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Highlights   The development of sustainable lending Since the "dual carbon" goal was proposed, my country's green finance has flourished, and sustainable loans, led by green loans and sustainable development-linked loans, have gradually become one of the important green financial tools, providing support for the realization of a resource-saving, environmentally friendly society and the realization of social sustainable development. In recent years, green loans and sustainable development-linked loans have both been in a stage of rapid growth, and their scale is expected to continue to expand in the future, giving full play to the role of financial institutions in optimizing resource allocation and promoting green transformation and development.   Rules and requirements for international green loans and sustainability-linked loans In March 2018, the Loan Market Association and the Asia Pacific Trade Market Association jointly issued the Green Loan Principles, which provided a list of qualified green projects for green loans and set four core elements: use of funds, project evaluation and screening, fund management, and information disclosure. In March 2019, the Asia Pacific Loan Market Association, the Loan Market Association and the Syndicated Loan and Trading Association jointly launched the Sustainable Development Linked Loan Principles, which provide guidance and frameworks for the sustainable development loan practices of lenders, borrowers and third parties, and set five core elements: selection of key performance indicators (KPIs), verification of sustainable development performance targets (SPTs), loan characteristics, and information disclosure and verification.   Differences in rules between domestic green loans and sustainability-linked loans Different from the Green Loan Principles and Sustainable Development Linked Loan Principles that are generally followed internationally, there is currently no unified green loan and sustainable development linked loan rules and standards in China. Different regulatory agencies have only formulated corresponding green loan statistical scopes - the Green Loan Special Statistical System and the Green Financing Statistical System; sustainable development linked loans use the Sustainable Development Linked Loan Principles as an important normative document, focusing on international market practices. Case analysis of domestic green loans and sustainable development-linked loans Brilliance East Asia Automotive Finance Co., Ltd. green syndicated loan;   Rizhao Bank has promoted the implementation of multiple "blue + sustainable development linked" dual-label loans;   COSCO SHIPPING Energy Transportation Co., Ltd.’s RMB1.5 billion ESG-linked medium-term working capital syndicated loan;   Jining Zhengchuang Mineral Resources Development Co., Ltd.'s sustainable development linked bank loan.   Green Loan and Sustainability Linked Loan Development Proposal In recent years, green loans and loans linked to sustainable development have developed rapidly. However, compared with the international market, domestic practices are still relatively rare, and domestic market guidance rules and supporting mechanisms still need to be improved. At the same time, regulatory support for sustainable loans should be increased, the enthusiasm of the local market should be mobilized, policy support and incentives should be strengthened, and more funds should be guided into green and low-carbon fields. In addition, third-party institutions should give full play to their own roles, strengthen the training and review of their own professional qualifications, strengthen risk management and loan information transparency, improve information disclosure mechanisms, and prevent false labeling caused by inaccurate measurement and disclosure or exaggeration of facts.   1. Development of sustainable loans Sustainable finance has emerged along with sustainable development. Effective allocation of funds in modern economic activities has focused social resources on cleaner, greener, healthier, safer and more resilient areas, and has played an important role in promoting the consistency of economic benefits and social values, and the coordination of financial value and non-financial value. Since the concept of sustainable finance was proposed, financial market products with sustainable development as the theme have increased rapidly. Among them, loans, as an important financial tool, have gradually played an important role in the sustainable field. Green loans, sustainable development-linked loans, social responsibility loans, carbon emission reduction loans, transition loans, etc. have relied on their respective product features to provide financial support for sustainable projects or enterprises.   In sustainable finance, my country pays the most attention to environmental topics. Since the "dual carbon" goal was proposed, green finance has flourished, and sustainable loans, led by green loans and sustainable development-linked loans, have gradually become one of the important green financial tools, providing support for the realization of a resource-saving, environmentally friendly society and the realization of social sustainable development. In recent years, green loans and sustainable development-linked loans have been in a stage of rapid growth, and their scale is expected to continue to expand in the future, giving full play to the role of financial institutions in optimizing resource allocation and promoting green transformation and development.   