China stock regulator vows more environment focus, green finance

SHANGHAI (Reuters) - China’s securities regulator said it will increase its focus on green financing and environmental issues for listed companies after President Xi Jinping named the environment as a major political priority.

The China Securities Regulatory Commission (CSRC) said it will look to strengthen environmental responsibility and disclosure by listed companies, promote green finance and focus more on environmental issues when reviewing share market listings and mergers.

It also promised to “actively support” green bonds, encourage environmentally friendly companies to use the capital market and look for new ways to finance environmental protection.

President Xi on Saturday identified the environment as one of the ruling Chinese Communist Party’s political priorities. He said the country needed to strengthen efforts to ensure the environment was “fundamentally improved” by 2035, and vowed to make full use of the state’s centralized authority to resolve existing problems.

“We must deeply understand that the ecology and environment is a major political issue related to the mission of the Party,” the CSRC said in its statement published late on Monday.

Other government departments have scrambled to respond to Xi’s speech, with the Ministry of Natural Resources promising on Monday to establish new land utilization standards to prevent environmental damage. It also said it would draw up a national “land space” plan to improve the way land use was managed.

China launched a “war on pollution” in 2014 in order to reverse the damage done to its skies, rivers and soil since it started opening up its economy in 1978.

The country has launched a series of crackdowns on polluters as well as the local governments that protect them, but has also been looking for ways to “normalize compliance” by creating more market incentives to clean up.

The CSRC said it would work to introduce more market mechanisms to help fight the war on pollution, including new types of futures products covering carbon emissions.

The Economic Information Daily, a newspaper run by state news agency Xinhua, reported on Monday that the Ministry of Ecology and Environment was looking into the possibility of developing cross-regional emissions quota trading.

China is also planning to launch a mandatory renewable power trading platform that will force regions to source a certain amount of electricity from green sources and buy certificates to make up any shortfall.

Reporting by David Stanway; editing by Richard Pullin