Research On The Motivation And Effect Of Green Asset Securitization Of Enterprises Under The Background Of Carbon Peaking And Carbon Neutrality Goals

Finance is the core motivation of economic progress in modern society,and green finance is of great value to China’s green development.In his report to the 19 th National Congress of the Communist Party of China,General Secretary Xi Jinping proclaims that green finance is closely concerned with sustainable development.In recent years,in virtue of the prosperity of green finance and the increasingly urgent capital needs of green enterprises,green asset securitization emerges accordingly.Green enterprises use structural design and other means to restructure the high quality assets which lack liquidity,and issue green asset-backed securities to circulate in the financial market,which positively contributes to resuscitating the stock assets of green enterprises and accelerating their operating efficiency.However,as green asset securitization is an emerging method for financing in China,there are some issues that need to be constantly improved in line with the current policies.China will spare no effort to peak carbon dioxide emissions before 2030 and actualize carbon neutrality by 2060,according to the Central Economic Work Conference in December 2020.Under the background of carbon peaking and carbon neutrality goals,the case selected in this thesis is China Three Gorges Renewables(Group)Co.,Ltd.(CTGR),the leading enterprise of new energy operators in China,which issued green asset-backed notes in 2021,also known as carbon-neutral bonds.This is the first batch of green enterprises in China to publicly issue carbon neutral ABN products.The public issuance of carbon neutral bonds from CTGR marks a new commencement of China’s carbon neutral green asset securitization products,which is representative to a certain extent.Therefore,it can provide the reference for relevant green enterprises to issue carbon-neutral bonds.This thesis explores and analyzes the issuing motivation and financing effect of green asset securitization products of Chinese enterprises under the background of dual carbon goals.In the research process,the case study methods were firstly utilized to carry out a comprehensive analysis of the second phase of green asset-backed notes of CTGR in 2021(hereinafter called ABN002 of CTGR in 2021).Then,comparative analysis methods and quantitative analysis methods were employed to analyze the motivation of issuing products,financing effect and impacts on the original stakeholders,so as to provide some inspiration for relevant green enterprises to implement green asset securitization.Research found that the motivation of CTGR to issue green asset-backed bills for financing is not only the need of achieving the strategic development,but the support of some policies.Besides,by analyzing the three dimensions of issuing enterprise,environment and society,the research shows that in terms of its own benefits,green asset securitization can facilitate enterprises to achieve off-balance-sheet financing,reduce the financing costs and improve their reputation.In terms of environmental effects,the current product possesses the property of carbon-neutral bonds and has a significant effect of carbon emission reduction.In terms of the financing effect of society,it initiates new financing channels and advances the development of green finance market in China.In addition,this thesis also analyzes the impacts of bonds financing,short-term stock price,and risk isolation on the original stakeholders.The results show that there are four issues in this case: centralized distribution of debtors in the underlying asset pool,incomplete disclosure of information,insufficient credit enhancement methods,the product stratification design being relatively simple.Finally,based on the above research on green asset securitization,this thesis draws the following conclusions.The issue of ABN002 of CTGR in 2021 is a desirable practice of carbon-neutral bonds in China.Green asset securitization is an essential mode for financing at present.The issue of carbon-neutral bonds is significant to the effect of carbon emission reduction.Green asset securitization helps enterprises to expand financing channels.Furthermore,this research implies that enterprises should take advantage of policies to choose financing methods appropriately;the market should increase its support and establish a green system facilitating investment;policies should amend relevant laws and regulations,and encourage the issue of green asset securitization products.