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Article by Yuan Jiwei, Executive Director of Gansu Provincial Financial Society
In promoting the global sustainable development process, debt financial instruments such as green bonds and green loans are flourishing, guiding social funds towards the green low-carbon sector. In recent years, green stocks have gradually emerged, further enriching green financial instruments. China can draw on overseas practical experiences to promote green stock pilots, strengthen the role of capital markets in supporting green low-carbon transformation, and contribute to the construction of Chinese-style modernization.
The Rise and Evolution of Green Stocks
In the face of climate change challenges, countries around the world are accelerating green low-carbon transformation and development, optimizing energy structures, and cultivating green industries. According to statistics from the World Economic Forum, by 2024, the global green economy will exceed USD 5 trillion. Data from the Climate Policy Initiative shows that global climate investment and financing will exceed USD 2 trillion in 2024, but this is far below market demand, with climate investment and financing needs reaching USD 7.5 trillion annually from now until 2030, and over USD 8.8 trillion annually from 2031 to 2050.
To facilitate green projects or activities in obtaining funding, countries are increasing innovation in sustainable financial tools, such as green bonds, sustainable development bonds, and blue bonds. In 2007, the European Investment Bank issued the world's first green bond, and in 2014, the International Capital Market Association launched the &#34;Green Bond Principles.&#34; Countries are accelerating the development of sustainable debt instruments. According to World Bank statistics, by the end of September 2025, the cumulative issuance of global green bonds, social responsibility bonds, sustainable development bonds, and sustainability-linked bonds will reach USD 6.59 trillion, providing substantial funding for the green low-carbon industry.
Securities exchanges in various countries are leveraging the capital market's investment and financing functions to provide financial tools and services such as green bonds, sustainable development bonds, social responsibility bonds, and sustainable development indices. These financial innovations have made significant contributions to supporting sustainable economic and social development. However, existing sustainable financial innovations are mostly concentrated in the debt instrument sector, which primarily applies to mature or financially stable enterprises. If a company is a small or medium-sized enterprise or wants to optimize its capital structure, it needs to innovate and develop green equity instruments, including green stocks.
Although the concept of green finance has been proposed for a long time, green stocks have never had a clear definition. Unlike green bonds, green stocks correspond more to the daily operational activities of enterprises and cannot be directly linked to specific green projects or activities, making precise definition somewhat challenging. Countries are actively building green financial standard systems and deepening the development of green finance, gradually establishing a foundation for promoting green stocks. In 2020, the Swedish Bank collaborated with the Swedish International Climate Research Center to develop a green equity framework, and the Swedish real estate company K2A obtained green equity certification.
In 2021, Nasdaq launched a green stock certification mechanism in Europe to explore the development of green stocks. In 2023, the World Federation of Exchanges introduced the &#34;Green Stock Principles&#34; based on practical experience, covering five core areas: income or investment standards, classification, governance, assessment, and information disclosure, providing a reference framework for exchanges in various countries to formulate green stock rules
It is also beneficial to strengthen the global uniformity of green stock rules. Driven by this, countries such as Brazil, the Philippines, Vietnam, and Indonesia are actively developing green stocks, forming new momentum for the development of green stocks.
Establishing and promoting green stocks has positive significance for governments, enterprises, financial institutions, exchanges, and other entities.
First, it enriches green financial instruments. Green debt instruments such as green bonds and green loans are quite prevalent globally, while green equity instruments are very few. Developing green stocks can enrich green financial tools, increase options for corporate green financing instruments, and gather more social funds to support climate change responses and accelerate sustainable development.
Second, it encourages corporate green transformation. Green stock certification is a full affirmation of a company's commitment to green development. Exchanges generally display listed companies that have obtained green stock certification, which can greatly enhance market branding and image; companies can showcase their green business models and key performance indicators to investors, which is conducive to attracting investor attention, enriching funding sources, reducing financing costs, and gradually establishing a prominent differentiated market competitive advantage.
Third, it promotes green investment and financing. There is still a significant gap in green investment; establishing a green stock mechanism effectively expands the range of ESG investment options; it reduces the difficulty of identifying green assets, prevents the risk of greenwashing, enhances investor confidence, and accelerates the pace of sustainable financial development.
