Recently, the Securities Times released the White Paper on ESG Development in China (2021) (hereinafter referred to as the “White Paper”), which provides advice on ESG development in China from various aspects such as the ESG policies, evaluation systems, investments and typical practices, and promotes the construction of a positive ESG ecology by various players in the market. With its excellent ESG performance, IB was the only corporate representative selected for the typical ESG case study.
The White Paper thinks highly of IB: “IB is an excellent representative of ESG practice in the domestic banking industry, who has been vigorously developing green finance at the environmental level and ranking among the top in many core business data; increasing support for inclusive finance at the social level and creating differentiated samples by leveraging its own strengths; attaching importance to ESG practice at the corporate governance level from the governance system and high-level strategy, insisting on high-quality external disclosure of ESG information for a long term, and conducting a two-way but high-quality communication with various stakeholders.”
Along with China’s entry into a high-quality development stage, especially in the context of carbon peaking and carbon neutrality goals and common rich strategy, ESG development in China will usher in historical opportunities which has been gradually spread out in the financial sector. Since the China Banking and Insurance Regulatory Commission issued the Guidance on Promoting the High-quality Development of the Banking and Insurance Industries in 2020, which clearly requires banking institutions to strengthen the communication and interaction with stakeholders regarding ESG information disclosure. The ESG management has become an important starting point for the high-quality development of banking institutions. In 2022, the China Securities Regulatory Commission issued the Guidelines for Listed Companies on the Management of Investors Relations, which included “environmental, social and governance information of companies” in the communication content of investor relations management for the first time, promoting ESG information disclosure and ESG investment development process of listed companies.
As a pioneer in the ESG field, IB has been rated A, the highest ESG rating by MSCI for three consecutive years, becoming the only banking institution in the banking industry of mainland China with rating A for three consecutive years
In the E-dimension, IB has been “planting green” for 16 years since 2006, forming a complete and diversified green financial product and service system, who is the largest commercial financial institution in the world in terms of green financial debt issuance and underwriting. In 2021, IB launched a new round of five-year development plan, making green banking the first of the “three business cards” to further update it to the strategic level, which promoted the accelerated development of green finance, and helped China’s economy and society undergo a comprehensive green and low-carbon transformation. By the end of 2021, IB had provided green financing to 38,000 enterprises with a balance of RMB 1.39 trillion, an increase of 19.98% from the beginning of the year, of which green loans of human bank caliber increased by 42.10% from the beginning of the year to RMB 453.940 billion, and the projects supported are expected to achieve annual savings of 40.88 million tons of standard coal and annual reduction of carbon dioxide emission at the amount of 106.72 million tons in China.
In the S-dimension, IB has taken a differentiated and distinctive path of inclusive finance around the themes of serving small and micro enterprises (SMEs), supporting rural revitalization and promoting common prosperity. In terms of services for small and micro enterprises, IB is the first joint-stock bank in China to set up the Inclusive Finance Business Unit, which has achieved the goals of increased volume, expanded surface, reduced costs and improved efficiency in financing for small and micro enterprises in recent years. By the end of 2021, IB’s balance of inclusive loans small and micro enterprises was RMB 298.8 billion, an increase of RMV 107.5 billion from the beginning of the year.
In terms of serving rural revitalization, IB specifically issued guidelines in April 2021 to draw up a “planning map” and “road map” for high-quality service to rural revitalization, so as to promote further enhancement of economic vitality and development momentum in areas freed from poverty, further increase the industrial competitiveness of rural enterprises and basic public services, and continue to improve the ecological environment of rural areas and the living standards of the low-income population. By the end of 2021, IB’s balance of agriculture-related loans, inclusive agriculture-related loans and loans to new agricultural business entities would be RMB 476.2 billion, RMB 27.8 billion and RMB 31.2 billion, with an increase of 10.67%, nearly 80% and 14.47% respectively.
In terms of public welfare and charity, IB continues to build a charity pattern of “IB Cares” and has formed a long-term three-in-one charity mechanism of “Donate Money for Education”, “Disaster Relief” and “Helping the Poor”. By the end of 2021, IB had donated more than RMB 100 million for education and public welfare events, sponsored more than 100,000 students to fulfill their dreams, and donated about RMB 70 million in the year, including more than RMB 32 million in the fight against epidemics. At the same time,IB has launched “IB Cares” public welfare stations in more than 2,000 business outlets throughout the Bank, offering various convenient facilities and services for the targeted group for free.
In the G-dimension, to further improve the ESG governance system and deepen the governance concept of sustainable development, IB has revised its Articles of Association, changed the Strategy Committee under the Board of Directors into the Strategy & ESG Committee, and specified the Board of Directors to bear the ultimate responsibility for ESG management while including such indicators as serving high-quality economic development and green finance in the management performance evaluation of the management. Moreover, IB has reasonably selected directors, added one female director and one director with ESG professional background to the new Board of Directors so as to ensure the independence, diversification and professionalism of the Board. Furthermore, IB has strictly implemented the Code of the Industrial Bank on Professional Ethics for Directors, Supervisors and Senior Managers, revised the Thirteen Prohibitions of the Industrial Bank on Employees’ Behaviors, and added an “ESG Management Center”, scientifically determined the key issues of sustainable development, promoted the construction and management of ESG system, and continuously improved the standardization, professionalism and accuracy of ESG management.
High-quality information disclosure is one of the important foundations of ESG governance system. IB has disclosed ESG information to the public for 14 consecutive years. In addition to continuing to comply with the United Nations Sustainable Development Goals (SDGs), the Information Disclosure Indicators of the Principles for Responsible Banking and the GRI Standards of Sustainable Development Reporting, IB has further strengthened the ESG information disclosure by benchmarking mainstream ESG ratings in domestic and foreign markets, the TCFD framework and the ESG Information Disclosure Guidelines of Hong Kong Stock Exchange, and developed a social responsibility indicator system with 370 indicators in five categories. Moreover, IB has established a multi-dimensional and multi-frequency independent disclosure system through such practice as the Annual Report, the Annual Sustainable Development Report, the continuously updated official website and the semi-annual social responsibility report From Green to Gold.
IB has always been mindful of the notion “Top Priorities of the Country”, incorporated important national development strategies, such as high-quality development, “double carbon-related (carbon peaking and carbon neutrality)” goals, rural revitalization and common prosperity into its ESG practice vision, and has striven to make greater contributions to sustainable economic and social development while continuously improving the corporate ESG performance. The White Paper also pointed out that, “IB has become a typical ESG representative with its outstanding practices from the environmental, social and governance perspectives.”