On October 29, 2021, in the “2021 China Banking Annual Meeting and 2021 Tianji Award Selection” organized by the Securities Times, the Industrial Bank (IB) won the “2021 Tianji ESG Practice Award of China’s Banking Industry” for its outstanding performance in ESG (Environment, Society and Corporate Governance) practice.

IB has always been adhering to the concept of sustainable development and the CSR practice mode of “combining righteousness with profitability”. In recent years, ESG, as a tool of practicing the concept of sustainable development, has been valued and recognized by more and more enterprises. Through the implementation of the ESG strategic planning, construction of such management measures as the ESG management system and ESG information disclosure indicators, IB has gradually introduced the ESG management system into its corporate governance and daily business activities, and pushed the Bank’s sustainable financial practice into a new stage.

In terms of corporate governance, the IB Board of Directors, as the decision maker of its ESG development, formulated a new five-year plan at the end of 2020, which further established the high-quality ESG development as the guiding principle for future development. While actively promoting the development of green finance (E), it emphasizes improving the ability and level of society (S) and governance (G), has formed a new pattern of balanced development of three pillars, and became the leader of ESG development in the banking industry. As the organizer and executor of ESG development, the IB senior management attaches great importance to the role of ESG non-financial indicators in its operation and management, and continuously improves the refined level and sustainability of operation and management from the perspectives of corporate governance, risk control, product innovation and information disclosure. Take the information disclosure as an example. IB not only Apart from continuing to follow the United Nations Sustainable Development Goals (SDGs), the information disclosure indicators in the Principles for Responsible Banking, and GRI Sustainable Development Reporting Standards, IB further strengthens its ESG information disclosure practice in line with the mainstream ESG ratings standards of domestic and foreign markets, TCFD framework, and ESG information disclosure guidelines of Hong Kong Exchange and Clearing Limited, and builds a social responsibility indicator system with 370 indicators in five categories. It has conducted dialogues and exchanges with stakeholders for several years through questionnaires, and collected nearly 50,000 questionnaires, who responded to the demands of stakeholders, and improved the quality of information disclosure in the diversification of disclosure channels, certainty of disclosure scope, and detail of disclosure contents. Another example is that, in the face of realistic and urgent climate risks, IB explored the integration of ESG into the comprehensive risk management system, promoted the integration with the original risk management process, conducted the climate stress testing, calculated the risk exposure of brown assets and figured out the “carbon-related resources” so as to gradually reduce the proportion of high-carbon assets, and prevent the risk of low-carbon transformation.

In terms of environmental and social risk management system, IB continues its innovation and construction of ESG market ecosystem, gives full play to the advantages of its green finance groups, and makes efforts from both supply and demand sides to enrich the domestic ESG investment market. On the one hand, it steadily promotes the securitization of green credit assets, continuously increases the underwriting and issuance scale of green bonds, focuses on the peak carbon dioxide emission and carbon neutrality, innovates such bond varieties as blue bonds and carbon neutrality bonds, and provides ESG investors with more safe and high-quality assets. The underwriting scale of IB green debt financing instruments of non-financial enterprises has been ranked in the forefront of the market for many years, and it has been the largest green bond issuer of commercial financial institutions in the world. On the other hand, in cooperation with subsidiaries such as the China Industrial International Trust, CIB Fund Management, and CIB Wealth Management, IB actively develops an ecological circle of green investment and ESG investment, and forms an ESG wealth management system covering green trust, green Public Offering of Fund, ESG wealth management, to open up the channels of “investment and financing” and accelerate the transformation of residents’ savings into green investment. The IB Wealth Management, a wholly-owned subsidiary of IB, issued the first net worth green theme wealth management product “IB ESG Beautiful China No. 1” in September 2020 and introduced the first mixed ESG wealth management product “IB ESG Green Development” in October this year, and has issued a total of seven green theme wealth management products.

