Connotations of Bank CSR

Taking the characteristics of banks into account, the Industrial Bank believes that the social responsibilities of a bank refer to the responsibilities undertaken by a commercial bank toward investors, customers, partners, employees, communities the natural environment and the social environment, and the social, legal and moral responsibilities that it should fulfill for the realization of social sustainable development. These responsibilities should be observed as a bank observes the code of business conduct, provides financial products and services and seeks to achieve profit targets to create long-term value.

Levels of CSR in Commercial Banks

1. Economic Responsibility. To survive, a bank must be accountable to its investors by ensuring the continuous growth of assets, the continuous expansion of the bank and continually increasing profits. It must also be held accountable for its production activities, profitability and consumer demands by implementing scientific operation and management.

2. Legal Responsibility. Commercial banks must undertake social responsibility in a way that meets the requirements of the legal society and market economy system, conduct business in compliance with laws and rules and in good faith and maintain a sound economic and financial order.

3. Moral Responsibility. Moral responsibility refers to obligations to be fulfilled by commercial banks other than statutory obligations, which involves having respect and caring for shareholders, customers and employees. It includes moral conduct, such as partaking in community public welfare activities, company ethics, which includes helping people in need and providing support for poverty relief and education aid, and also covers moral obligations, such as protecting and improving the natural and ecological environment, caring for social development and facilitating social harmony, progress and sustainable development.

CSR Declaration of Joint-stock Commercial Banks

In September 2008, the Joint Conference for the Presidents of China’s Joint-Stock Commercial Banks was held in Nanning, Guangxi. The meeting, themed “the CSR of China’s joint-stock commercial banks”, summarized and showcased the characteristics and accomplishments of various banks in CSR from the perspective of the recognition and practice of CSR in conjunction with the CSR concepts and practices of China's banking industry. The banks present at the conference signed the Declaration of the Social Responsibilities of Joint Stock Commercial Banks.

1. Realizing the CSR of joint-stock commercial banks

1.1 Continuously strengthen understanding of CSR connotations. Based on the contemporary relevance of CSR and characteristics of China's current stage of economic and social development, adopt correct business philosophy and values, integrate CSR into the development strategy of bank and endeavor to fulfill CSR throughout every aspect of business management.

1.2 Continue to uphold the basic objectives of fulfilling CSR, namely facilitating the sustainable development of the economy, society and environment. Make efforts to cater to the common interests of all stakeholders, protect the environment and resources and continue and further social public welfare.

1.3 Take full advantage of being a financial intermediary to guide and facilitate all sectors of society to better fulfill their social responsibilities through business management policies and conduct, thus creating a sound social atmosphere for the fulfillment of social responsibilities.

1.4 Strengthen management of CSR, draw lessons from the leading practices and experience of foreign and domestic enterprises in the fulfillment of CSR, establish a complete CSR management system and embody CSR management requirements in business processes and management procedures.

1.5 Establish sound assessment mechanisms for the regular assessment of CSR fulfillment, link CSR assessment to the improvement of internal management so as to enhance the standard of operations management.

1.6 Enhance the disclosure of information regarding the fulfillment of CSR, issue CSR reports in an appropriate way, promote communication and exchanges with all sectors of society and subject the enterprise to the their supervision.

1.7 Endeavor to develop a corporate culture that reflects CSR, turn CSR objectives, principles and methods into the common values, language and code of conduct of the bank and all employees.

2.Adhere to scientific development and create more value

2.1 Born out of China's economic and financial reform and opening-up, joint-stock commercial banks should remember their special mission and responsibilities. In a new era, banks should further implement scientific and rational approaches to development, intensify reform, accelerate innovation, improve management and services in the aim of making greater contributions to the government’s promotion of economic growth, the financial market, financial services, financial reform as well as creating more value for shareholders, financial consumers, employees and other stakeholders and completely fulfilling economic responsibilities.

2.2 Give full play to the key role of banks in the modern economy, implement China's strategic development plans, industry policies and credit policies, allocate financial resources rationally and improve capital utilization efficiency. Pay attention to and support new areas of economic growth, provide increasingly large financial support for new rural area construction, small business development, newly emerging industries and the growth of unique economies; make a commitment to providing convenient financial services to communities, improving community financial services and supporting community economic growth.

