principles, a set of self-disciplinary green bond frameworks largely based on international standards, on July 29. The planned rule changes would make the guidelines mandatory for exchange-traded bonds, and reduce the risk of greenwashing, or exaggerated environment-friendly claims.