China has stepped up efforts to meet its Sustainable Development Goals (SDGs), with financial institutions providing more services and funding toward the green agenda, although more is needed, a senior scholar told CGTN on Sunday at the China SDG Finance International Forum at the 2022 China International Fair for Trade in Services.

China has committed to peak carbon emissions by 2030 and reach carbon neutrality by 2060. Data released by the Ministry of Ecology and Environment shows that China's carbon emissions in 2020 were 48.4 percent lower than 2005 levels, at the higher end of China's target of reduction by 40 to 45 percent.

The country has also invested heavily into renewable energy funding, limit the operation of coal plants and establish a national carbon trading board using a market-based mechanism to set prices for carbon units.

To reach the carbon neutrality goal, China will need to funnel trillions of dollars in green financing into key industries including energy, utility, steel, transportation, and construction. Key issues like the ways to get required funding as well as efficient allocation will determine the pace of this green transition.

"Public capital can only provide 10 percent of the total funding needed and the rest of the 90 percent should come from social capital, namely financial institutions,” said Wang Yao, director general of the International Institute of Green Finance at the Central University of Finance and Economics.

"Financial institutions should add carbon peak and carbon neutrality goals into their strategic planning and organization structures. Most importantly, financial institutions should make more services and products available on the market," said Wang.

To support sustainable development goals, China's capital markets have issued several financial products to help green industry firms dealing with clean energy, green transportation, and climate change.

China's green financial market has registered strong expansion in recent years. Funds raised through green bonds hit 409.9 billion yuan ($59.4 billion) during the first six months of this year, up 67 percent year on year, Shanghai Securities News reported, citing financial data provider Wind.com. Green bonds accounted for 3.87 percent of total bond issuances during the same period, increasing 1.65 percentage points from a year ago.

As of July, China has issued a total of 182.7 billion yuan in carbon emission reduction support tools and has supported banks to provide 304.5 billion yuan in carbon emission reduction loans, resulting in a cut of over 60 million tonnes of carbon emissions, according to the People's Bank of China (PBOC). 

The PBOC has included Societe Generale (China) and Deutsche Bank (China) Co. in this program in August, which will encourage more foreign-funded banks to participate in the country's carbon reduction process.