China Net Finance, August 26 (Reporter Wang Jinrui) 2022 is a critical year for the implementation of the “14th Five-Year Plan” and the goals of carbon peaking and carbon neutrality. This year’s “Government Work Report” proposes to continuously improve the ecological environment and promote green and low-carbon development. As the core of contemporary economic development, finance plays a pivotal role in the process of economic green transformation and green development. Supporting green development is one of the important tasks of financial institutions in recent years.
Recently, Wang Jingwu, vice president of ICBC, said in an interview with a reporter from China.com.cn: “In recent years, ICBC has always adhered to the responsibility of a big bank and the responsibility of a big bank, and insisted on leading the development of green finance with innovation. We will continue to improve the development system of green finance, always stand at the forefront of the wave of innovation and development of green finance at home and abroad, and continue to play a leading role as a major bank.”
Data shows that by the end of June 2022, the balance of ICBC green loans exceeded 3 trillion yuan, and the balance of green bond investment, green non-standard agency investment, and green lease financing exceeded 500 billion yuan. All major indicators of green investment and financing are in the market. leading position.
Continuously improve the green finance development system
Green finance is an important means to empower green development and help achieve carbon peaking and carbon neutrality. It is also an inevitable choice to achieve high-quality development of the financial industry. Under the guidance of carbon peaking and carbon neutrality goals, more and more financial institutions are actively exploring the reform and innovation of green finance and creating characteristic brands of green finance.
As a large state-owned bank, ICBC adheres to the concept of green development, integrates the development requirements of green finance into development strategies and other aspects, and has established a relatively complete green finance development system, effectively playing a leading role in the development of green finance. Wang Jingwu told the China Net Finance reporter that ICBC mainly keeps upright and innovated in terms of policies and systems, products and services, risk management, and cutting-edge research, and constantly improves and perfects the green finance development system.
First, innovate policy and institutional arrangements, and establish a comprehensive and complete green financial guarantee system. ICBC integrates green finance into all aspects of financial services and operation management, highlights the “green” orientation in its investment and financing policies, adjusts its credit distribution in a forward-looking manner, and allocates credit resources rationally. In the industry dimension, key areas such as clean energy, green transportation, energy conservation and environmental protection are positioned as industries that actively or moderately enter the industry, supporting differentiated policies such as economic capital occupation, authorization, pricing, and scale; in the customer dimension, corporate technology, environmental protection, Indicators such as energy consumption are embedded in the selection criteria of customers and projects in key industries. Continue to strengthen investment and financing management in environmentally sensitive fields, and actively support industrial transformation and upgrading through financial means.
Second, innovate service means and create a rich and flexible green financial product system. ICBC has issued a total of 7 overseas green bonds with a total amount of more than 15 billion US dollars. Among them, the global multi-currency “carbon neutral” theme overseas green bonds issued in 2021 set the largest green bond issuance scale by Chinese issuers; in June this year , ICBC successfully issued the first domestic carbon-neutral green financial bond for a commercial bank, and it is also the first domestic green bond citing the China-EU Common Classification of Sustainable Finance Goals. ICBC launched the first batch of investment and financing services for innovative bond types such as carbon neutral bonds and sustainable development-linked bonds, and launched the market’s first ESG-themed ETF fund and the first green finance-themed wealth management product. ICBC also cooperated with China Central Depository & Clearing Co., Ltd. to release the “ChinaBond-ICBC Green Bond Index”, which is the first in the industry to be tracked and replicated based on the latest market standards, providing convenience for domestic and foreign investors to understand and invest in my country’s green bond market. channels and references.
Third, innovate the intelligent risk control mechanism and build a whole-process environmental, social and governance (ESG) risk prevention and control system. In this regard, ICBC has created several firsts in the industry. First, it pioneered the classified management of green investment and financing in the industry. According to the ESG risk level, investment and financing customers are divided into “four levels and twelve categories”, and differentiated management policies are implemented. Second, it is the first in the industry to establish an intelligent management and control mechanism for ESG risks. By cooperating with third-party environmental data providers and using enterprise multi-dimensional big data information, it has achieved real-time access to enterprise environmental information and automated system risk alerts throughout the business process. Third, ICBC recently issued the first green guide for investment and financing among domestic peers, which provides rich operational guidelines for ESG risk prevention and control in investment and financing business, which is another milestone in ICBC ESG risk management. In addition, in response to climate risks, ICBC incorporates climate risks into its comprehensive risk management system, actively conducts climate risk stress tests, and proactively explores the identification, assessment, monitoring and control of climate risks. We are also exploring the establishment of a carbon accounting system for investment and financing, and in-depth research on investment and financing carbon emissions measurement methods to provide important support for measuring and managing climate risks.
