Former US Treasury Secretary Paulson working with China to launch green building fund

Ex-Goldman Sachs chief set up institute in 2011.

The institute founded by Hank Paulson, the former Chairman and CEO of Goldman Sachs who was US Treasury Secretary under President George W. Bush, is working with the Chinese government to help launch a green building fund.

The Paulson Institute is working with China to help launch a Green Building Energy Efficiency Fund, which would pioneer new green finance mechanisms to facilitate the development of environmentally sustainable buildings.

Buildings present a particular environmental opportunity, as some 30% of global carbon emissions come from the energy used in buildings. “With the right regulations and finance mechanisms in place, emissions could drop significantly,” Paulson said.

The institute was founded in 2011 at the University of Chicago to strengthen US-China relations and to advance sustainable economic growth and environmental protection in both countries.

Paulson, a long-time supporter of environmental NGO The Nature Conservancy, where he is a former board chair, is also co-chair with Michael Bloomberg of the Risky Business initiative which raises awareness of the projected economic impact of climate change.

That group features other heavy hitters like ex-Treasury Secretary Robert Rubin and George Schulz, Secretary of State under Ronald Reagan.

Over the weekend the Paulson Institute and the Green Finance Committee of China Society for Finance and Banking convened a symposium of global finance leaders and experts to discuss developing “robust global green finance mechanisms and markets”.

The recommendations coming out of the meetings will be provided to the G20 Green Finance Study Group chaired by the People’s Bank of China and the Bank of England. The study group will finalize a synthesized report for the G20. The Securities Industry and Financial Markets Association (SIFMA), Bloomberg Philanthropies and United Nations Environment Programme also co-hosted the event.According to a communiqué from the event, the symposium developed recommendations for the creation of more efficient financing mechanisms to support the green transformation of the global economy. These included the need to mainstream environmental risk management in the investment decision-making process by banks and institutional investors, to develop the green bond market, to improve disclosure of environmental information by listed companies and bond issuers, and to provide mechanisms to “de-risk” the adoption of green technologies.

“The financial system should play an important role in the green transformation”

“The world is facing serious environmental challenges. We need to make stronger commitments to addressing them. We have tried many ways, including environmental regulations, pricing reforms, and fiscal policies. These have all worked in some way in controlling pollution and slowing the pace of global warming, but they are not enough. The financial system should also play an important role in promoting the green transformation of our economies,” said People’s Bank of China Governor Zhou Xiaochuan.

He added that establishing a green finance system has become a national strategy for China this year and that in the first quarter of this year, the country’s green bond issuance amounted to about 50% of the world’s total green bond issuance.

“There is an opportunity for the G20 to create practical green financing models for the developed and the developing world,” Paulson added. Link