Editor's note: Matteo Giovannini is a finance professional at the Industrial and Commercial Bank of China in Beijing and a member of the China Task Force at the Italian Ministry of Economic Development. The article reflects the author's views, and not necessarily those of CGTN.

For decades, the global financial industry has been driven by an approach based on short-term performance with an excessive focus on meeting profit targets in each quarter while forgetting the role of strategy and long-term value creation.

The so-called "short-termism," guided by the goal of wealth maximization for the shareholder, has sadly demonstrated to be nearsighted and represent a major factor in undermining sustainable business models and deteriorating the trust built with customers, employees, and investors.

A shift in paradigm from shareholder value to stakeholder-focused model has seen China emerge in a leading position on a global scale due to its high level of responsiveness to environmental issues, demonstrating that the country is well-aware of the growing role that the green economy is going to play as a new engine of growth and development.

Therefore, it is not surprising to learn that the country, through a letter sent last week by Finance Minister Liu Kun to the International Financial Reporting Standards (IFRS) Foundation, has formally made public its candidature to host in Beijing the headquarters of a new international corporate sustainability agency.

The new body, which is set to supervise corporate rules on climate change and environmental reporting endorsed by G20 finance ministers and central bankers during a recent meeting in Italy, is expected to announce its hosting place before the UN climate summit in Scotland in November.

In my view, China's decision to support its capital city in getting assigned the new agency clearly shows the level of confidence that the country has reached after the progressive implementation of an array of green technologies, including hydro, wind, and solar power, that have contributed to turning megacities such as Beijing into a greener, cleaner, and more inclusive place to live.

A recent report from the American consultancy firm Boston Consulting Group (BCG) on the world's best places to live certifies this trend showing that now Beijing leads in Asia and precedes most of the globally celebrated urban centers such as Zurich, Sydney, Singapore, and San Francisco.

From a diplomatic perspective, the move represents a strong signal of continuity with China's decision to join the Paris Agreement in 2016 and with the pledge, made by Chinese President Xi Jinping at the 75th session of the UN General Assembly, to reduce greenhouse gas emissions and to develop a green and sustainable economy during the next four decades.

The decision to become a global protagonist in the future of the green economy demonstrates that the country is more than willing to engage with the rest of the world and, when necessary, to pioneer in fields where it has a competitive advantage and an unrivaled expertise.

Technological innovation has always represented a key pillar in China's development story, and the current green transformation makes this aspect even more critical due to the fact that technology enables more efficient use of resources, promotes productivity improvements, and provides the solution to historical problems such as the high level of carbon emissions and pollution.

The transition to a new paradigm of business that puts sustainable development at its core would not have been possible without the strong support of governments at all levels through an incremental green policymaking approach and a long-term vision as a result of well-crafted plans.

The recently launched Beijing green financial reform pilot zone that serves to mobilize and channel investments and resources into China's low-carbon economic transition and to develop green finance further is just one example of a strategic government policy. It has the ultimate goal of turning China's capital into an international center of green finance and promoting cross-border cooperation with countries that consider sustainability an irreplaceable element in their infrastructure projects.

Another example is the establishment of a new national stock exchange in the capital Beijing that is set to serve as a platform where innovative-driven SMEs can raise funds directly from private investors. The new bourse is expected to positively contribute, laying the groundwork for a progressive introduction of green finance best practices in the business ecosystem and for increasing the level of awareness towards a circular economy and sustainable finance.

Critics argue that Beijing may not be the best choice for establishing an international agency. I would like to underline that today's Beijing is not only the capital of the world's second-largest economy but is also home to the headquarters of the world's largest number of companies enlisted in the Fortune Global 500, a clear indication of an outstanding global recognition from a wide range of foreign governments and multinational companies.

The setting up in 2015 of the Asian Infrastructure Investment Bank (AIIB) provides concrete evidence of how a multilateral institution can easily operate in Beijing and how it can also set the standard in the industry in terms of sustainable finance. The decision of the bank, highlighted in its last corporate strategy document, to increase the investments in climate change mitigation and to set a very ambitious target of 50 percent of overall approved financing directed to green projects by 2025 is proof of how the green finance revolution is starting from China.

The opportunity to have assigned an important agency would not only represent an important feather in the cap for the city of Beijing but also grant a major recognition to a country that, through the consolidation of its position as a global leader in green finance, has rapidly gained a central role in the international financial system.

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