China Green Bond Principles

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The China GBPs were published for the forst time in mid-2022 by the China National Association of Financial Market Institutional Investors (NAFMII) and the China Green Bond Standard Committee – which is also backed by the People’s Bank of China (PBoC) and the China Securities Regulatory Commission (CSRC)

They are broadly aligned with the Green Bond Principles administered by the International Capital Market Association (ICMA). However, work remains to finalise domestic harmonisation of rules in China and sharpen requirements around working capital eligibility.

Under the previous green bond guidelines in China, non-financial issuers were allowed to allocate a proportion of their green bond proceeds to projects which were not explicitly judged as ‘green’. The minimum ‘green’ element was 70% of total use-of-proceeds under CSRC guidelines for exchange-traded corporate green bonds, and 50% under National Development and Reform Commission (NDRC) guidelines for state-owned enterprises.

The new China GDPs however require that 100% of the use of proceeds for a green bond must be allocated to eligible green projects. Regular reporting is also required, which was not the case under the previous guidelines (the 2021 edition of the Green Bond Endorsed Project Catalogue.) “Clean coal” projects have been removed from the list of eligible projects.

Several international standards and guidelines are explicitly mentioned in the China GBPs, namely the ICMA GBPs, International Platform on Sustainable Finance (IPSF) Common Ground Taxonomy (CGT) and EU Taxonomy as being viable for use when choosing eligible green assets for some issuers.

Some areas of divergence remain between Chinese green bonds and international standards, for instance the explicit allowance of non-‘green’ working capital under previous guidelines. (Environmental Finance).


Environmental Finance: China green bond principles 'important' but imperfect