Recently, the Ministry of Human Resources and Social Security (MOHRSS), the National Development and Reform Commission (NDRC), the Ministry of Environmental Protection (MEP) and the Ministry of Finance (MOF) jointly commended the national collective and individual role models for emission reduction during the “11th Five-year Planning” period. With its outstanding performance in energy conservation and emission reduction, Industrial Bank (IB) was conferred the title of “National Collective Role Model for Emission Reduction”, becoming the only commercial bank receiving the honor.
As learnt by the reporter, the four ministries jointly conferred the honorary title of “National Collective and Individual Role Models for Emission Reduction” during the “11th Five-year Planning” period this time, aiming to commend personnel and entities with outstanding performance, set models and further drive the development of energy conservation and emission reduction across China, so as to ensure the fulfillment of the energy conservation and emission reduction objectives of the “12th Five-year Planning” period.
In recent years, it has become a general consensus of all social circles to promote energy conservation, emission reduction, and sustainable development. In 2006, the beginning of the “11th Five-year Planning” period, China put forward the restrictive targets of lowering the energy consumption of each unit GDP by 20% and the total emission of main pollutants by 10%. In 2009, our country put forward again the objective of reducing the emission of carbon dioxide of each unit GPD in 2020 by 40-45% compared with that in 2005. At the 18th CPC National Congress, ecological civilization was also placed at an outstanding position.
In a recent interview with media, Gao Jianping, Board Chairman of IB indicated that green, energy conservation, environmental protection and sustainability are the essential and indispensable core ideas for the “Construction of Beautiful China” proposed in the 18th CPC National Congress. In the perspective, the concept of “green finance” that IB has advocated in recent years fully tallies with the core ideas of “Beautiful China”. As for the banking sector, he indicated, to adhere to the concept of “green finance” and develop green finance business vigorously is down-to-earth act to implement the strategic arrangement of the 18th CPC National Congress and serve the construction of “Beautiful China” by bringing into play the functional advantages of the sector.
As the first and only “Equator bank” in China, IB has actively responded to the country's call on the cause of energy conservation and emission reduction, starting its exploration and practice to support the development of the national campaign of energy conservation and emission reduction with green financial services. The bank, in collaboration with our partner International Finance Corporation (IFC), designed and developed energy conservation and emission reduction financing products in 2005, and released the first energy-efficient project financing product in China in 2006. It became the first Chinese bank releasing comprehensive carbon finance services in 2007, and announced to the public to adopt the “Equator Principles”, becoming the first Chinese “Equator bank” in 2008. In 2009, the bank established the Sustainable Finance Center, the first institution specialized in sustainable finance in China, and the first project compliant with the “Equator Principles” was implemented in Yong'an, Fujian. In 2010, IB issued the first low-carbon credit card in China, extending “green finance” from the field of enterprise project to personal consumption, and the first emission rights pledged loan was granted in Jiaxing. In 2011, it granted the first carbon assets pledged loan in China, and other innovative green credit products like emission rights pledged credit were also released in succession. In 2012, the Sustainable Finance Center of the bank was upgraded to the Sustainable Finance Department, a Class I department of the Head Office to plan the development of “green finance” businesses in an all-round way. In November 2012, the Bank and IFC launched their collaboration again regarding the third phase of energy conservation and emission reduction loan, offering the first product in China for providing special financing services for the energy conservation and emission reduction of SMEs in the underdeveloped areas.
IB has not only taken the lead to practice the energy conservation and emission reduction financing business among all Chinese financial institutions, but also incorporated the pursuit of harmonious unification of economy, society and environment into its own development objectives actively and established the corporate governance philosophy of sustainable development to “explore different ways to promote the bank to practice social responsibilities and build a good relationship where human being coexists with the nature, environment and society harmoniously”. Moreover, it has incorporated the philosophy into its business management concept and innovatively put forward the social responsibility outlook of “obtaining reasonable profits while bringing benefits to the stakeholders” to transmit and implant the concept of sustainable finance into such aspects as regulations and rules, organizational structure, business flow and product innovation.
