Kang Yukun, vice president of IB, meets with Mr. Paul Smith, Chief Risk Officer of the South Africa Standard Bank Group Ltd. The two share experiences in the implementation of sustainable finance and the Equator Principles

June 2010, Kang Yukun, vice president of the Industrial Bank meeting with Mr. Paul Smith,
Chief Risk Officer of the South Africa Standard Bank Group

In order to learn more about the advanced experiences and operation modes of outstanding Equator Banks in sustainable finance and environmental and social risk management in new emerging markets, and in a bid to deepen cooperation with other banks worldwide, Kang Yukun, vice president of the Industrial Bank, lead a delegation to the South Africa Standard Bank in June 2010. During the meeting, Kang Yukun exchanged views on the implementation of sustainable finance and the Equator Principles with Mr. Paul Smith, the Chief Risk Officer of the South Africa Standard Bank Group.

The South Africa Standard Bank is the largest bank in Africa, and has a 150 year history. Since 1998, the South Africa Standard Bank has established a network in Africa through new establishments and acquisitions. Its total assets now stand at around 162 billion dollars, with its assets and profits currently topping all other African banks. At present, the Standard Bank operates 1,051 branches in the major financial centers of 33 countries covering 5 continents. Its scope of business covers retail banking, corporate and investment banking and life insurance. Since 2007, the South Africa Standard Bank began an initiative to study the Equator Principles, and gradually established an internal management system and training mechanism in this regard. In December 2008, the board of directors of the South Africa Standard Bank approved the adoption of the Equator Principles. The bank followed by making a public commitment to the Equator Principles in January 2009.Currently, the South Africa Standard Bank is the first African bank to sit on the Equator Principles Executive Committee. In addition to this, it is also the secretary bank of the Africa and Middle East region and a member of the “Climate Change” and “Applicable Scope Study” working groups. The South Africa Standard Bank is a first-rate emerging market Equator Bank.

During the meeting, the discussions of the two parties covered four major themes, namely the Equator Principles, environmental and social risk management, project financing and financial cooperation. The South Africa Standard Bank gave a detailed description of its sustainable management system, which is based upon South Africa’s unique national conditions. The mode comprises of the three “bottom lines” of environment, society and economy and the “five capitals” of economy, manufacturing, society, humans and nature, and emphasizes the gap between the rich and the poor, Aids, energy deficiency (pollution caused by thermal power generation and water concerns), garbage disposal, wetland protection, floods, forest protection and other sustainable development focuses. The system is characterized by its level of advancement in life-cycle management and systemization. In terms of the implementation of the Equator Principles, the South Africa Standard Bank shares the same approach as the Industrial Bank. Both sides introduced their implementation systems for the Equator Principles and their practices and experiences in regard to approval procedures. Wherein, the South Africa Standard Bank’s views and practices of emphasizing the design of systemization tools and the training of grassroots level staff are of high relevance to the Industrial Bank, and are able to help the bank in the implementation of the Equator Principles.

The visit to South Africa produced genuine results. The two parties exchanged experiences in the implementation of the Equator Principles and the promotion of sustainable finance, and deepened mutual understanding in the process. The results gained from these discussions will prove to be a valuable source of reference as the Industrial Bank continues to promote sustainable finance.