Governance of green bonds in China

Green bonds serve as financial instruments for sustainable projects; however, their definitions and governing regulations exhibit significant global variability, thereby influencing the credibility and transparency of the green bond market. China, as an international trailblazer in implementing state-endorsed green bond taxonomies, has witnessed a swift expansion in its green bond market, propelling it to become the second-largest worldwide. Despite this growth, China’s green bonds are not all aligned with global standards, which could potentially decrease their global appeal. To explore the origin and impacts of the inconsistency, this chapter presents a comprehensive analysis of green bond governance in China, integrating both global perspectives and local nuances. It begins by providing an overview of the prevailing global standards for green bonds, subsequently outlining universally recognized best practices pertaining to their issuance. The focus then shifts to the specificities of the Chinese context, with an in-depth examination of the regulatory framework governing green bonds within the country. Additionally, the chapter scrutinizes the procedural elements involved in issuing green bonds in China. It culminates with a discussion of the derived findings and their implications.