In March 2021, the Industrial Bank (IB) released the 2020 Annual Sustainability Report” (hereinafter referred to as the “Report”). In 2020, adhering to the concept of sustainable corporate governance and the way of practicing social responsibility of “integrating righteousness with profitability”, IB adopts the “1234” strategic system as a guide to strengthen and implement the principles for responsible banking, innovates its social responsibility products and services, and contributes to China’s high-quality economic and social development in multiple dimensions.
The Report comprehensively demonstrates IB’s practice and achievements in practicing its social responsibility and actively promoting high-quality economic and social development in 2020 by benchmarking the key issues of IB’s sustainable development with the United Nations Sustainable Development Goals (SDGs).
The Report shows that, in the face of the impact of the COVID-19 in 2020, IB remembers its original mission, gives full play to its advantages of “commercial bank + investment bank”, comprehensively uses the Group’s resources and diversified financial tools, fully supports the victory in the “four major battles” of blocking Covid-19 in epidemic prevention and control, defending economic development, fighting in the poverty alleviation, and preventing and controlling the pollution, and effectively serves the overall situation of “stability in six key aspects” and “guarantee in six key areas” to contribute to China’s development.
Serving the real economy and shouldering the risks together
While achieving remarkable results in business transformation through firmly promoting the “1234” strategy, IB faces the key and weak areas of real economy, and promotes the development of Chinese economy from a disadvantaged situation, and shouldered the difficulties and risks with the real economy. In 2020, IB’s new loans were RMB 524.2 billion, and the growth rate of loans was 4.76% higher than the growth rate of assets; both the increment and the growth rate were at the forefront of same or similar type of Chinese banks. Among them, new personal loans, inclusive loans for small and micro enterprises, manufacturing medium and long-term loans, and green financial loans accounted for more than 80% of the total IB loans.
In the face of the epidemic, IB has been conducting well the work of stabilizing enterprises and ensuring the employment, continuing to increase the financial supply to market players such as the manufacturing, small and micro enterprises that were seriously affected by the epidemic and supporting China’s manufacturing sector to strengthen and replenish the supply chain so as to accelerate China’s economic recovery. By the end of 2020, IB’s manufacturing loan balance was RMB 373.532 billion, of which the medium and long-term manufacturing loan balance was increased by 46.42% compared with the beginning of the year; the number of customers and the balance of inclusive loan for small and micro enterprises were respectively increased by 68% and 61% compared with the beginning of the year, and the average loan interest rate decreased by 1.28% compared with the beginning of the year.
Focusing on the financing needs and characteristics of private enterprises, especially private small and micro enterprises, IB has been continuing to build and improve service strategies and exclusive product systems, and combining the solutions to the pain points and difficulties of private enterprises with its own business innovation and operational characteristics. IB independently developed a small and micro enterprise online financing system based on big data intelligent risk control, and may quickly complete the approval procedure for loan application through a three-dimensional and clear “data portrait” of small and micro enterprises, and effectively promote the improvement of small and micro financing efficiency. It has upgraded and built the “Finance Service Cloud” platform in Fujian Province, and effectively solved the information asymmetry between banks and enterprises through the “finance + technology + data + policy” integration, which alleviated the problems of difficult, expensive and slow-process financing for private and small and medium-sized enterprises. By the end of 2020, IB had more than 30,000 private corporate customers, with a loan balance of RMB 833.777 billion; the number of small and micro enterprise loan customers reached 119,000, with a loan balance of RMB 805.455 billion; the number of enterprises registered with the “Finance Service Cloud” platform exceeded 90,000, releasing financing demand at the amount of more than RMB 150 billion, and addressing their financing needs accumulatively for more than 10,000 transactions with an amount of nearly RMB 44 billion.
