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China is looking to introduce new guidelines to regulate ‘greenwashing’ in the climate fund sector, Reuters reported, citing sources familiar with the matter.
The proposed rules are expected to be introduced in the first half of next year.
The report added that defining the nature of green investments could bring about tangible changes in China’s fast-growing fund industry, which is dominated by asset managers.
Most or some of the green funds that make up the largest share of China’s 160 sustainable products could come under the new rules, which would force funds to remove the green label from their names.
Currently, China’s green funds are They are regulated by the wider investment rules implemented in 2018 and are not obliged to use an account.
Those funds managed $34 billion in assets as of the end of September this year, according to data from Morningstar, which collects data on environmental, social and governance (ESG) funds around the world.
China’s money regulator, the Asset Management Association of China (AMAC), has issued rules requiring mutual funds or exchange-traded funds to include 60% of their assets in certain green investment groups to qualify for sale as green products. said the sources.
The China Securities Regulatory Commission (CSRC) needs to approve AMAC regulations, the unnamed sources added.
A total of 43 climate-focused funds were launched in China in the first nine months of 2022, a 30% increase compared to the figure at the end of 2020.
Several global asset managers, including BlackRock and Fidelity International, which have offshore funds aligned with green standards, have entered China in the past two years.
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