China has made green finance one of its major goals as it works towards sustainable development and carbon neutrality. CGTN's Gao Ang sat down with People's Bank of China Governor Yi Gang to discuss its role in promoting global green finance.

As China looks to achieve its carbon neutrality goal by 2060, the financial sector of the world's second-largest economy has been doubling down on efforts to provide support. Among its most critical players is China's central bank. To find out more about its strategy in promoting green transitions and global green finance, I spoke to Mr. Yi Gang, the governor of the People's Bank of China.

GAO ANG CGTN Reporter "Mr. Yi Gang, Thank you for talking to CGTN. Green transition requires massive capital, and the financial system can play an important role in this process. In recent years, what measures has the PBOC taken to encourage financial institutions to support green transition?"

YI GANG Governor People's Bank of China "Central banks can play a very important and positive role in green transition. The international community has reached a consensus about this. To facilitate green transition, People's Bank of China, we have done a lot.

"The People's Bank of China included high-quality green bond and loans as qualified collateral to the Midterm Lending Facility in 2018. Last year, we launched two new monetary policy instrument, namely carbon emission reduction facility and special central bank lending facility for green and efficient use of coal, both of which provide funds to qualified commercial bank at a low interest rate of 1.75 percent.

"As of the end of May, the People's Bank of China has provided over 210 billion yuan through the two facilities to financial institutions, which reduce emission by over 60 million metric ton of carbon dioxide equivalents, accounting for about 0.6 percent of China's annual carbon emission.

"Moreover, the People's Bank of China issued Green Finance Evaluation Guidance in May 2021, incorporating green loan and green bond into financial institutions performance rating, providing the right incentive. As of March 2022, outstanding green loan in China exceeded 18 trillion yuan, posting a rapid increase. Outstanding green bond reached about 1.3 trillion yuan, one of the largest in the world."

GAO ANG CGTN Reporter "What has the PBOC done to improve climate information disclosure and prevent fake reporting? What are some achievements?"

YI GANG Governor People's Bank of China "To promote better management of climate risk, the People's Bank of China conducted the first climate risk stress testing last year, where the biggest challenge was insufficient information disclosure. To promote climate information disclosure, the PBOC released the guidance on environmental information disclosure for financial institutions last year, defining requirements on the form, frequency, qualitative and quantitative information of the disclosure, and has guided over 200 financial institutions to prepare environmental information disclosure reports, including procedures to identify and assess, manage and control environmental risks, issuance of green loans and reduced emissions, as verified by third party agencies. Going forward, we plan to expand the pilot program nationwide."

GAO ANG CGTN Reporter "The PBOC has been actively advancing international cooperation in green finance through bilateral and multilateral platforms. What role has the PBOC played in developing global green finance?"

YI GANG Governor People's Bank of China "At the global level, the People's Bank of China has worked with all parties to mobilize social capital to address climate change. First, China co-chaired the G20 Sustainable Finance Working Group. The work group has completed the G20 Sustainable Finance Roadmap as an important global guidance for mobilizing social capital to address climate change. This year, our priority is to develop the framework for transition finance to guide social capital to support low carbon transition of high emission sectors. Second, we have made progress in harmonizing taxonomies with our European counterparts. Third, we have leveraged green finance to build a green 'Belt and Road.'

"Going forward, the PBOC will continue to strengthen international cooperation on green finance through multilateral and bilateral platforms to create an enabling environment for China to achieve the target of carbon peaking and neutrality."