Fourth, it enhances the function of exchanges in serving green development. The capital market is an important financial platform and vehicle for promoting green economic development. Global exchanges actively participate in the development of green finance, facilitating the issuance, trading, and price discovery of various financial instruments. Stocks are important trading assets for global exchanges, and developing green stocks is beneficial for enriching the supply of green financial instruments in exchanges and enhancing their function in serving the green and low-carbon development of the economy and society.
Green stock practices of five overseas exchanges
Currently, five exchanges globally have developed green stocks. In 2019, the London Stock Exchange launched the Green Economy Mark, becoming the world's first. In 2021, the Nasdaq Nordic Exchange introduced green stock certification rules. After the World Federation of Exchanges proposed global uniform rules in 2023, the Brazilian Stock Exchange, Swiss Stock Exchange, and Philippine Stock Exchange successively launched green stock rules, indicating a trend of accelerated development of green stocks. By 2026, the Vietnam Stock Exchange, Indonesia Stock Exchange, and Taiwan Stock Exchange are set to join the ranks of developing green stocks, and they are intensifying the formulation of relevant rules, further expanding the number of exchanges developing green stocks. To better understand global green stock practices, the following analyzes the specific practices of these five exchanges.
Among these five exchanges, the Philippines has its Securities and Exchange Commission formulate green stock rules, with the exchange responsible for specific implementation, while the other four exchanges have independently formulated green stock rules and their specific execution. Green stock rules generally include aspects such as the goals of green stocks, applicable entities, certification standards, and review institutions. The specific practices of the five exchanges are generally quite similar, but there are also certain differences.
In terms of green stock goals, the London Stock Exchange, Nasdaq Nordic Exchange, Brazilian Stock Exchange, and Philippine Stock Exchange have similar green stock goals, all aimed at identifying companies that contribute to environmental protection and climate change response
The Swiss Stock Exchange's green stock goals are significantly different, focusing on identifying listed companies that have scientifically formulated climate transition plans and effectively implemented them. This includes both green industry companies and some high-carbon emission companies that are transitioning towards a green low-carbon direction.
In terms of the entities applying for green stock certification, typically only listed companies can apply. However, the Nasdaq Nordic Stock Exchange and the Philippine Stock Exchange also allow non-listed companies to apply for certification, and these companies can still use the green stock certification after their IPOs. The London Stock Exchange also allows funds to apply for green economy labels, while other exchanges do not certify funds.
Regarding certification standards, the certification standards are the core of the green stock rules, primarily based on revenue and investment related to the green economy. Based on the company's latest audited financial statements, it generally requires that revenue related to the green economy accounts for more than 50%, revenue from fossil energy does not exceed 5%, and the combined proportion of capital expenditures and operating expenditures related to the green economy exceeds 50%.
However, the London Stock Exchange has established a dedicated green revenue model to assess the proportion of a company's revenue from the green economy. The Swiss Stock Exchange's certification standards focus on the listed company's climate transition plans, implementation measures, and climate performance indicator disclosures, which are unrelated to financial indicators such as revenue and investment. Beyond the core standards for green stock certification, each exchange will still implement the principle of no significant harm, requiring listed companies not to cause outstanding negative impacts on society and the environment, to have good ESG performance, and to have no violations of laws and regulations. After successful certification, if the exchange or regulatory authorities find that the company no longer meets the certification standards or has outstanding negative impacts in terms of ESG, the green stock label will be revoked...
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Source | &#34;Tsinghua Financial Review,&#34; March 2026, Issue No. 148
Editor | Wang Mao
Reviewed by | Qin Ting
Chief Editor | Lan Yin Fan

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China's green stocks are gradually rising, enriching green financial tools and assisting in the green low-carbon transition. The global green economy is expected to exceed USD 5 trillion by 2024, but the demand for climate investment and financing far exceeds supply. Countries are increasing innovation in sustainable financial tools, promoting the development of green bonds and others. Existing financial innovations are mostly concentrated on debt instruments, and small and medium-sized enterprises urgently need innovative development of equity instruments such as green stocks to support sustainable development

The Development and Suggestions of Green Stocks in Our Country | Capital Market