The “green storm” pursuing environment-friendly and sustainable development models is becoming increasingly strong and changes the behaviors of government, enterprises and individuals in a profound way. It attracts great attention how finance, as the core of modern economic system, guides the investment of social resources and boosts the sustainable development of economy, society and environment in a coordinated manner.
Fujian is a big ecological province in China and the origin of domestic “green finance”. Green finance sprang up in the end of 1990s, marked by the birth of “Equator Principles” -- a range of voluntary benchmarks for the financial industry to manage environmental and social risks in project financing activities. Since becoming the first bank and the only one in China up to now adopting the “Equator Principles” in 2008, Industrial Bank (IB), a national commercial bank based in Fujian, has drawn on the advanced ideas and models of the “Equator Principles”, brought into full play its specialized advantages, made constant innovation, and dug deep into green finance to lend full support for the building of an ecological Fujian. Meanwhile, the bank has also led the development of green finance in the Chinese banking industry all the way.
By the end of 2014, IB has examined the applicability of 157 projects to the “Equator Principles” across Fujian, involving a total project investment around RMB 245 billion. Meanwhile, it has granted 1,341 green finance based loans across the province, with the value totaling RMB 23.587 billion.
Making China more beautiful and “obtaining reasonable profits while bringing benefits to the stakeholders”
If an enterprise chooses the green and sustainable development road, this means that it chooses a kind of social responsibility, environmental ethics and civilization mode.
After the IPO of IB in 2007, the Board of Directors of the bank began to actively consider the relationship between the performance of social responsibilities and its own sustainable development, exploring innovation in the business model to perform its social responsibilities. IB innovatively put forward the concept of social responsibility performance of “obtaining reasonable profits while bringing benefits to the stakeholders” to support the sustainable development of society, economy and environment by providing extensive green financial products and services, and covered into the corporate philosophy of sustainable development to “implement the Scientific Outlook on Development, further understanding to the relationship between the social responsibilities of a bank and its own sustainable development, actively explore ways to push forward the performance of social responsibilities as a bank, and form a situation where human can live in harmony with the nature, environment and society”.
Under the guidance of this concept, IB has established its strategy for the development of green finance from different perspectives in a number of areas such as management of environmental and social risks, innovation in green financial products and services and building of green financial brands, and deepened and enforced the strategy in the areas including rules and regulations, organizational structure, business flow, product innovation, etc. At present, IB has realized specialized operation of green finance and established environment finance centers in 33 Level 1 branches across China, with the largest professional team of green finance in China, which consists of nearly 200 members. Meanwhile, the bank has kept pushing forward innovation in such areas as green finance based financing, emission right financial service, and green financial service for individuals, and established a system of rich green financial products and services covering both enterprises and individuals, creating many “No. 1” cases in the industry: the first one launching integrated carbon finance service, the first low-carbon credit card, the first emission rights pledge-based loan; the first carbon assets pledged loan, the first product for providing special financing services for energy conservation and emission reduction of SMEs in the underdeveloped areas, the first bank offering comprehensive solutions for utilization and protection of water resources, the first bank launching the agency account opening system for carbon trading based on the banking system, and the first issue of green finance credit asset-backed securities…
By the end of 2014, IB has accumulatively extended RMB 555.8 billion green finance based financing to around a thousand enterprises, with financing balance of green finance hitting RMB 296 billion. The projects supported with such funds can help save 23.52 million tons of coal equivalents across China, reduce 68.8 million tons of carbon dioxide and 1.23 million tons of chemical oxygen demand (COD), utilize 17.11 million tons of solid wastes in an integrated manner, and save 262.29 million tons of water each year. It has examined the applicability of 854 financing projects to the “Equator Principles”, involving a total project investment around RMB 2,123.421 billion. Of them, 217 were applicable to the financing based on the Equator Principles, involving a total project investment of RMB 426.486 billion.
As the bank getting involved in the domestic emission rights trade markets at the earliest time, IB officially released the “business of emission rights pledged credit” in 2012, recognizing the guarantee method to pledge emission rights for financing of enterprises. The business can help enterprises to activate their emission right assets and mobilize their enthusiasm to manage their emission right assets and participate in the emission rights trading market. Now IB has signed cooperation agreements with 9 of the 11 state-level pilot provinces and municipalities for emission rights trading in China, providing professional financial services such as consulting for the design of emission right trading regulations, development of emission right trading and settlement systems, emission rights pledged credit, and financing for projects reducing the emission of pollutants. In this way, the bank boosts the building of emission rights trading market in Chine with the power of finance.