As noted by the reporter, up to now, there have been 77 financial institutions that have announced to observe the Equator Principles, including HSBC, Citibank, Barclays Bank, Mizuho Corporate Bank, and the Standard Bank of South Africa, etc. around, the world. Yet, IB is still the only Equator bank in China. In accordance with the requirements of the Equator Principles, the bank has appraised and identified environmental and social risks of financing project, and screened out superior projects with the Equator Principles, a risk control tool widely adopted by international financial institutes to improve its capacity to control the environmental and social risks and alleviate or mitigate the environmental and social risks in projects, thus refining its system for controlling environmental and social risks.
Through pushing forward the implementation of the Equator Principles, IB has effectively guided domestic enterprises to identify the environmental and social risks that may be involved in projects and helped them to manage and prevent risks, lower operation cost, and enhance corporate competitiveness so that they could obtain not only economic benefits but also social and environmental benefits. In this way, the sustainability of commercial model and the performance of social responsibilities could both be achieved in an organic way. By now, the bank has examined the applicability of 727 projects against the Equator Principles, with a total amount of project investment up to RMB 1,007.7 billion. Specifically, 157 of them were approved as projects applicable to the Equator Principles, with a total project investment of RMB 218.9 billion.
In the process of practicing green finance actively, on the one hand, IB has reviewed the market and customer in a new perspective, adjusted the target customer and business structure on its own initiative, lending vigorous support to industries and projects related to low-carbon economy, recycling economy, ecological economy, and energy conservation and emission reduction, and supporting responsible corporate customers that have the awareness of sustainable development and combine business operation with performance of social responsibilities. On the other hand, it has carried out in-depth research in the fields related to green economy, energy conservation and emission reduction, providing professional green finance products and services through sustained innovation. In recent years, the bank has brought into play its leading advantages in the field of energy conservation and emission reduction financing, and based on the only institution specialized in sustainable finance in the Chinese banking industry, it has accumulatively provided nearly RMB 200 billion energy conservation and emission reduction based financing loans to over 1,000 enterprises with a variety of financial tools by way of specialized business operation and services.
At present, all branches of IB offer energy conservation and emission reduction financing service, involving a variety of projects such as improvement of energy efficiency, development and utilization of new energy and renewable energy, carbon emission reduction, sewage treatment and water area control, reduction of sulfur dioxide emission, and recycling of solid wastes, with significant effect of energy conservation and emission reduction. As estimated, by the end of 2012, the energy conservation and emission reduction projects supported by the bank could have saved 23.1603 million tons of standard coal across China each year, reduced 66.8347 million tons of carbon dioxide, 886,500 tons of chemical oxygen demand (COD), 15,100 tons of ammonia nitrogen, 43,600 tons of sulfur dioxide, and 6,900 tons of oxynitride, utilized 15.0129 million tons of solid waste in an integrated manner, and saved 255.7906 million tons of water.
With sustained innovation and bold attempt in the field of “green finance” in the latest seven years, IB has become the advocator of sustainable finance concept, the forerunner of green finance businesses, and the firm supporter of the national cause of energy conservation and emission reduction in China. In 2012, the bank was listed No.1 in the two green credit rankings released by ten non-governmental environmental protection organizations and the Ministry of Environmental Protection respectively. In addition, the bank has won a number of honors awarded by domestic and international authoritative institutions and media such as “Carbon-value Social Citizen Award”, “Corporate Social Responsibility Award for Best Green Finance”, “Best Green Bank Award”, and “Low-carbon Pioneer Enterprise Award”.
With the honorary title of “National Collective Role Model for Emission Reduction”, the state gave its full recognition to the bank in pushing forward the national cause of energy conservation and emission reduction during the “11th Five-year Planning” period. As believed by Chairman Gao, not only does IB hope to help the development of relevant industries by pushing green finance and allocating resources to drive energy conservation and environmental protection directly, but more to erect a banner for calling upon more banks and enterprises to assume their social responsibilities so as to build a “Beautiful China” characterized by the harmonious development of human beings and the nature, and of economy and environment.