As the first EPFI in China, IB promotes the “upgrading” of risk management tools with the help of ESG concept, which is based on the practical experience of Equator Principles, and explores the efforts to apply them to the service-front such as customer screening, investment decision, product creation and asset distribution. IB focuses on the key areas of “carbon peaking and carbon neutrality” and such key industries of reducing carbon emissions as the air pollution control, solid waste management, clean energy and green transport, with the “financing + intelligence” integration and the “trading + market” making, to form a variety of group-based green finance products and service systems, such as green financing, green leasing, green trust, green fund, green finance management, and green consumption. By the end of September 2021, IB had accumulatively provided 38,804 enterprises with a total of RMB 3,421.1 billion in green financing and the supported projects are expected to save 35.24 million tons of standard coal and reduce 95.03 million tons of carbon dioxide emissions in China each year. Among the 1,488 projects judged by the Bank on the applicability, 815 projects were applied to the Equator Principles, with a total investment of RMB 3,541.4 billion 

At the same time, IB has closely combined the strengths of technology and green finance, and actively explored a new path to achieve the “carbon peaking and carbon neutrality” goal with the help of ESG concept. Its self-developed “from Green to Gold” system, through the integrated application of such technologies as AI, GIS and big data, is able to accurately measure the environmental benefits of dozens of related industries, such as low-carbon economy, circular economy and ecological economy. IB has become an industry-leading IT support platform for group-based green finance business through accurate analysis and assessment of target enterprises on social and environmental risks.

During the process of realizing the carbon neutrality, IB has not only defined its goals and road map, but also monitored the carbon emissions and carbon footprints of its own, enterprises under its service and projects by using such technologies as the big data, the Internet of Things and block chain, so as to improve its ESG management capacity. In July this year, the United Nations Global Compact released the first Corporate Carbon-neutrality and Road Map of Enterprises. IB, as an active practitioner and advanced model of sustainable finance, was selected as a practice case in the financial service industry by highlighted action of reducing carbon emissions such as developing diversified green financing products and services, taking an active part in the carbon trading market, and helping peers find green finance solutions, and became one of the seven representative enterprises that have been studied and analyzed by the Global Compact.

In terms of social responsibility, as one of the first banks that signed the United Nations “Principles for Responsible Banking”, IB comprehensively implements new development concepts with a “responsible” business model, constantly innovates new models of serving the real economy, continuously makes efforts to enhance inclusive finance, promotes the digital transformation of financial services for micro, small, and medium enterprises, upgrades consumer protection, improves financial service capacity for rural revitalization, and delivers the well-beings to the people by providing professional products and services. IB has formulated and introduced guidelines for rural revitalization and defined the “planning map” and “road map” for rural revitalization, and adopted seven differentiated measures, e.g. “regional + industries”, “offline + online”, “green + inclusive” and “Internet + platform” models, to channel the financial resources into the areas related to the agriculture, farmers and countryside. IB has addressed the problems encountered in the development of micro and small enterprises, constructed and operated the Financial Service Cloud Platform in Fujian Province, solved the problem of information asymmetry in the financing of small and micro enterprisesthrough the “finance + technology+ data + policy” integration, accurately and effectively alleviated the financing difficulties of micro, small, and medium enterprises, and assisted in the implementation of preferential policies for enterprises such as alleviation loans for difficult corporate situation, commercial loans and foreign trade loans. By the end of September 2021, the number of registered enterprises on the Financial Service Cloud Platform has exceeded 148,000, and the number of transactions to solve the financing needs was more than 25,000, with the amount of nearly RMB 85 billion. IB actively explores and promotes the development of “IB Inclusive Cloud” platform, builds the inclusive finance business centered on online financing of micro, small and medium enterprises, actively accesses to government platforms, industrial Internet, supply chain finance and platform economy so as to form a new digital service model of “platform dock, scenario integration, online access and cloud service”, which continues to empower the high quality development of small and micro enterprises.  

In terms of public interest and charity, IB has long formed a three-in-one mechanism of “donation for education” “disaster prevention and relief” and “poverty alleviation”. Since 2021, it has supported flood control and epidemic prevention and control in many places, with a total donation of RMB 46 million. At the same time, it has set up “IB Cares” stations for the people in more than 2,000 business outlets of 44 branches in mainland China, and provided more than 40 items of convenient and beneficial services in four categories to the public, and constantly improved the open, public good, inclusive, and normalized service mechanism for the convenience of the people to provide financial services with love.

In recent years, IB has been widely recognized for its outstanding performance in ESG practice, and has been rated at A in the ESG global rating conducted by the MSCI, the largest index company in the world, for three consecutive years. IB expressed that it would continue to benchmark the international mainstream ESG evaluation system, improve the ESG governance structure, mechanism and process, strengthen the risk management and product innovation of ESG concept, enhance the ESG rating system, and strive to become an active promoter and industry leader in the ESG field.