A Probe Into The Connotation, Mechanism And Practice Of Green Finance

In June2003, the international finance corporation and the world famous bank jointly initiated the "Equator Principles" which are the international financial industry benchmark and provide a framework for ecological environment and social risk assessment on project financing, considering the comprehensive environmental factors and social issues on project financing voluntarily based on the Commercial Banks. And the "Equator Principles" reflect the corporate social responsibility. Since then the green financial system based on the Equator Principles has begun to spread throughout the world. Finance as the funds backers of ecological environmental protection, so its status or role is self-evident. Nowadays, international organizations, governments and enterprises have universally focused on the green finance. After the international financial crisis, countries around the world strive to promote economic recovery. Meanwhile, they coincidently focus on accelerating transformation of economic growth pattern. Low carbon economy featuring low energy consumption, low pollution, high utilization and high efficiency, has become the core of new economic growth point. Low-carbon economy with large investment, long cycle, high technology and so on, not only needs to rely on the tax benefits and financial support of government, also needs to form related financial services. So the transformation of traditional economy to a low-carbon economy and the results of the transformation of the economic development urge the reform of traditional finance to green finance.Currently, our country is in the stage of accelerating the development of industrialization and urbanization, also in the key period of the economic structural adjustment and industrial structure optimization and upgrading. But, energy resource consumption and environment pollution are becoming increasingly serious, as well as the contradiction between economic and social development and resources and environment constraints is increasingly highlighted. Eventually, adjusting and optimizing industrial structure and improving the economic growth mode are urgent task of our country, for "High-polluting, high-energy-consuming and resource-based products" in our country industrial structure is higher. The18th National Congress of the CPC proposed to form the growth mode of industrial structure and consumption patterns to save energy resources and protect the ecological environment. Moreover, government would make great efforts to solve the prominent environmental problems which endanger people’s health and economic and social sustainable development to build a resource-conserving and environment-friendly society. Finance as the core of the national economy and social capital, must play a major role in the field of energy conservation and environmental protection. And financial institutions further strengthen the sense of social responsibility to make the financing activities always reflect requirements of energy saving and environmental protection, which is consequently the financial inherent requirement of sustainable development. Therefore, government and banking financial institutions generally accept and standardize the green financial development in China, and through the leverage to pry the rapid development of green economy.At present, foreign theoretical research on green finance concentrates mainly on fields of its concept, content, effect, regulatory policy, monetary instrument and assessment system. Practically,"Equator Principles", as well as carbon financial products, green crediting and green official business, get a far-reaching promotion overseas. Furthermore, all those are developing maturely as their regime and mechanism is clear and development of financial institutions and protection of ecological environment have achieved a win-win effect. On the basis of referring foreign research and practice, domestic professional’s discussion focuses on three aspects. They are necessity and meaning of green finance, relation between green finance and sustainable development, and recommendation for domestic policy. Relative to our theoretical research on green finance, it started late practically as policies and regulations need improvement. It is also necessary for financial institutions to strengthen their understanding and investment on green finance.The paper is aimed to know entirely about green finance, to re-define "green finance" from the angle of win-win, to structure its mode of action, and to state meaning of green finance from the respect of nation, enterprise, financial institutions and ecological system. Through analyzing experience and lesson of developing green finance at home and abroad, the paper will offer reference and enlightenment for our development of economy. Especially, it proposes separately the related suggestion on green finance and industrial progress for the development of the five economical zone in Sichuan province.