By Paul Davies and Andrew Westgate

China has launched a green bond pilot initiative via the Shanghai Stock Exchange, encouraging further foreign investment in a rapidly growing asset class and paving the way for issuances by non-financial institutions.

This initiative closely follows the publication of green bond guidelines in December 2015 by the National Association of Financial Market Institutional Investors (NAFMII). The Shanghai green bond stock exchange initiative and the guidelines go hand-in-hand with China’s efforts to transition towards a green and low carbon economy.