1. Development of Green Loans Green Loans (GL) refer to the form of loans that consider environmental sustainability factors in the loan business of financial institutions and invest funds in green industries such as low-carbon, environmental protection and renewable energy. Internationally, the concept of green loans originated from the world's first policy environmental protection bank established in the Federal Republic of Germany in 1947. Later, with the implementation of internationally influential industry standards such as the Equator Principles, the vague environmental standards in the financing process were clarified and concretized, and green loans gradually became an important economic means to promote corporate energy conservation and emission reduction, adjust industrial structure, and respond to climate change. In March 2018, the Loan Market Association and the Asia-Pacific Trade Market Association jointly issued the Green Loan Principles (hereinafter referred to as "GLP"), which provides a high-standard guiding framework for the development of financial institutions' green loan business. It mainly refers to the Green Bond Principles and formulates a standard framework from four aspects, including fund use, project evaluation and screening, fund management and information disclosure. It lists in detail the types of green projects that meet the standards and makes clear requirements for the management and institutional constraints of loan funds. It can effectively guide financial institutions to issue green loans and make funds flow to green industries. In order to promote the development of green loan products and strengthen process integrity, GLP was revised and updated in February 2021 and February 2023, respectively, to continuously clarify the financial products and classifications that meet the requirements and reflect the results of changing market practices.   In China, the first green loan policy was jointly proposed by the State Environmental Protection Administration, the People's Bank of China and the former China Banking Regulatory Commission on July 30, 2007 in the Opinions on Implementing Environmental Protection Policies and Regulations to Prevent Credit Risks, which required all financial institutions to strengthen the coordination and cooperation between credit management and environmental protection, and to strengthen environmental supervision and management. Subsequently, the former China Banking Regulatory Commission successively formulated the "Green Credit Guidelines" (Yinjianbanfa [2012] No. 4) and the "Green Credit Statistics System" (Yinjianbanfa [2013] No. 185), which determined the framework of China's green credit policy system and required banks to conduct statistics on loans to enterprises with major environmental and safety risks and loans for energy-saving and environmental protection projects and services; in March 2018, the People's Bank of China issued the "Special Statistical System for Green Loans" (Yinfa [2018] No. 10), and revised it in 2019 with reference to the "Green Industry Guidance Catalogue (2019 Edition)" jointly issued by the National Development and Reform Commission and others, and basically adopted the main framework and standards of the "Green Industry Guidance Catalogue (2019 Edition)"; in July 2020, the former China Banking and Insurance Regulatory Commission issued the "Special Statistical System for Green Financing" on the basis of the "Green Credit Statistics System", referring to the overall framework of the "Green Industry Guidance Catalogue (2019 Edition)" and adjusting some sub-projects, expanding the statistical scope to on- and off-balance sheet financing. my country's green credit standards are gradually improving, and in terms of the regulatory system, a policy framework has been formed with standardized top-level design, statistical classification system, assessment and evaluation system and incentive mechanism.   According to statistics from the People's Bank of China, by the end of 2023, the balance of green loans in RMB and foreign currencies in China was 30.08 trillion yuan , a year-on-year increase of 36.5%, 26.4 percentage points higher than the growth rate of all loans, and an increase of 8.48 trillion yuan from the beginning of the year, ranking first in the world. In addition, under the background of the "dual carbon" goal and the policy support of the central bank, China has launched loans specifically for carbon emission reduction projects , which means that funds are specifically used in the field of carbon emission reduction and produce certain carbon emission reduction benefits (see the "Development Status and Suggestions of Carbon Emission Reduction Support Tools" in the 2023 Annual Report of CCXGF for details). By the end of 2023, loans invested in projects with direct and indirect carbon emission reduction benefits were 10.43 trillion yuan and 9.81 trillion yuan , respectively, accounting for 67.3% of green loans in total. Green loans are the earliest, fastest-growing, and most mature products in the development of China's green finance. They are showing a stable growth trend, effectively helping financial institutions to cope with environmental and social risks, enhance international competitiveness, and implement the "dual carbon" strategy. They are a powerful tool for achieving a resource-saving, environmentally friendly society and achieving social sustainable development.   