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China Green Finance Awards

Best green credit rating agency 2017

China Cheng Xin International Credit Rating Co

China Cheng Xin International Credit Rating Co, established in 1992 in Beijing, is not only China’s largest domestic credit-rating agency, but also a clear leader in serving the domestic green-finance market.

CCXI, under chairman Yan Yan, is a pioneer in providing credit-rating services for green finance. It was the first of the agencies to give credit ratings for a wide range of green-finance products including green bonds, green asset-backed securities, green private placement notes (PPN) and green medium-term notes. Its green-finance clients include domestic financial institutions and companies, as well as international financial institutions such as New Development Bank.

CCXI is by far the largest credit-rating service provider for green bonds in China. Between April 2016 and March 2017, it rated 18 of the 59 green-bond issues launched on the domestic market. The green bonds were placed by 40 financial institutions and companies, 15 of which were CCXI’s clients.

While China’s green-bond market has taken off since 2015, the country lacks nationally recognized methodologies on how to rate green bonds. To plug the regulatory hole, CCXI became the first domestic credit agency to release its own complete set of methodologies on green-bonds’ credit ratings in August 2016.

These take into consideration the nature of the industries where green-bond proceeds are invested, the use of the proceeds in specific projects, the potential environmental benefits of projects funded by green bonds and the disclosure of information by the recipients of the bond proceeds.

CCXI’s methodologies for rating green bonds have won praise from China’s Ministry of Environment Protection and recognition from the most authoritative green-finance research organization in China – the green-finance committee of the China Society for Finance and Banking.

The agency has made a continuous effort to adopt international best practices. Last year, it signed the United Nations-supported Principles for Responsible Investment (PRI), becoming a member of a global network for investors and financial industry participants committed to integrating environmental, social and governance (ESG) considerations into their practices. It also became one of the first credit rating agency signatories to the PRI’s statement on ESG in Credit Ratings to advocate a more systematic and transparent incorporation of ESG into credit ratings and analysis.

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