China has the opportunity to play a critical and fundamental role in tackling climate change, through its influence and approach domestically, regionally and globally
China’s leaders recognise that green finance is essential to meet China’s climate ambitions. Through its International Climate Finance portfolio, the UK government is committed to working with China to cut emissions and achieve a more sustainable future. Benefitting from an increasingly receptive environmental political economy, UK PACT therefore looks for opportunities to align green finance and Environmental, Social and Governance (ESG) standards with international standards.
China-UK PACT is aligned with government demand and seeks to mature China’s green financial markets by focusing on five areas:
Harmonisation: aligning Chinese and international green finance taxonomies; Transparency through disclosure of climate-related financial risks and ESG uptake; Innovation - developing innovative green financial products and services; and Capacity Building – domestically - accelerating implementation of national green finance policies at local levels and internationally for Chinese financial institutions using green investment tools and approaches internationally. In the first round of funding, China-UK PACT funded 8 projects and one skill-share (see success stories below).
GFLP seeks to build capacity across relevant policy makers, practitioners, and their organisations so that they can collectively develop and implement green finance policies and practices.
These policies and practices enable private investments to fund low-carbon projects leading to tangible emission reductions. Since its launch, the project has trained 600 public and private sector professionals from 60 countries, resulting in a number of requests to strengthen national green financial markets. For instance, GFLP experts helped to design Mongolian National Green Taxonomy, which was approved by Mongolian Financial Stability Board in December 2019.
Building on three years of UK-China green finance collaboration, this project brings together experts from both countries to share experiences across different working groups.
One of the working groups developed and focuses on the Green Investment Principles (GIP), China’s first financial initiative for greening investment. The 35 signatories to the GIPs are committed to more sustainable investments overseas, allowing China’s Belt and Road Initiative, a China-led global portfolio of infrastructure developments and investments, to become aligned with international sustainability standards. The growing membership base also reflects growing institutional commitment to climate action in China. Find out more here
The second China-UK PACT funding round closed in August 2020.
Projects were assessed as part of an open call to prospective applicants following two stages: 1) Expression of Interest (EOI) to outline how a proposed project responds to the call; and 2) a request for detailed proposals for those shortlisted at the EOI stage.
Please see across the updated timeline for the current application process.