2. Development of Sustainability-Linked Loans Sustainability Linked Loans (SLL) are an innovative green finance concept launched, issued and guided by international market self-regulatory organizations. They aim to promote and support the growth of more business activities that contribute to environmental and social sustainability by linking loan costs to borrowers' sustainable development performance goals in terms of environment, society, corporate governance, etc., with the help of incentive mechanisms, and inject new momentum into the long-term healthy development of the economy and society. Since ING provided Philips with its first EUR 1 billion sustainable development-linked loan in April 2017, the attention paid to this financial instrument has continued to rise. In March 2019, the Asia Pacific Loan Market Association, the Loan Market Association and the Syndicated Loan and Trading Association jointly launched the Sustainability Linked Loan Principles (hereinafter referred to as "SLLP"), which provide guidance and framework for the sustainable development loan practices of lenders, borrowers and third parties, and are important normative documents in the development of sustainable development loans. The above three institutions updated the SLLP in May 2021 and February 2023 respectively in combination with the latest practices, which promoted the rapid development of sustainable development-linked loans.   Sustainability-linked loans are different from general green loans. Similar to sustainability-linked bonds, they have the advantages of not limiting the use of funds and being able to obtain loan condition rewards or penalties based on sustainable development performance. They are applicable to any borrower who is willing to improve the level of sustainable development. Therefore, they are more widely applicable and have developed rapidly since their launch. According to statistics from the Environmental Finance Network , from the issuance of the first sustainable development-linked loan in 2017 to August 2023, a total of 1,820 sustainable development-linked loans were issued worldwide, with a scale of US$1.4 trillion. From the perspective of each year, sustainable development-linked loans started with US$4.7 billion in 2017, and developed rapidly in 2018 and 2019, with a year-on-year increase of 10 times and 3 times respectively, and exceeded the scale of green loans for the first time in 2019. From 2021 to 2022, the annual issuance of sustainable development-linked loans continued to expand, and in 2022, it exceeded US$660 billion at a 2-fold growth rate. The scale and activity showed a year-on-year growth trend in the broad green financial debt market. In 2023, the scale of sustainable development-linked loans issued globally decreased slightly compared to 2022, but it is still popular among borrowers and lenders as an important form of sustainable financing in the loan market.   my country's sustainable development-linked loans started slightly later than the rest of the world, but since the "dual carbon" goal was proposed, my country's green finance has flourished, and sustainable development-linked loans have gradually become an important green financial tool, playing a positive role in supporting the transformation of non-green industries, including high-carbon industries, in economic activities. It has given full play to the role of financial institutions in optimizing resource allocation, encouraging borrowers to invest more in business activities related to sustainable development, and guiding funds to flow into the field of green and sustainable development.   II. Rules and requirements for international green loans and sustainable development-linked loans   1. Requirements of international green loan rules GLP defines green loans as various types of loan instruments that are used to provide partial/full financing or refinancing for new and/or existing qualified green projects. Its four core elements include: fund use, project evaluation and screening, fund management, and information disclosure.   The funds of green loans must be used for green projects that meet the requirements. The GLP clearly recognizes several general project categories that meet the qualifications of green projects (as shown in Table 1). These categories help achieve environmental goals such as mitigating or adapting to climate change, protecting natural resources, protecting biodiversity, and preventing and controlling pollution. In accordance with GLP requirements, all green projects using funds and their clear environmental benefits need to be properly described in the financing documents. Where feasible, borrowers need to evaluate and quantify environmental benefits.   