Lack of energy efficiency data holding back green building finance products in China, Sustainable Fitch says

A lot of green buildings have been certified on design, but not on operations, Sustainable Fitch analyst says

Mortgage-backed securities for green buildings have been limited to commercial structures so far

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A view of Shenzhen in southern China. Various levels of government have established green building standards, set targets and offered subsidies to support green buildings, but implementation continues to be of concern. Photo: Martin Chan

Published: 7:30am, 9 Nov 2022Updated: 3:11pm, 9 Nov 2022

Lack of quality data on energy-efficiency performance is holding back the proliferation of green building financing products in mainland China, analysts said.

This is despite various levels of government establishing green building standards, setting targets and offering subsidies to support the sector.

A five-year plan unveiled by the Ministry of Housing and Urban-Rural Development in March, for example, aims for the full implementation of green building standards in all new residential and public buildings by 2025.

It also set national targets for the renovation of existing buildings to improve their energy efficiency, and the installation of solar and geothermal energy facilities. The policies form part of the government’s plans for peaking carbon emissions by 2030.

The weak spot lies in implementation. “The definition has not been very clear when it comes to green buildings,” Jia Jingwei, associate director of ESG research at Sustainable Fitch, said on the sidelines of the rating firm’s ESG conference last week. “A lot of them have certificates but they were certified on design – but not on operations.”