Nature in sustainable finance2 Sustainable finance plays a pivotal role in driving biodiversity conservation and sustainable development, ultimately contributing to a more resilient and nature-positive future.9 This chapter covers major publicly traded sustainable finance products, namely bonds and funds, as well as green loans, which are a critical sustainable finance tool in China. Although the sustainable finance market continues to expand, the allocation for nature-related issues beyond climate change remains minimal, with less than 10% of bonds and funds directed at these. In contrast, over 50% of investments primarily target climate-related themes. Due to the lack of a unified taxonomy for sustainable finance, discrepancies in data collection lead to inconsistencies, making country-wide comparisons challenging. This issue is prevalent both in sustainable bonds and sustainable funds markets. To help readers understand the global landscape of sustainable finance, particularly China’s efforts in this field, this report uses internationally recognized data sources for analysis. The absence of a consistent taxonomy is particularly problematic for cross-border investments, as investors struggle to compare opportunities on a like-for-like basis, which is crucial for developing a truly global sustainable finance market.18 This issue has gained attention and efforts are on to address it. In November 2024, the International Platform on Sustainable Finance (IPSF) introduced the Multi-Jurisdiction Common Ground Taxonomy (M-CGT), a comparative framework for the sustainable finance taxonomies of China, the European Union (EU) and Singapore. This initiative aims to simplify the comparison of green taxonomies, facilitating cross-border green loans, green bond issuances and fund investments.19 10

Nature Related Sustainable Finance in China 2025