SFC Correspondent Li Deshangyu in Huzhou

With the accelerated momentum of global climate governance, green investment and financing are expanding rapidly. Capital is increasingly flowing into sectors such as renewable energy, energy efficiency, and environmental protection. However, global sustainable development continues to face significant challenges. For example, the United States’ withdrawal from the Paris Agreement has raised concerns about investor confidence in green finance. Moreover, ESG standards remain fragmented across regions, with no unified global framework in place.

In an interview with SFC, Ma Jun, Chairman of the Green Finance Committee under the China Society for Finance and Banking, shared his insights on global carbon markets, ESG standards, and other key issues in green finance.

SFC Markets and Finance: What are the impacts of the United States' withdrawal from the Paris Agreement on global green finance? 

Ma Jun: The United States withdrew from the Paris Agreement. In fact, it was not just this one agreement. There were many other international platforms, agreements, conventions, and mechanisms that the U.S. withdrew from. These actions can have a certain impact on global sustainability.

Most people are probably more concerned about the fact that, after the U.S. federal government withdrew. Through these mechanisms it used to provide funding to international organizations, funds, and some countries. The funding related to green climate initiatives and development projects is gone now. Regarding this, I don't think the impact is very severe based on my own estimation.

The most critical point is that the actions of the United States may affect the confidence of the private sector. The scale of the private sector, including U.S. banks and financial institutions, is quite large, with assets totaling in the trillions of dollars. If their confidence is lost and they stop allocating a significant proportion of their funds to green futures, the impact on the global level would be substantial. Therefore, the global community, or rather the international community outside the United States, including China, Europe, and the BRICS countries, should play a greater leadership role in boosting confidence. They should organize mechanisms, standards, platforms, and capacity-building efforts. This will ensure that social capital, known internationally as private capital, continues to participate in green and low-carbon investments at a high level.

SFC Markets and Finance: Has China's carbon market reached the right moment for global development?

Ma Jun: The issues surrounding carbon markets are quite complex. If we divide the carbon market into two parts, one is the mandatory carbon market, as the ETS, and the other is the voluntary carbon market, as the CCER. Both types of carbon markets will need to move towards internationalization in the future, but the difficulties vary.  

The mandatory carbon market is relatively more sensitive. For many countries, it involves the issue of pricing power. Some countries are reluctant to cede pricing power to foreign entities. When many countries are unwilling to "cede control", it creates a situation of isolation between each other, a problem that cannot be resolved in a short period of time.  In contrast, the voluntary carbon market has a higher possibility of achieving a certain degree of interconnectivity.

Of course, some experts have also put forward ideas that I think are quite good. For instance, there are Chinese-funded enterprises operating overseas that undertake green projects capable of generating qualified emission reductions. If these emission reductions could be brought into China's CCER market for trading, this would, to a certain extent, facilitate connectivity. Although it wouldn't be a comprehensive integration, it would mainly involve transactions between Chinese-funded enterprises. However, it would still be a form of cross-border trading. I believe this idea is worth further exploration.

SFC Markets and Finance: How are ESG standards formulated for different industries and countries?

Ma Jun: On the Lack of Uniform ESG Evaluation Standards, this issue exists both internationally and domestically. It is not just a challenge we face—in fact, every country is discussing this matter. Among the many different ESG disclosure standards, which one should we follow? Does China have a complete, unified, and self-consistent ESG disclosure framework?  Yes, it does—the ISSB standards introduced by the Ministry of Finance. However, these are not currently mandatory. They serve as a voluntary, framework guideline. But at some point in the future, certain elements may become compulsory.  

I believe that under this framework, whether it’s the standards introduced by the China Securities Regulatory Commission, those formulated by the People's Bank of China, or those developed by other regulatory bodies, they should all align with the overarching framework. They should further refine the details within this larger framework, making mandatory what needs to be mandatory— such as requiring specific data points to be disclosed at certain times. This would create a self-consistent, relatively comprehensive, and appropriately mandatory ESG disclosure policy.

SFC Markets and Finance: How do you view the price fluctuations in China's national carbon market and its future development?

Ma Jun: In the medium to long term, I believe the overall trend will be upward. There are already international benchmarks to refer to for example, the EU carbon price at one point reached the equivalent of around RMB 1,000 per ton. At the same time, there are many green technologies that China is eager to develop, but we currently lack sufficient incentive mechanisms to attract private capital. The main reason is that the costs are still relatively high. In the future, many green technologies will require a higher carbon price than we see today in order to generate the right incentives and financing effects. A higher carbon price will also encourage more people to participate in innovation, and other investors will begin to assess the value of low-carbon technologies based on the carbon price. This creates greater motivation to engage in emissions-reduction innovation. Of course, it's hard to predict how much carbon prices will rise each year. But if capital markets are more involved, the upward trend could become more stable. The involvement of carbon finance will support the healthy development of the carbon market and help generate price signals that better reflect real market value.

Chief Producer: Zhao Haijian

Supervising Producer: Shi Shi

Editor: Li Yinong

Reporter: Li Deshangyu, Yang Yulai

Video Editor: Li Qun, Intern Rao Yetong

New Media Coordination: Ding Qingyun, Zeng Tingfang, Lai Xi, Huang Daxun

Overseas Operations Supervising Producer: Huang Yanshu

Overseas Content Coordinator: Huang Zihao

Overseas Operations Editors: Zhuang Huan, Wu Wanjie, Long Lihua

Produced by: Southern Finance Omnimedia Group