In the field of inclusive finance, IB thoroughly implements the work requirements of national inclusive finance policies, and practically increases its financial support to clients in key areas and weak links, e.g. the enhancement of financial support to rural areas and credit support to agricultural and sideline industries and featured local industries. By the end of 2020, IB’s loan balance related to the agricultural, countryside and farmers was RMB 443.899 billion. Moreover, it has extended modern financial services to more third and fourth tier cities, rural areas and remote areas by acting as an agent for small and medium-sized rural banks to access the Central Bank’s financial infrastructure. By the end of 2020, IB’s Bank-Bank Platform represented 213 small and medium-sized rural banks to access the People Bank of China’s small and medium-sized payment system, 64 small and medium-sized rural banks to access the inter-bank clearing system for online payment, and 135 small and medium-sized rural banks to access the net-link platform, which has effectively addressed the problem of “difficulty in payment” for small and medium-sized rural banks. Furthermore, IB has focused on building a scenario ecosystem, taking the connection of industry scenarios as an entry point, relying on output technological and financial capabilities of open banking, targeting key industry consumption scenarios such as the medical care, education, transportation, housing construction and government affairs to provide customers with more convenient and comprehensive financial services, which has deeply reached the upstream and downstream of customers and the ecosystem. By the end of 2020, IB has provided services for more than 7000 customers through the development of platform projects, making the public-private linkage more closer, and formed an ecological chain that closely connects various clients from the government (G) to the enterprises (B) and then to individuals (C).
As a national joint-stock commercial bank headquartered in Fujian Province, the core area of the Maritime Silk Road, IB has been actively responding to the “One Belt, One Road” initiative, combined its own business endowments and continuously promoted the internationalization of its own business, who provides high-quality and unique financial services for the “One Belt, One Road” initiative，and serves the development of China’s opening to the outside world. In 2020, IB has accumulatively supported a total of 12 overseas merger & acquisition projects of Chinese enterprises with a total financing scale of RMB 23.258 billion, covering a variety of ongoing projects such as privatization of Chinese capital stocks, cross-border mergers and acquisitions of listed companies, overseas red-chip structure construction and overseas debt restructuring.
Practicing the “Two Mountains Theory” to help low-carbon transformation
Green is the IB’s most distinctive feature and advantage. In 2020, under the guidance of the “Two Mountains Theory”, IB promoted the resumption of work and production with vivid green financial practices, supported green poverty elimination, and served green development. It focused on key areas such as utilization and protection of water resources, solid waste treatment, air pollution governance, new energy, green transport and green buildings. The “financing + intelligence” integration supports green and low-carbon transformation of China’s economy and society, transformed the advantages of professional ability in green finance into convenient and green financing products and services, innovatively launched green financial products and services such as “environmental protection loan”, “water saving loan”, “green ticket pass” and “green loan for innovative investment”. In addition, IB released the first ESG financial product, underwrote the first “green epidemic prevention bonds” in the Chinese market , issued overseas blue bonds in Hong Kong and underwrote the first corporate blue bonds in mainland China.
By the end of 2020, IB’s financing balance of green finance was RMB 1,155.76 billion, and it totally served 29,829 green finance customers, with an increase of RMB 144.9 billion and 10,375 customers respectively compared with the end of the previous year. IB totally issued green financial bonds for RMB 130 billion, and its domestic stock of green finance bonds reached RMB 100 billion, which actively contributed to the realization of “carbon peaking and carbon neutrality” goal. At the same time, IB exerted the “green+” effect, explored the green development model of financial support for poverty alleviation and rural revitalization, and invested a total of RMB 12.690 billion in green funds for projects of poverty alleviation and rural revitalization.
One flower does not make a spring. As a “pioneer” in the field of green finance, IB has promoted the development of green finance and green transformation of the entire Chinese banking industry in recent years in terms of the formulation of regulatory policies, industry advocacy and guidance, inter-bank mutual assistance, and domestic and foreign communication. In line with the cooperation concept of “intelligence, financing, and business” integration, IB signed green finance cooperation agreements with the governments of 9 provinces (autonomous regions), i.e., Guizhou, Zhejiang, Jiangxi, Xinjiang, Inner Mongolia, Gansu, Qinghai, Jilin, and Yunnan, with a total amount of RMB 570 billion. By the end of 2020, IB has invested RMB 478.211 billion in green financing. Moreover, IB worked together with financial institutions in Fujian Province to launch the Action Initiative of Fujian Financial Industry for Multi-Party Co-Governance of Ecological Environment, actively explored the mode of fulfilling corporate social responsibility through financial support to the ecological environment governance, and innovated a new model of multi-party cooperation in ecological environment governance.