Eligible green project categories (in no particular order) may include, but are not limited to:   Green loan borrowers must clearly communicate the project evaluation and screening process to the lender, including the achievable environmental sustainability goals of green projects, the borrower's compliance process for assessing the green project category to which the project belongs , relevant green standards or exclusion criteria that are officially certified or consistent with market classifications, and the borrower's identification and management of environmental and social risks associated with relevant projects. Borrowers should maintain transparency in fund management. GLP stipulates that funds of green loans should be deposited into special accounts or tracked by borrowers in an appropriate manner. Borrowers are also required to demonstrate the purpose and management of funds in formal internal processes related to green project loans and investment operations to ensure that loan funds are used for green projects. In terms of information disclosure , borrowers need to disclose information related to the use of funds in the form of an annual report, which should include a list of "green projects" to which green loan funds are allocated, a brief description of the projects, the amount of loans allocated, and the expected and actually achieved (if applicable) environmental benefits until all green loans are withdrawn (revolving loans refer to loan maturity), and should be updated proactively and promptly when major changes occur.   (II) Requirements for international sustainable development-linked loans Sustainability-linked loans have no restrictions on loan types, financing entities, and loan purposes. Sustainability-linked loans can be any type of loan financing, such as term loans, revolving loans, or other types of credit. In terms of the borrowing entity, any borrower that meets the basic loan requirements of financial institutions can obtain sustainable development-linked loan financing. In terms of the use of funds, there is no restriction on green projects, and they can be used for general corporate purposes, such as daily production and operation turnover, debt repayment, etc. According to SLLP, sustainable development-linked loans include five core elements: selection of key performance indicators (KPIs), verification of sustainable development performance targets (SPTs), loan characteristics, information disclosure, and verification.   The selection of key performance indicators (KPIs) should be based on the principle of being closely related to the objectives related to the environment, society and governance (ESG) involved in the borrower's business activities, and set indicators based on the borrower's long-term performance. In addition, the indicator setting should be quantitatively calculated and quantified for subsequent verification. Common key performance indicators (KPIs) include, but are not limited to, the following examples:   Sustainable development performance targets (SPTs) are quantitative assessment targets for key performance indicators (KPIs), which are determined through consultation between borrowers and financial institutions. They should be set according to high standards and requirements to motivate borrowers to improve their sustainable development performance during the loan period. At the same time, the time limit for achieving the goals should be clearly defined, and the indicators can be quantified and assessed according to time nodes. In terms of loan characteristics , the financial results of sustainability-linked loans are related to whether the borrower completes the SPT(s). Incentive or punitive measures may be adopted. For example, if the borrower achieves the pre-set SPT, the initial loan interest rate under the relevant loan agreement will be reduced; otherwise, it will remain unchanged or increase. In terms of information disclosure , SLLP requires borrowers to disclose SPTs-related information to participating lending institutions once a year, and encourages borrowers to disclose information through annual reports or corporate social responsibility reports. The disclosure content must include the completion of SPTs in that year, the relevance of SPTs to the main business, and the impact on loan characteristics. In terms of verification , during the term of the loan, SLLP requires the borrower to hire an external organization with relevant professional knowledge to conduct an assessment and certification of the sustainable development performance targets of the key performance indicators and issue a verification report. The verification time is determined by negotiation between the borrower and the lender until the last SPT trigger event of the loan is reached.   