2.3 Keep improving corporate governance structure, protect the legal rights and interests of shareholders, treat every shareholder equally, make efforts to increase the return on investment (ROI) and create more value for shareholders.

2.4 Continue to innovate financial products and services, provide consumers with the best products and services with an ultimate aim to create more value for consumers in the course of effectively satisfying their increasing demand of financial services.

2.5 Conduct business in good faith and earnestly protect the legal rights and interests of consumers. Based on the principle of "know your customers well", perform customer suitability assessment, effectively warn customers of risks, disclose information, treat all customers impartially; establish and enhance a customer complaint handling mechanism, manage complaints throughout the entire process and work hard to promote customer satisfaction. Improve the customer information confidentiality system, employ better information security technologies and approaches and properly fulfill all non-disclosure obligations.

2.6 Actively assume the responsibility of providing informative information to financial consumers, carry out activities to promote such knowledge so as to guide and cultivate public awareness of finance and risks.

2.7 Keep on putting people first by caring for and protecting the legal rights and interests of employees. Enhance human resource management, pave a smooth path for employees career development, provide competitive salaries and fringe benefits, enhance the education and training system, promote the professional quality and skills of employees and facilitate the comprehensive development of employees; attach a high priority to employee health and safety, create an excellent working environment and organize a range of spare-time cultural activities.

3. Conduct business in compliance with laws and rules, and maintain financial security and stability

3.1 As an important part of the Chinese financial system, the joint-stock commercial banks should always conduct business in compliance with laws and rules and in a stable and orderly manner, subject themselves to financial supervision and regulation, implement the macro-economic control policies of the government, create a fair market, maintain financial security and stability of the country and completely fulfill the obligations stipulated in laws and rules.

3.2 Proactively subject the bank to financial supervision and regulation, and improve the management of the bank according to the requirements of regulatory authorities.

3.3 Actively implement the macro-economic control policies of the government, give full play to the role of an implementer of monetary policies and facilitate the achievement of the objectives of macro-economic control policies.

3.4 Enhance risk management, increase capital accumulation, establish an integrated risk management system, continually improve risk management approaches and means and effectively control and prevent credit risks, market risks, operational risks and compliance risks so as to ensure the stability and asset security of the bank.

3.5 Enhance and improve internal controls, optimize the internal control environment, fine-tune internal control regulations, intensify internal control measures, strengthen supervision, assessment, feedback and remediation with respect to internal control, ensure the effective control over various operations and effectively avoid and counteract risks.

3.6 Enhance compliance management, standardize business conduct, comply with the Convention of Moral Conducts of Banking Employees, the Professional Ethics of Banking Employees, the Anti-unfair Competition Convention, the Anti-bribery Commitment and other industry rules, advocate fair competition and maintain sound and fair competition in the banking market.

3.7 Actively protect the legal rights and interests of various business partners and make efforts to maintain the sound reputation and trust of commercial banks.

4. Enhance environmental protection and increase social public interests

4.1 As the key players in financial resource allocation and a from of social organization that exerts a strong social influence, joint-stock commercial banks should attach a high priority to environmental protection and resource conservation, actively serve social public interests and completely fulfill their responsibilities to the environment and public welfare and by means of disaster relief, education aid and poverty relief, and by providing support for social public undertakings such as culture, education and hygiene.

4.2 Make efforts to ensure that the business strategies, policies and procedures meet China's industry policies and environmental policies, allocate financial resources by taking sustainable development into account and support the sustainable development of society, the economy and the environment.

4.3 Actively formulate credit granting policies that fully integrate environmental protection responsibilities, clearly define credit granting procedures and standards, enhance the environmental impact assessment in credit granting, develop innovative financial products that are related to environmental protection, e.g. energy conservation and emissions reduction and provide increasing support for the implementation of policies regarding energy conservation, emissions reduction and environmental protection while developing new business opportunities.

4.4 Endeavor to support customers in the saving of resources and the protection of the environment by means of credit and other finance tools. Encourage clients to enhance their awareness of social responsibilities

4.5 Improve internal operation management, enhance resource saving and environmental protection during daily operations and try to mitigate negative impacts on the environment and resources to the greatest possible extent.

4.6 Show concern for social development, support social public welfare undertakings, provide as much support as possible for disaster relief, education aid, poverty relief, helping vulnerable groups in society and other social charity undertakings, as well as culture, education, hygiene and other social public service areas, and work hard to better serve social public interests.