Hebei Evaluates the Results of Green Credit

On 27 July 2009, the Shijiazhuang Central Branch of the People's Bank of China, the Hebei Banking Regulatory Commission and the Environmental Protection Department of Hebei Province held a joint press conference to release the Measures for Evaluating Effect of Green Credit Policies in Hebei Province (Interim) (hereinafter referred to the “Measures”) which promotes mark deduction for credit regulation and highlights the “one-vote-down” system in the review and approval of green environmental protection projects. Moreover, the Measures will grade all banking and financial institutions that grant loans within Hebei Province for their execution of green credit policies. Such financial institutions rated as unqualified will be given a notice of criticism and required to take remedial action within a prescribed time frame.

Green loans ensure the sound development of the economy

It has been reported that the Measures includes six chapters, and specifies the whole process of evaluating the executive results of policies in regard to type of organization, scope of evaluation, mode of evaluation, rewards and punishment. The Measures require all financial institutions to adhere to the principle of adopting different approaches in different situations and encouraging the growth of certain sectors while discouraging the expansion of others, allocate credit resources in a proper way, continuously regulate and optimize loan structures, and provide green loans, green financial products and green financial services.

“This is further a further enhancement of green credit policies,” said Zhao Genxi, Director of the Policy and Law Department of the Environmental Protection Department of Hebei Province, “the launch of the ‘Measures’ will play an active role in promoting the organic combination of industrial policies and credit policies, pushing on the effective implementation of energy-saving and environmental policies, accelerating energy-saving and emission reduction steps and supporting economic structure adjustment and the conversion of the development mode of the province.”

Shao Yanjin, Vice President of the Shijiazhuang Central Branch of the People's Bank of China expressed that since the launch of green credit policies in 2007, financial institutions in Hebei Province have continuously regulated and optimized loan structures, taken green credit as the prime condition for granting credit, established a "black list” of polluting enterprises, stopped and compressed loans to polluting enterprises and increased the percentage of “green loans” and loan quality. “Implementation of green credit policies has provided a driving force for the optimization and upgrading of the economic structure in Hebei and greatly boosted the comprehensive and sound development of environmental protection, communities and the economy of Hebei Province.”

Unqualified credit institutions will be given a notice of criticism

Wang Xiaojiang, Secretary of the Working Committee of Environmental Protection and Finance of Hebei Environmental Protection Association stated that prior to the launch of the Measures there was no platform for cooperation between environmental protection departments and financial institutions during the execution of green financial policies, which led to a situation in which the obligations, rights and interests of environmental protection and financial works were separated. Management was vacant and green finance policies could not be implemented in fact. The launch of the measures for evaluating the results of green credit policies has addressed this problem.

The new measures stipulates that the group leader and vice leaders of the evaluating leadership group will be acted by principals of the Shijiazhuang Central Branch of the People’s Bank of China, Hebei Banking Regulatory Commission and the Environmental Protection Department of Hebei Province, and members will be principals of all banking and financial institutions for the organization and coordination of the evaluation.

The final results of evaluation will be published in news media by the Shijiazhuang Central Branch of the People’s Bank of China, Hebei Banking Regulatory Commission and the Environmental Protection Department of Hebei Province and submitted to the superior administrative departments and the Government of Hebei Province.

The Measures also stipulate that banking and financial institutions that are evaluated as excellent will be awarded “Excellent Units for Green Credit” together with certain rewards by the Shijiazhuang Central Branch of the People’s Bank of China, Hebei Banking Regulatory Commission and the Environmental Protection Department of Hebei Province; those that are deemed as being unqualified will given a notice of criticism and required to take remedial action within a prescribed time limit; those that operate innovative business and achieve prominent work results will be publicized and recommended to others, and reported to the superior administrative departments and the Government of Hebei Province.

Executive effects to be rated by comprehensive marks

In addition, in the interests of further promoting the effective execution of green credit, the Measures also stipulate that under the leadership of the evaluation leadership group, the five methods of self evaluation, check evaluation, social evaluation, news media evaluation and online evaluation will be taken to evaluate and grade the financial institutions for the results of green credit. A comprehensive evaluation will be conducted on financial institutions for the results of green credit every two years. Scores are out of 100. Financial institutions over 90 are deemed as excellent units, those with 80-90 are good units, those with 70-80 are qualified units and those under 70 are deemed as unqualified units. While being reported to financial institutions, the evaluation results will be taken as the important basis for examining and rewarding the financial institutions.

The Measures stipulates that any institution will be solely responsible for being degraded if it fails to provide information as required; any institution which gives false information and/or hides the truth in order to obtain a high mark will be revoked of its original rating and re-evaluated; any institution which is involved in serious adverse events will be deemed unqualified immediately.

Meanwhile, in order to improve the operability of the Measures and further specify the indicators therein, the Government of Hebei Province has also studied and stipulated the Table of Evaluating Effects of Green Credit Policies of Hebei Province, which promotes mark deduction for credit regulation for the first time, highlights the “one-vote-down” system in the review and approval of green environmental protection projects and intensifies the environmental protection consciousness of all financial institutions. (Source: China Environment News)