On June 5-6, 2019, the UNEP FI Regional Roundtable Summit for Asia Pacific took place in Shanghai. Eric Usher, head of the UNEP FI, Ma Jun, Director of the Green Finance Committee of China Society for Finance and Banking, experts and scholars in green finance, and representatives from such financial institution as the Standard Chartered Bank, ABN-AMRO Bank and Industrial Bank (IB) gathered together.
As the core theme of the Roundtable, the Principles for Responsible Banking (PRB) was drafted by the United Nations Environment Programme Financial Initiative (UNEP FI), with the participation of 28 banks around the world, which aims to guide banks to integrate sustainable development elements at the strategic, portfolio and transaction aspects and all business areas. The draft PRB has currently been released for comments, and it is expected to be officially signed and published at the General Assembly of the United Nations in September 2019.
Hua Bing, General Manager of the IB Law and Compliance Department, expressed in his speech at the forum “The PRB Leads Industrial Transformation” that the PRB provides a new guideline and practical mode for financial institutions from the perspective of “development”. By sharing IB’s exploration and practical experience in the past ten years of adopting the Equator Principles, Hua believes that the PRB and Equator Principles have the same spiritual core, and same purpose of promoting the sustainable banking development.
Lu Zhengwei, Chief IB Economist, pointed out in the dialogue session of “Banking Regulatory Environment and Sustainable Development” thatm unlike the spontaneous and bottom-to-up green finance development path in many other countries, China’s green finance development presents more the top-down feature. In terms of multiple levels such as national strategies, financial and industrial policies, the government and regulatory authorities are actively guiding financial institutions to promote green finance, which contributed to the rapid development of green finance in China. At the same time, as for the policy guidance, Lu suggests lowering the risk weight of green assets and giving priority to repayment of green creditor’s rights.
As the first EPFI in mainland China, 2019 is the year that IB has adopted the Equator Principles for eleven years. “At the beginning of adopting the Equator Principles, we also thought that it was a constraint to us. However, after a decade of efforts, we have integrated the Equator Principles into all aspects of our banking management structure, business process and product design, and have proved that the Equator Principles are a mature model to help banks achieve long-term sustainable development.” According to Hua Bing. the Equator Principles have promoted IB’s innovation in the concept of sustainable development and realization of the three-level evolution and leap of corporate governance concept starting from giving priority to shareholders’ interests to taking the consideration to stakeholders, and then to advocating sustainable development, making IB a model of practicing sustainable finance in China. And on this basis, IB actively participated in the review and revision of international banking standards such as the new Equator Principles, Performance Standards issued by the IFC, continuously participated in and explored the innovation and development of sustainable finance in the Asia-Pacific region and even the whole world, and strived to make “China’s voice” to be heard in global sustainable finance.
By the end of the first quarter of 2019, IB has judged the applicability of the Equator Principles in 1,090 projects, of which 418 projects applied the Equator Principles, involving a total investment of RMB 1,816.9 billion.
This Roundtable Summit is part of the China-hosted events for the 2019 World Environment Day, and the two-day event focuses on the sustainable finance trends of Asia-Pacific economies, including such themes as the PRB launching and implementation, impact assessment and its growth, climate change-related information disclosure and construction of resilient infrastructures, realization of positive social impact and inclusiveness, trends in banking transformation, and digital innovation in sustainable finance.