In the 2019 ESG (Environmental, Social and Corporate Governance) rating of over 2,800 companies by the world’s largest indexing company, Morgan Stanley Capital International (MSCI), IB was promoted from “BBB” to “A” for its excellent performance in 2018 in terms of sustainable financial practice, corporate governance and information disclosure.
Based on the objectivity, impartiality, usefulness and openness of the indexes and ratings, the MSCI has become one of the most widely adopted benchmark indices by global investment managers and is an important basis for investment decisions and data analysis for major asset managers around the world.
In 2018, 234 Chinese A-shares, including IB, were officially included in the MSCI Emerging Markets Index and Global Benchmark Indexes. The MSCI-ESG ratings were based on the potential risks and risk mitigation capabilities of listed companies in environmental, social and corporate governance aspects, whose assessment process included information gathering, analysis, rating and solicitation of feedbacks from listed companies, and the final results were based on comparisons among peer companies, providing investors with a more convenient and valuable basis for investment.
It is reported that MSCI-ESG rating for the banking industry is based on the open data from 217 banks around the world, covering 37 key ESG themes reviewed on a weekly basis. The result of MSCI-ESG assessment shows that IB is leading the industry with outstanding performance in terms of green finance, stakeholder communication, inclusive finance and corporate governance.
In green finance, MSCI believes that IB has made every effort to play a leading role in the green finance industry. As one of the few EPFIs in China, IB has carried out effective ESG due diligence in its credit business and has formed an institutional, full-process environmental and social risk management system. By the end of 2019, IB has accumulatively made judgment on the applicability of the Equator Principles for 1,164 projects, of which a total of 491 projects applied to the Equator Principles with the total project investment of RMB 2,156.6 billion.
Corporate governance and stakeholder interaction account for a high proportion of the S-factor in MSCI-ESG ratings and have a significant impact on the rating results. IB is the first corporation in the banking industry to establish the governance concept of sustainable development, actively explores various ways to promote the fulfillment of social responsibility of the bank and development a positive situation of harmonious coexistence between human beings and nature, between human beings and environment and between human beings and society, and puts forward the practice of “integrating righteousness with profitability” to fulfill the social responsibility, which combines the social responsibility with its own business and explores a sustainable and practicable business model and social responsibility practice model for the bank and the society to a win-win result. Meanwhile, IB has always attached importance to the communication with stakeholders, and every year, it inquires stakeholders with key topics of sustainable development through questionnaires, covering such key aspects as customer service, performance and green finance.
In terms of inclusive finance, IB adheres to the CSR concept of “integrating righteousness with profitability”, takes business sustainability as the principle, and has formed a number of advantageous inclusive finance businesses in the fields of green finance, pension finance, banking platform, community banking, and finance for small and micro enterprises. IB is the first among Chinese joint-stock banks to set up an inclusive finance division, which has significantly improved its financial services in such areas as small and micro enterprises, “agriculture, countryside and farmers”, poor population, disadvantaged groups, and ecological construction, and has taken a differentiated path of inclusive finance with IB characteristics.
Along with the recognition of global capital market and its attention to the ESG concept, the ESG rating will become an important basis for overseas investors to increase their investment allocation to the Chinese market. Industry insiders say that the promotion of MSCI-ESG rating is the capital market’s recognition of IB’s comprehensive management level in environmental, social and corporate governance and the ability to create values continuously, as well as the “blossoming result” of IB’s adherence to the sustainable development and the recognition of its long-term investment value.