On Jun. 27th, sponsored by the National Development and Reform Commission (NDRC), the 12th session of Policy Committee Conference of the International Partnership for Energy Efficiency Cooperation (IPEEC) was held in Beijing. At the conference, Santiago Creuheras, the co-president of IPEEC and head of the Department of Energy Efficiency and Sustainability in Mexico, introduced a very important proposal “Statement by Financial Institutions on Energy Efficiency”, which was initiated by the working group of the financial energy efficiency of the G20 summit. As the first equator bank in china, Industrial Bank became the first domestic financial institution to sign the statement on November 2015.
The “Statement by Financial Institutions on Energy Efficiency” is a non-mandatory statement and commitment initiated by the European Bank for Reconstruction and Development (EBRD) and the United Nations Environment Programme Finance Initiative (UNEP FI). In 2013, the G20 summit set up the working group of financial energy efficiencyand actively promoted financial institutions to join the statement.
According to Santiago Creuheras, currently more than 150 financial institutions have joined the statement. As the chairman nation of this year's G20 summit, financial institutions in China made an active response. Following the Industrial Bank, ICBC and Bank of Jiangsu have joined the statement and some others are considering, which shows financial institutions in China are dedicated to practicing green finance and promoting the development of energy efficiency.
The commitments made by the institutions that join the statement are: providing relative support for the clients on financial energy efficiency; actively enlarging the scale of financial energy efficiency; incorporating the investment philosophy of promoting energy efficiency into their partnership with the clients; sharing experience, and learning the successful business strategy of bringing the concept of energy efficiency into finance; cooperating with institutional and public investors to provide financial services to cope issues such as climate changes.
Improving energy efficiency plays a very important role in facing the challenge of climate changes. According to the estimate of IEA, to achieve the goal of limiting the rise of global average temperature within 2℃ and reducing the emission of greenhouse gases by 50%, improving energy efficiency is very important. In order to double the improvement rate of energy efficiency worldwide in 2030, an annual investment of 560 billion dollars would be required, versus the current investment of 130 billion dollars, reflecting a serious lack of investment and potential market opportunities.
In the meantime, under the policy guidance and support of the oversight authorities, such as “Guide on Green Credit” and “Guide on Green Credit of Energy Efficiency”, domestic financing institutions start to promote the development of green finance, and improve their financial services in the green economy including energy saving and environment conservation.
On December 7th, 2015, the Energy Day of the United Nations Conference on Climate Change in Paris, Industrial Bank, alongside with more than 100 banks, was listed on the “Statement by Financial Institutions on Energy Efficiency”.
Fang Zhiyong, the General Manager of the Department of Environment Finance of the Industrial Bank, said, “for commercial banks, green finance serves both the business interest and the need to perform social responsibilities. After 10 years of exploration and development, the green finance in the Industrial Bank has totally lived up to the standard issued by the statement, and even surpassed it in some aspects.
Since pioneering its products of financial energy efficiency in 2006, Industrial Bank has been committed to the philosophy of “obtaining reasonable profits while bringing benefits to the stakeholders” and continued its innovation. It has built up a comprehensive service system with a variety of green products, which include green financing, green leasing, green trust, green fund, green investment and green consumptions. It advocates the concept of green finance, pioneers the practice of the green finance service and blazes a trail of sustainable development with unique characteristics.
Data showed that, by the end of the first quarter, CIB has provided green finance of over 850 billion yuan for more than 6000 companies, with financing balance of more than 400 billion yuan. Those projects supported by the environmental finance can reduce the annual use of standard coal by 25.5386 million ton and the annual emission of carbon dioxide by 71.6199 million ton and chemical oxygen demand （COD） by 1.3874 million ton. Meanwhile the annual comprehensive utilization of solid waste can reach 17.2904 million ton and they also save water of 285.6506 million ton annually, which equals the effect of closing 164 100 MW thermal power stations and the non-use of 100 thousand taxis for 34 years.