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China Construction Bank issues the world’s first demonstration Green Bond based on the China-EU Common Ground Taxonomy


On December 13 2021, China Construction Bank (CCB) issued its second overseas Green Bond of the year, raising $500 million for a three-year term. It is the bank’s first US dollar floating-rate bond priced at the new benchmark interest rate, and the world’s first Green Bond based on the China-EU Common Ground Taxonomy: Climate Change Mitigation (hereinafter referred to as the CGT). Funds raised will be channeled to quality projects of clean transportation and clean energy in the Greater Bay Area for green development.

The CGT was released by the International Platform on Sustainable Finance (IPSF) in November 2021 and plays an important role in promoting China-EU green cooperation. It aims to facilitate smoother cross-border green capital flows and lower the transaction costs by avoiding unnecessary duplication of verification. It helps to foster a better taxonomy of global sustainable finance by improving its comparability, compatibility, and consistency. CCB has been persisting its “dual carbon” development concept and leveraging its leading advantages in green finance. Its innovative issuance of the demonstration green bond based on the CGT is an important practice, providing reference for global market participants. Due to the high credit rating of CCB in the international capital market and innovative ESG elements, the issuance attracted international investors such as Autoridade Monetária de Macau (AMCM), Korea Investment Corporation (KIC), Taishin International Bank (TSIB), and Allianz Global Investors, with an over-subscription amount nearly twice the amount offered.

The issuance complies with the relevant standards in Green Bond Principles (GBP) by International Capital Market Association’s(ICMA), the CGT, and the Guidance on Taxonomy of Climate Investment and Financing Projects, and has obtained the third-party certifications from CECEP Hundred Technical Service (Beijing) Co., Ltd. and Hong Kong Quality Assurance Agency (HKQAA) respectively.

The bond will be issued by the Macau Branch of CCB and listed for trading on Hong Kong and Macau stock exchanges after delivery.

About The Common Ground Taxonomy

On November 4th, 2021, The IPSF, jointly founded by China, European Union, and other economies, held its annual meeting during the UN Climate Change Conference in Glasgow(COP26) and released the report Common Ground Taxonomy: Climate Change Mitigation (CGT). The CGT report is a milestone work resulting from in-depth comparison of China’s Green Bond Endorsed Projects Catalogue and its counterpart the EU Taxonomy Climate Delegated Acts. The IPSF experts undertook a comprehensive assessment of their respective methodologies and outcomes, with detailed analysis on legal documents, objectives, principles, frameworks, logic, standards and taxonomy, indicator setting, and presentation forms. The current version of the CGT covers 61 major economic activities across six sectors, including energy, manufacturing, construction, transportation, solid waste, and forestry. All the climate mitigation activities in the report are recognized by both China and the EU taxonomies.

Source: The official Wechat accounts of the GFC, China Society for Finance and Banking