3. Comparison of international green and sustainable development-linked loan rules and requirements Compared with green loans, sustainable development loans can be applied to a wider range of industries and projects, have fewer restrictions on funds, are more inclusive, and have stronger incentives for borrowers. The comparison between green loans and sustainable development-linked loans is shown in the following table:     III. Main differences between domestic green loans and sustainable development-linked loans and international principles 1. Analysis of differences in green loans Unlike the Green Loan Principles that are generally followed internationally, there is currently no unified green loan rules and standards in China. Different regulatory agencies only set corresponding green project scopes for the green loans they support, including the Green Industry Guidance Catalogue (2019 Edition) issued by the National Development and Reform Commission and others (updated to the Green and Low-Carbon Transformation Industry Guidance Catalogue in 2024), the People's Bank of China's Green Loan Special Statistics System, and the former China Banking and Insurance Regulatory Commission's Green Financing Statistics System, but there are no specific requirements for fund management and information disclosure.   2. Green categories of domestic green loans In order to implement the "Green Industry Guidance Catalogue (2019 Edition)" issued by the National Development and Reform Commission and other relevant departments in 2019, the People's Bank of China issued the "Notice of the People's Bank of China on Revising the Special Statistical System for Green Loans" in 2019, adjusting the scope of green loans to be consistent with the "Green Industry Guidance Catalogue (2019 Edition)", mainly including six first-level classifications: energy-saving and environmental protection industry, clean production industry, clean energy industry, ecological environment industry, green infrastructure upgrade, and green services, which are subdivided into 30 second-level classifications and 211 third-level classifications.   In 2020, the former China Banking and Insurance Regulatory Commission formulated the "Green Financing Statistical System" based on the "Green Credit Statistical System", expanding the statistical scope of green loans to include green financing related to trade and consumption, and expanding the scope to green loans related to production, construction, operation, trade and consumption. In addition to the above six major areas, the index sector has added green trade financing and green consumption financing, involving the trade of green field products such as advanced environmental protection equipment, new energy and clean energy equipment, green transportation equipment, and the purchase of green buildings and new energy vehicles.   With the development of various green industries and corresponding policy support, green loans have derived many subdivided products in recent years. In order to promote my country's strategy of building a strong maritime nation, blue loans have taken off in recent years, and many banks have begun to get involved in the field of blue finance to support the development of my country's maritime economy. Blue loans are a sub-category of green loans, which refer to projects in which funds are used to support marine protection and sustainable utilization of marine resources. Its certification scope is in addition to the "Green Industry Guidance Catalog (2019 Edition)", "Green Loan Special Statistical System" and " In addition to the "Green Financing Statistical System", the "China Blue Industry Guidance Catalog (Draft for Comments)" drafted by the World Wildlife Fund (WWF) in August 2021 provides a clearer classification reference for blue projects and helps blue Loan identification. In addition, in order to support the national "dual carbon" policy deployment, the People's Bank of China issued the "Notice on Matters Concerning the Establishment of Carbon Emission Reduction Support Tools" in 2021, officially launching the carbon emission reduction support tool to support financial institutions in carbon emission reduction. Projects with significant carbon emission reduction effects in key areas are provided with preferential interest rate loans. The key areas supported include clean energy, energy conservation and environmental protection, and carbon emission reduction technology, with a total of 23 subdivisions, all of which are popular "carbon neutral" "Industrial field.   2. Statistical scope of domestic green loans International green loans have no specific requirements for loan types. The GLP clearly states that green loans can be various types of loan instruments and/or alternative financing methods (such as guarantee lines, guarantee lines or letters of credit), while the scope of domestic green loan statistics varies among different regulatory agencies.   The green loans of the People's Bank of China only count project financing, working capital financing, personal business loans and bill discounts (commercial bills, bank bills). The statistical scope of green credit in the CBIRC is consistent with the "Various Loans" in the CBIRC's "Off-site Supervision Report 1104", that is, the assets formed by the borrower's lending of monetary funds, mainly including loans (including personal loans), trade financing (industry chain and supply chain financing), bill financing, financial leasing, purchase and resale of assets from non-financial institutions, overdrafts, various advances, bank acceptance bills, letters of credit, etc., as well as green bonds of non-financial enterprises invested with their own funds.   (II) Analysis of differences in sustainable development-linked loans With the national goal of "carbon peak and carbon neutrality" in 2020, major domestic banks have actively responded and explored the launch of sustainable development-linked loan products. However, as of now, China has no guiding rules and supporting mechanisms for sustainable development-linked loans. Its evaluation and recognition still use the "Sustainable Development Linked Loan Principles" jointly issued by the Asia Pacific Loan Market Association, the Loan Market Association and the Syndicated Loan and Trading Association as an important normative document, focusing on international market practices.   However, there are certain differences between the KPI selection preferences of China's sustainable development-linked loans and international operations. As an important tool for China's transitional finance, sustainable development-linked loans are aimed at a large number of carbon-intensive and high-environmentally-impacted "brown" industries and enterprises, which will help promote the green and sustainable transformation of the industrial structure. Influenced by industry preferences under the background of "dual carbon", borrowers of China's sustainable development-linked loans usually choose environmental (E) dimension indicators related to clean energy, energy conservation, and pollution emissions. Compared with the KPI areas selected by international sustainable development-linked loans, Chinese companies rarely directly use greenhouse gas emission reduction as sustainable performance in the environmental dimension. In the social (S) dimension, borrowers of China's sustainable development-linked loans fully combine policy dynamics and regional planning. The linked indicators related to "rural revitalization", "common prosperity", and "talent-driven country" highlight China's unique sustainable development path, while key performance indicators related to the social dimension at the international level, such as product quality, gender equality and health, and supply chain management, need to be further explored and expanded in China.   In addition, the penalties for the linkage clauses of domestic sustainable development loans are relatively mild. For example, some sustainable development-linked loans adopt a one-way interest rate linkage mechanism, that is, if the performance target is achieved, the interest rate will be reduced, and if the performance target is not achieved, there will be no interest rate increase penalty. This one-way reward mechanism has almost no substantial impact on the financing cost of the borrower if the borrower fails to achieve the sustainable development performance target, which to a certain extent loses the significance of promoting transformation.   IV. Case analysis of domestic green loans and sustainable development-linked loans   Brilliance East Asia Automotive Finance Co., Ltd. Green Syndicated Loan - Green Loan that Meets Multiple Green StandardsBrilliance East Asia Auto Finance Co., Ltd. (hereinafter referred to as "Brilliance East Asia Auto Finance") is an auto finance company approved by the China Banking Regulatory Commission. Its main business is auto finance business, providing financial services for new energy vehicle brands such as Tesla, Ideal, and Xiaopeng. Brilliance East Asia Auto Finance has been cooperating with major banks to increase the investment in new energy pure electric vehicle projects by applying for green and carbon neutral syndicated loans. In February 2023, the first batch of green and carbon neutral syndicated loans organized by SinoPac Bank, Kasikorn Bank and Bank of East Asia were issued by Brilliance East Asia Auto Finance Co., Ltd., totaling 235 million yuan, and all funds were used to carry out new energy vehicle retail loan business. The loan is green labeled in combination with domestic and international project standards, and the use of funds is in line with the "Guiding Opinions on Promoting Investment and Financing to Address Climate Change", "Special Statistical System for Green Loans", "Statistical System for Green Financing", "Green Industry Guidance Catalogue (2019 Edition)" and "Green Bond Support Project Catalogue (2021 Edition)" issued by five ministries and commissions including GLP, the Ministry of Ecology and Environment, etc., to promote the development of the new energy vehicle industry and expand market influence. Rizhao Bank promotes the implementation of multiple "blue + sustainable development linked" dual-label loans to promote the sustainable development of the blue economyIn 2023, Rizhao Bank Co., Ltd. (hereinafter referred to as "Rizhao Bank") will give full play to the advantages of coastal areas, constantly explore the needs of the marine economy for financial support and services, continue to develop innovative products, and implement a number of "blue + sustainable development linked" double-label loans to enable the green and high-quality development of the local marine economy. On September 26, Rizhao Bank issued a loan of 10 million yuan to Qingdao Yunlu Tebian Intelligent Technology Co., Ltd., which is the first "blue + sustainable development linked" double-label loan in the country. The funds are specifically used for the production of key components such as converters and transformers required for an offshore wind power project in Shandong Province , making full use of offshore wind resources for power generation, which will help to sustainably develop blue ocean