SPD Bank Launches First Structured Products in China Tied to New Carbon Neutrality Bond Index


Municipal lender the Shanghai Pudong Development Bank (SPD Bank) has just launched the first structured products in China that are tied to a new carbon neutrality index developed in the wake of efforts to expand domestic green financing.

On 24 May SPD Bank released new structured products linked to the “ChinaBond – Carbon Neutrality Green Bond Index” (中债-碳中和”绿色债券指数) that was developed and released by the ChinaBond Pricing Centre (中债估值中心) in March of this year.

The new index is comprised of carbon neutrality bonds that are publicly issued and traded within China, and that raise funds for carbon reduction and green financing products.

The ChinaBond Pricing Centre updates the index on a daily basis, and says that the goal is to “promptly reflect pricing trends on the carbon neutrality green bond market.”

As of the end of April 2021 the Carbon Neutrality Green Bond Index encompassed 46 bonds from 31 issuers, covering approximately 87.617 billion yuan in carbon neutrality bonds.

The Chinese finance sector is currently driving rapid growth in its green finance offerings, after President Xi Jinping set the ambitious targets of achieving peak carbon by 2030, and carbon neutrality by 2060.