China ICT net zero brings billions in new green finance

China ICT net zero brings billions in new green finance – Our digital future is ever more power hungry and thirsty. This month, off the back of our new report and explosion of new China chatbots, we dive into how 5 HKEX ICT listco’s can “net zero HK’s emissions” 2.5x over plus open new avenues for billions of dollars in green finance. Hear from BNP’s Huang on fintech giant Ant Group’s US$6.5bn sustainability linked loan and find out why TED talk carbon expert Liu is confident that China will hit its decarbonisation targets.

We launched our new report “China ICT net zero transition – the good, the bad and the ugly” which analysed the net zero performance of 5HKEX listco’s – Alibaba, Baidu, China Mobile, Tencent and Xiaomi. In case you missed it, due to the deluge of floods around the world from Hong Kong, Shenzhen, Greece, Bulgaria, Turkey and Libya catch up with our summary.

The 5 HKEX listco’s lag their NASDAQ counterparts – their highest renewable energy sourcing rate is around 7% whereas many of the Silicon Valley listco’s have already achieved 100%. Our report shows that catching up provides clear opportunities across on-site/off-site renewable production, green power purchase agreements & carbon credits.

It’s not just 87 million tonnes of emissions cuts on the table, but billions in ICT green finance is also up for grabs. So how do we tap into this? What are the opportunities here today? What facilities can be used? To answer these questions and more we sat down with Chaoni Huang, Head of BNP Paribas’s Sustainable Capital Markets APAC division.

Huang was part of the team that arranged this first-of-its-kind sustainability-linked loan for China ICT and we chat with her on the innovative loan structure, its two-way interest rates and how it came about with Ant Group. Huang also shared advice for tech companies looking to finance their decarbonization.

Want a slice of these carbon cuts and new green finance pie? Sign up for one-on-ones or request a presentation to unpack the good, bad & ugly of the China ICT sector.

Not yet convinced? China ICT doesn’t have a choice as it’s now classified as a dual-high industry alongside cement & steel. But is China on course to decarbonise? Here, we turn to China carbon expert & independent policy consultant Hongqiao Liu who gives multiple indicators on why she remains confident despite economic uncertainties.

What are these indicators? What about the potential coal resurgence? Liu shares six reasons why China is on track but says that we may need to be more patient.

China ICT transition can certainly bring great momentum. As of now, the sector’s (& the 5 HKEX listco’s) non-fossil fuel energy share is far behind national levels – as of June 2023, non-fossil fuel energy = 51% of national installed power generation capacity and is set to grow.

ICT transition is urgent – especially with the rise of AI. Adding generative AI to a search engine uses at least 4x to 5x more computing per search. This means more energy to decarbonize and even more billions of new green finance. For context, Google’s search engine emits the annual carbon emissions of Laos every day.

Chatbots also require lots of training and training sucks up power; they also guzzle lots of water – see how much water ChatGPT drinks per conversation – it will blow your mind. If we don’t up the urgency to fast-track the transition, chatbots could literally kill us faster.

Our world is only becoming more digital. We are glued to our smart devices, clogging the cloud with billions of photos, short videos and so on. We cannot imagine life without the internet, but right now, this is highly carbon intensive.

Our world is also becoming more vulnerable to extreme climate events. In this month of devastating typhoons & floods around the world, decarbonising ICT is a no brainer – there are huge emission cuts for the taking and the sector’s bankable. Don’t miss out on this new green wave … it’s time to surf it!