resources, accelerate energy transformation in coastal areas, and promote sustainable use of resources; and link the loan interest rate to the company's "10,000 yuan of electricity consumption" to guide the company to reduce electricity consumption and carbon emissions in the operation process through green transformation. COSCO SHIPPING Energy Transportation Co., Ltd. RMB 1.5 billion ESG-linked medium-term working capital syndicated loan - the first ESG-linked syndicated loan in the shipping industryIn September 2023, COSCO SHIPPING Energy Transportation Co., Ltd. (hereinafter referred to as "COSCO SHIPPING Energy"), a subsidiary of China Ocean Shipping Group Co., Ltd., reached an ESG-linked syndicated loan agreement with Bank of China Shanghai Branch and COSCO SHIPPING Group Finance Co., Ltd., marking the first syndicated loan in China's shipping industry linked to ESG indicators, with a term of three years and a total amount of RMB 1.5 billion. Based on its own sustainable development strategic plan, COSCO SHIPPING Energy selected three key performance indicators (KPIs) from the two dimensions of environment (E) and society (S), including the unit turnover emissions of carbon dioxide, nitrogen oxides, and hazardous waste under the environmental dimension; the percentage of employees trained, the rate of work-related deaths, and the number of responsible major and serious production safety accidents under the social dimension. There are many types of safety risks faced in the process of carrying out ship energy transportation business. Therefore, safety management is an important issue in the maritime transportation industry and a factor that cannot be ignored in the development of the shipping industry. Therefore, the two social (S) dimension indicators related to production safety have also become the main innovation points of this loan. As an outstanding enterprise in ESG management in the domestic shipping industry, COSCO SHIPPING Energy will further promote the cooperation between it and financial enterprises through ESG-linked syndicated loan financing, innovate ESG value realization, improve and enhance the company's ESG governance work in a targeted manner, reduce financing costs and thus enhance the company's value. Jining Zhengchuang Mineral Resources Development Co., Ltd. Sustainable Development Linked Bank Loan - Shandong Province's first sustainable development linked loanJining Zhengchuang Mineral Resources Co., Ltd. is a company engaged in mining and environmental protection processing projects. It focuses on the industrial chain of mining and restoration to improve the green requirements of mining areas, and focuses on promoting the business model of "development-oriented governance and environmentally friendly processing" to reduce the negative environmental impact of mining. In January 2023, Hengfeng Bank successfully issued a 500 million yuan medium- and long-term sustainable development-linked loan to Jining Zhengchuang Mineral Resources Co. , Ltd., linking the loan interest rate to the company's preset key performance indicator (KPI) - the area of mine ecological restoration, and preset the sustainable development performance target (SPT) as "the cumulative mine ecological restoration area of not less than 254 mu from 2020 to 2025", vigorously improving the ecological environment of the mining area and regional rural infrastructure.The project fields supported by green loans in China are basically based on the categories of green projects of various domestic regulatory agencies. Some foreign banks usually refer to international standards such as GLP when identifying green projects, paying attention to the commonalities and differences between the scope of domestic and foreign green projects. compatibility to enhance the international influence of green investment behavior. The borrowers of domestic sustainable development-linked loans have significant industry diversification characteristics, most of which are non-green industries, and are not limited to enterprise size. Any borrower who is willing to improve the level of sustainable development is encouraged to obtain sustainable development-linked loan financing. At the same time, key performance indicators (KPIs) are continuously enriched and expanded with practical development, which is conducive to promoting the multi-dimensional sustainable development of enterprises and improving their comprehensive ESG performance. Suggestions on the development of loans linked to green loans and sustainable developmentThe domestic market guidance rules and supporting mechanisms still need to be improved. In recent years, green loans and sustainable development-linked loans have developed rapidly, but compared with the international market, there are no unified rules and standards in China. For green loans, there are certain differences between the People's Bank of China and the former China Banking and Insurance Regulatory Commission in the statistical caliber of green loans. The inconsistency of green loan standards has brought certain difficulties and challenges to commercial banks in evaluating related projects and effectively issuing green loans. Supervisory and management departments should further unify and clarify green loan standards, make good compatibility