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China Firms Shy Away From ESG Loans Holding Them to Account

  • Policy support for sustainability-linked debt remains weak
  • China lags rest of Asia Pacific in sustainability-linked loans
How China Took an Oil Town and Turned It Into a Green Energy Hub
Photographer: Qilai Shen/Bloomberg
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Chinese firms are lagging their regional peers in a key funding method to meet sustainability goals, even as the world’s second-biggest economy pushes to become carbon neutral by 2060.

So-called sustainability-linked loans usually offer creditors extra margins if borrowers fail to meet their environmental goals, giving firms an incentive to make an extra effort. While the volume of such debt has climbed at a record pace in the rest of Asia Pacific, few deals are being done in China.