Finance is the blood of the national economy and can play a complementary role with the best financial investment. Green finance optimizes the allocation of financial resources, regulates the flow of funds to green and low-carbon fields, promotes the efficient use of resources and improves the quality of the ecological environment. In other words, green finance mainly tilts resources towards green production and lifestyle through market means, which can guide more market players to actively seek green transformation, thereby promoting sustainable economic and social development.
The main feature of sustainable economic and social development is to focus on long-term development, which must meet the needs of the present without compromising the ability of future generations to meet their own needs, and one of its important manifestations is the protection of the natural environment. Green finance can leverage more financial capital and social capital to invest in green and low-carbon industries and enterprises that adopt green production methods, so that enterprises that adopt green production methods can obtain funds at a lower cost, so as to gain a dominant position in the competition, and at the same time promote industrial transformation and upgrading, improve investment efficiency, form a positive cycle of green development, and reduce the dependence of sustainable development on financial investment.
Green finance is conducive to promoting green technology innovation. Green development does not require the immediate and complete cessation of production in highly polluting and energy-intensive industries, but mainly to promote green technological innovation within enterprises, especially heavily polluting enterprises. Green finance can guide capital flow to companies with more successful green transformation, which will bring a demonstration effect to other enterprises in the industry, encourage enterprises to continuously innovate green technologies, seek advantages in green transformation, and then promote the green transformation of the entire industry.
In addition, green finance can help companies that have made progress in the field of green technology innovation to achieve more returns through technology transfer and other means. Through the trading of green financial products, the green finance market enables the value of new green technologies in the market to be effectively discovered and circulated, thereby further incentivizing beneficiary enterprises to engage in innovative activities.
Green finance can help facilitate environmental and climate risk management. In the context of the intensification of the global ecological environment and climate change, the prevention of non-traditional financial risks such as environmental and climate risks has become a key issue of common concern for financial institutions and other market players. The ecological environment and climate change affect all aspects of human economic and social development, and green finance has shown broad prospects in preventing the negative impact of these risks.
For example, some financial institutions in China are trying to measure the environmental friendliness, low-carbon development potential and resilience of enterprises in response to climate change, and try to form a comprehensive evaluation of the environmental and climate performance of enterprises. On the one hand, the results of such evaluations are for the reference of relevant users, and on the other hand, they also empower all aspects of the whole process of credit management, so as to establish a link between the financial market business and the level of environmental and climate risk management of enterprises, so as to promote enterprises to improve their environmental and climate risk management capabilities.
Excerpted from "Doing a Good Job in Green Finance to Promote Sustainable Economic and Social Development", originally published in Wu Weixing, author of "Guangming**".