In line with the latest international sustainable development trend, IB has signed the United Nations Sustainable Blue Economy Finance Initiative, becoming the first Chinese banking signatory institution, benchmarked the Equator Principles (Fourth Edition) and the latest implementation guidelines issued by the Equator Association, fully considered the relevant requirements of the United Nations Sustainable Development Goals (SDGs), The Paris Agreement (on Climate Change), the Task Force on Climate-related Financial Disclosures (TCFD), and further enhanced the innovative practice capability of sustainable finance. By the end of 2020, IB has carried out a total of 1,294 projects to judge the applicability of the Equator Principles, of which a total of 621 projects applied the Equator Principles, involving a total investment of RMB 2,916.144 billion.
At present, carbon neutrality has become an important strategic goal of national development. In line with the vision of building “A first-rate bank,A long flourishing IB”, IB is actively promoting the evolution of a green financial group into an ESG group. On the basis of maintaining the advantages of EPFI and green finance, benchmarking the international mainstream ESG evaluation system to improve its ESG governance structure, mechanism and process, strengthening the application of ESG concepts in risk management and product innovation, improving its ESG ratings and becoming a leader in green finance and ESG industry.
Promoting the “IB Cares” brand and providing financial service with love
To provide financial services with love, IB continues to develop its “IB Cares” brand and further improves the three-in-one long-term charity mechanism of “donation for education”, “disaster relief” and “poverty alleviation”. In 2020, IB donated RMB 109,287,100 for public interest and charity purposes. As of the end of 2020, and in terms of donation for education, IB funded poor college students from 5 universities for a total of 6,000 persons/times with the amount of more than RMB 29.5 million. the “IB Cares Charity Stipend for Education”.
In 2020, the final year of poverty alleviation in China, IB insisted on the measures of both support and self-capacity development, developed the “five poverty alleviation systems”, i.e., industrial poverty alleviation, multi-channel poverty alleviation, product poverty alleviation, targeted poverty alleviation and education poverty alleviation in a coordinated manner, and explored to form a sustainable financial poverty alleviation model with its own characteristics and proven effectiveness so as to promote effective connection between poverty alleviation and rural revitalization continuously. IB has helped poverty-stricken areas to overcome poverty by combining the allocation of funds with the dispatch of officials, combining the construction of infrastructure and livelihood projects with the support of industrial development, and combining work-linked assistance with voluntary staff participation. It coordinated the work to provide regular help in certain areas linked to each branch such as the deeply impoverished areas and concentrated contiguous poverty-stricken areas, and dispatched 40 poverty-alleviation officials to the 51 linked sites. And all of the areas have shaked off the poverty situation by April 2020. By the end of 2020, IB’s balance of targeted poverty alleviation financial loans reached RMB 16.668 billion .
Facing the Covid-19 epidemic in China and following the instructions, IB immediately made generous donations, both monetary and in-kind, to help Wuhan, and introduced a series of targeted measures extended to all parts of mainland China, such as tilt funding preference, fee reductions, and postponed loan repayment, to coordinate the epidemic prevention and control and financial services for economic and social development. By the end of 2020, IB has donated more than RMB 60 million for epidemic prevention and control, provided RMB 84.9 billion of credit to enterprises in the relevant industry, added a total of RMB 40.713 billion of credit to 1,242 small and medium-sized enterprises related to epidemic prevention and control, reduced or exempted customers the handling fees for more than RMB 3 billion, handled the phased deferred repayment of principal and interest for 9,440 small and micro enterprises at the amount of RMB 12 billion, and underwrote the debt of epidemic prevention and control for more than RMB 18 billion.
With its outstanding CSR performance, IB has been ranked at A in the MSCI ESG rating, maintaining the highest rating among domestic banks, and has won 15 social responsibility awards from the China Banking Association and Finance Asia.