China’s path to net-zero emissions will become increasingly difficult

ESG – Global: Prevalence of ESG factors in public-sector rating actions rose in 2020 - We reviewed nearly 5,600 credit rating action announcements that we published in 2020, finding that the frequency of ESG considerations increased significantly from the prior year.

Environmental Risks – China: Path to net-zero emissions points to bumpy transition for fossil fuel-driven sectors - Global momentum and domestic initiatives behind reducing carbon dioxide emissions to net zero by midcentury will have credit implications for Chinese entities across sectors.

Regional & Local Governments – China: Carbon transition will be uneven, with credit risks for provinces in northern - Provinces with large legacy carbon-emitting industries or exposure to coal mining and weaker fiscal and state-owned enterprise profiles will have most difficulty bearing cost of transition.