China’s commitments to peak carbon emissions by 2030 and achieve carbon neutrality by 2060 come with an enormous financing need. Estimates suggest the country must invest at least RMB 2-4 trillion (approximately US$275-$550 billion) per year in green and low-carbon projects to meet these goals. Public funding alone can cover only about 10%-15% of this required investment, leaving a large financing gap that private sector capital must fill. This makes the development of carbon-linked financial products and investment mechanisms a priority. China’s sustainable finance market is already large and growing, with trillions in outstanding green loans and green bonds. Yet many companies — especially small- and medium-sized enterprises (SMEs)— still face difficulties in accessing green finance. SMEs often lack the necessary data for emissions disclosure, making it difficult for them to demonstrate reductions and qualify for green financial products. A survey conducted in 2023 found that around 60% of small and micro enterprises did not know how to measure their greenhouse gas emissions, reflecting significant gaps in technical capacity that hinder their access to green finance. Financial institutions, for their part, struggle to incorporate climate factors into decision-making due to inconsistent and incomplete corporate climate-related data. Without clear climate-related data, they cannot accurately assess companies’ carbon performance or develop appropriate green financial products. The issue is further compounded in hard-to-abate industries like steel, cement and petrochemicals, as it’s difficult for financial institutions to define transition activities and recognize meaningful decarbonization efforts. To bridge this gap, China has developed an innovative Corporate Carbon Accounting and Rating Platform, which leverages digital technologies to automatically capture and evaluate carbon performance of corporates in a way that financial institutions can easily understand. The platform has been piloted in at least six regions across China since 2021. Here we offer an overview of the platform, breaking down how it can help scale China’s sustainable finance and enhance financial inclusion — particularly for SMEs and hard-to-abate industries — as well as potential opportunities to support its expansion.
A Look at China’s Corporate Carbon Accounting Platform | World Resources Institute