between green loan standards and internationally accepted standards, strengthen green loan fund management and information disclosure requirements, and achieve coordinated application of international and domestic standards, local and industry standards. For sustainable development-linked loans, domestic regulatory agencies urgently need to refer to relevant international guidance documents, formulate and improve the norms or guidelines for sustainable development-linked loans after the formulation of relevant guidance documents on sustainable development-linked bonds, and study and publish China's practical guidelines for sustainable development-linked loans in combination with China's "dual carbon" goals and the development of sustainable development-linked loans. Regarding the lack of referenceable quantitative sustainability indicators and baselines in the social dimension, relevant departments need to work hard to carry out methodological research on the establishment of sustainable development performance goals, and continuously explore methods for establishing sustainable development goals that are suitable for China's local market conditions and relevant standards, so as to unify ESG measurement standards, accelerate the implementation and application of sustainable development loans in my country, and promote market standardization and professionalization.Increase regulatory support and give full play to the enthusiasm of the local market. China's green loans still have a large room for development. We should further give play to the positive role of green loans in guiding relevant entities to promote green transformation and promote carbon emission reduction , appropriately expand the scope of support for green loans, strengthen policy support and incentives, provide low-cost financial support for more projects with carbon emission reduction effects, and guide more funds to flow into the green and low-carbon fields; at the same time, financial institutions should optimize the green loan approval process, guide more funds to small and medium-sized enterprises that promote low-carbon transformation and green development, and increase the willingness of small and medium-sized enterprises to actively carry out green transformation. In addition, all financial institutions should strengthen the study of the 2024 version of the "Green and Low-Carbon Transformation Industry Guidance Catalog", deeply explore the financing needs of various green and low-carbon transformation fields, and promote the realization of the "dual carbon" goals. For sustainable development-linked loans, expanding the industries involved by borrowers will help achieve comprehensive sustainable development. For enterprises of different industries and sizes, KPIs can be specially designed for them in combination with policy requirements, industry standards, and enterprise characteristics. Continue to explore social performance indicators that are suitable for the comprehensive promotion of rural revitalization and have inclusive significance , strengthen the design guidance of corporate governance performance indicators related to enterprise management and business, and encourage companies to improve the level of ESG comprehensive governance and achieve sustainable development from themselves.Third-party institutions should give full play to their own role and strengthen risk management and loan information transparency. Third-party assessment institutions should strengthen the cultivation and review of their own professional qualifications, conduct in-depth analysis of green loan projects and professional assessment of the environmental and social risks involved, strengthen the quantitative calculation of project environmental benefits, and ensure the fairness and accuracy of green loan assessment results. Due to the imperfect information disclosure and communication mechanism of green loans in China, the problem of information asymmetry is particularly prominent. External institutions have played an important role in this, and professional assessment reports have provided effective support for the issuance of green loans by banks. Sustainable development-linked loans are widely used in various industries, and the industries involved are highly professional and technical. However, banks and borrowers have limited professionalism in the sustainable development-linked goals related to the technology, process and products of various industries. Therefore, third-party professional institutions are required to conduct professional assessments and conduct assessment disclosures. Therefore, more attention should be paid to the indicator setting and external review role of third-party institutions to prevent borrowers from setting inappropriate SPTs or inaccurate or exaggerated SPT monitoring, measurement and disclosure, which leads to false labeling. In this context, borrowers will continue to be encouraged to continuously improve their information disclosure mechanisms in the future, and third-party institutions should do a good job in their own certification and review processes, jointly control loan quality, strengthen information disclosure, and enhance the transparency and credibility of sustainable development-linked loans. This is an irresistible trend.