An affectional tie to Fujian with lucid waters
As the forerunner of green finance in China, IB provides a whole set of ideas, methods and tools for green finance in reference to the “Equator Principles”, establishing an all-round system for environmental and social risks. At the decision-making layer, for instance, IB’s board of directors and management team has established the “Equator Principles Work Leading Group”; at the institutional layer, the bank has issued a range of policies for the management of environmental and social risks in succession; and at the layer of capability building, it has intensified the building of internal capability and carried out a variety of training programs, popularizing the knowledge of sustainable finance thoroughly across the entire bank. In the meantime, based on the “Equator Principles”, the bank has helped enterprises to manage and prevent environmental and social risks consciously, achieving social and environmental benefits while obtaining economic benefits.
By the end of 2014, IB has examined the applicability of 157 projects to the Equator Principles across Fujian, with a total amount of project investment up to about RMB 245 billion.
Meanwhile, as the leading financial enterprise in Fujian, IB brings into play its advantages in technologies and resources to lend full support to the building of an ecological Fujian. By the end of 2014, IB has granted 1,341 green finance based loans, totaling RMB 23.587 billion, to cities of Fujian, such as Fuzhou, Xiamen, Quanzhou, Zhangzhou, Sanming, Longyan, Nanping, Ningde, and Putian, with the balance of loan hitting RMB 11.171 billion. The supported projects cover utilization and protection of water resources, new energy and renewable energy projects (e.g., wind power and hydropower), energy conservation project of electric machine system, clean and efficient utilization of coal, resource recycling, production of energy-conserving and environment-friendly equipment, desulfurization and denitration, etc. It is estimated that such projects can annually save 3.9725 million tons of coal equivalents across Fujian Province, reduce 10.2904 million tons of carbon dioxide and 48,900 tons of chemical oxygen demand (COD), 1,500 tons of ammonia nitrogen, 13,700 tons of sulfur dioxide, and 6,400 tons of oxynitride, and utilize 93,000 tons of solid waste.
Spreading green and singing niceness
Over the past nine years, IB has made great efforts in developing “green finance”, preaching the concept in China and exchanging ideas overseas. Green finance has become a golden business card of IB.
Internally, IB has actively pushed forward green business operation and built a green corporate culture. For instance, it actively promotes low-card office work, calls on employees to lead a low-carbon life, and implement green procurement. In addition, it advocates employees to purchase carbon emission reduction index with low-carbon credit cards to offset their own carbon footprints. Externally, IB has intensified communication and spread green experience in an active way. Over these years, IB has carried out extensive exchange and cooperation in respect of green finance and the Equator Principles with international institutions such as World Bank (WB), International Finance Corporation (IFC), and World Wide Fund for Nature (WWF), financial institutions such as Citibank and Barclays Bank, and many national ministries and commissions, local governments and academic institutions. The bank has built up a green finance brand supported by corporate culture by way of spreading knowledge on the business of green finance, sharing experience and participating in policy formulation.
Through building the green finance brand in a constant way, the “Equator Bank” and “green finance” have become the characteristic brands and the most eye-catching business cards of IB. The bank has won the “Champion of Asian Sustainable Bank” jointly appraised by the British magazine Financial Times and International Finance Corporation (IFC) and is the only financial enterprise winning the sustainable bank prize in China up to now. In addition, it has also won the “Carbon-value Social Citizen Award” of the 5th World Economic and Environmental Conference and been honored the “National Collective Role Model for Emission Reduction” for the “11th Five-year Planning” period jointly conferred by four ministries and commissions including the National Development and Reform Commission (NDRC) and the Ministry of Environmental Protection (MEP). Moreover, it has won a number of honors appraised by authoritative institutions and mainstream media, such as the “Best Green Bank”, “Best Sustainable Bank”, “Low-carbon Pioneer Enterprise” and “Outstanding Nature Protection Supporter”.
Just as stated by the slogan of IB, “build Beautiful China jointly with green finance”, the bank, as the forerunner in China's green finance, will uphold the strategy of sustainable development in a steadfast manner and adhere to the development path of green finance uncompromisingly. While devoting itself to attracting professionals, focusing on special areas based on the competitive edges established in green finance, it will make constant innovation and build itself into an all-course professional financial service supplier covering a wide range and an all-sided “green bank” in China’s green finance market, singing the highest pitch of “Beautiful China”.