‘Polluting Assets Are Future Bad Loans’: Dr. Ma Jun

COLOMBO (News 1st); Dr. Ma Jun, Chairman of the Hong Kong Green Finance Association, has called on central banks around the world to play a more proactive role in supporting the transition to low-carbon economies, warning that continued investment in carbon-intensive sectors could pose long-term risks to financial stability.

He delivered a special lecture on the effective implementation of Green Finance Standards and Policies in Colombo, and emphasized that central banks are not separate from government policy but are integral to achieving structural economic transformation. “If the government wants to move the economy away from polluting and carbon-intensive sectors towards greener, low-carbon activities, then the central bank has to do something as well,” he said.

Dr. Ma highlighted China’s approach, where the central bank has introduced targeted re-lending facilities to support decarbonization, green technology, and small and medium-sized enterprises (SMEs). These tools, he noted, align with broader government objectives and help steer capital toward sustainable development.

However, he acknowledged that many central banks in the G20, particularly in Europe and the United States, claim they lack the mandate to engage in such targeted interventions. “That’s a problem,” Dr. Ma said, “but even within existing mandates, there is room to act.”

He argued that financial stability — a core responsibility of all central banks — is increasingly threatened by overexposure to carbon-intensive assets. “If I allow the financial system to invest too much in polluting sectors, it may destabilize the economy,” he warned. “These assets could become stranded, leading to bad loans in five to ten years.”

Dr. Ma cited sectors such as steel, cement, petrochemicals, shipping, aviation, agriculture, and energy as particularly vulnerable. As global demand shifts toward low-carbon products, he said, these industries may struggle to remain viable unless they adapt.