Analysis: Ma Jun’s departure comes amid major China environmental finance push

The reported departure of Ma Jun, chief economist of the Research Bureau at the People’s Bank of China, comes as the country has been making a serious push on environmental finance standards.

Ma, not to be confused with the environmentalist of the same name, is something of a hero within the environmental finance sector and has been the public face of green finance in China; he is said to be starting a new life in academia. He joined the bank in 2014 after a 13-year career at Deutsche Bank.

Ma – nicknamed “Mr. Green Finance” – has often been in communication with RI, though he made no reference of his change of status in his most recent email to us this week.

Only last month, in a speech in Beijing, Ma said the next step in its strategy to scale up green finance was to promote recommendations from the Taskforce on Climate-Related Financial Disclosure (TCFD), and to implement mandatory disclosure for corporates.

He told the audience: “Disclosure of environmental information at the corporate level is inadequate. Our next priorities are to implement mandatory environmental information disclosure requirements for listed companies and bond-issuers in China, and to promote the TCFD’s recommendations for voluntary disclosure of climate-related financial risks internationally.”

It was not clear how the PBoC planned to “promote” the recommendations, although in guidelines previously put out by China’s seven ministerial agencies, including PBoC, there are proposals for banks and institutional investors to perform environmental stress tests. China’s Asset Management Company is already undertaking these stress tests, according to Ma’s speech.

Ma’s status as chair the Green Finance Committee – a state initiative to scale up green finance – is also unclear at this stage. In his speech he said the committee will “organize experts to formulate a Study Report on Environmental Risk Analysis Methods for Financial Institutions to be implemented as industry practice”.

The TCFD was launched in 2015 by Mark Carney and the Bank of England has been working closely with the PBoC through the Green Finance Study Group – a body created by the G20 under China’s presidency and chaired by the two central banks. Ma’s reported departure could leave a hole in this influential body.Ma’s exit also comes as China has applied to create international green finance standards, saying the market needs “urgent” clarification to avoid confusion for investors.

The Standardisation Administration of China (SAC) – the country’s official standards body – has put forward a proposal to the International Standards Organisation (ISO) to lead work on the development of standards titled Green Finance: Assessment of Green Financial Projects.

ISO is a global body comprising representatives of the standard-setting organisations of 163 countries. It is behind more than 21,000 international standards and certifications. Earlier this year, it gave the go-ahead for a working group to develop its first standards relating to green finance. The working group is led by Stan Dupre of the 2 Degrees Investing Initiative and Massamba Thioye, head of financial institution relations for the UNFCCC.

Now, the ISO is deciding whether to approve another working group, led by China, which will look into green finance, rather than just climate finance. The proposals include the creation of a “framework for assessing green financial projects, including principles, scope, methodologies, procedure, reporting, and assessment bodies”, in order to help investors and others identify and assess green financial projects.

“As most green financial activities are based on projects, it is difficult to allocate financial resources, manage risks, evaluate progress, understand impact, communicate information, and design policy and regulations without appropriate definitions and classification of green financial projects.” The vote from ISO on whether to permit the creation of a working group to develop the standards is due on September 20.

The People’s Bank of China has been working with the European Investment Bank on ‘harmonizing’ the Chinese and European expectations of green finance. This is not expected to directly result in China tightening its guidelines – although the catalogue is also reported to be under review – but it aims to identify the similarities and differences between the two sets of expectations, to make it easier for investors to understand.

With the public face of much of this work now apparently out of post – and if reports are to be believed, not being replaced – those with an interest in green finance will no doubt feel they have lost a major ally.

With reporting by Sophie Robinson-Tillett.