Fourth, innovate cutting-edge research and establish a collaborative green finance research system. ICBC took the lead in publishing the environmental risk stress test results among domestic peers, and was one of the first financial institutions in the world to carry out environmental risk stress test research. The ESG Index and the “Belt and Road” Green Finance (Investment) Index were released to provide methods for quantifying environmental risks in the global financial industry. ICBC, under the entrustment and guidance of the People’s Bank of China and the Green Finance Professional Committee of the China Society for Finance and Banking, promoted the China-UK environmental information disclosure pilot project, and took the lead in drafting the “Guidelines for Financial Institutions’ Environmental Information Disclosure”, which was officially released by the People’s Bank of China as an industry standard; and Relevant institutions jointly developed an online tool for climate and environmental risk analysis to provide support for financial institutions along the “Belt and Road” to manage environmental risks.
Increase the intensity of green credit
With the goal of carbon peaking and carbon neutrality being put forward, banking institutions have increased their investment in green credit, actively supported green and low-carbon transformation, and promoted the development of green industries with green finance.
According to Wang Jingwu, in recent years, the Industrial and Commercial Bank of China has continued to increase its green credit issuance, issued a series of incentive and safeguard measures, and comprehensively used economic capital occupation, capital pricing, performance assessment, special scale allocation and other means to promote green credit issuance, and achieved remarkable results. effectiveness. The growth rate of the bank’s green loans continued to be higher than the growth rate of various loans, and the scale and increment of green loans were leading the industry.
Specifically, the first is to implement differentiated credit policies and economic capital adjustment. Position the main fields of green industry as active entry or moderate entry industries, lower the economic capital occupation coefficient, and match differentiated credit policies such as authorization.
The second is to fully implement internal fund transfer price (FTP) incentives for green loans. In addition, it actively promoted the implementation of the People’s Bank of China’s carbon emission reduction support tool and the special re-lending policy for clean and efficient utilization of coal, and formulated corresponding FTP preferential policies for both types of loans.
The third is to optimize the assessment mechanism. Incorporate green finance development indicators such as green credit growth and product innovation into the performance evaluation indicator system for branches, and give full play to the role of the “baton” in evaluation by increasing the proportion of evaluation scores and expanding the difference in the score.
The fourth is to formulate an annual green loan investment plan. Arrange a special scale of green loans, and give priority to guaranteeing credit for green industries.
At the same time, ESG risk control is also an important part of green finance work. Strengthening ESG risk control is of great significance to guide more credit resources to be invested in green industries and promote the healthy and sustainable development of green finance.
In terms of ESG risk management and control, ICBC’s specific practices include: First, comprehensively implement green classification management of investment and financing. According to the “green” degree of investment and financing, that is, the degree of impact of investment and financing on the environment and the ESG risks it faces, investment and financing are divided into four levels and twelve categories, and differentiated investment and financing policy management is implemented, and the coverage is determined by loan It has gradually expanded to various investment and financing businesses such as bonds, wealth management, leasing, and insurance.
The second is to formulate green guidelines for investment and financing. By clarifying the key points of ESG risk identification, minimum access standards, excellent standards, and green investment areas, the effectiveness and pertinence of ESG risk prevention and control can be effectively improved. The guideline formulates general requirements for ESG risk identification and prevention applicable to all industries from eight aspects, including environmental pollution prevention and control, climate change response, biodiversity protection, safe production and occupational health. Industry-specific green guidelines have been formulated respectively.
The third is to strengthen the risk management of environmentally sensitive industries. Reasonably control the financing of environmentally sensitive industries, increase the requirements for key indicators such as enterprise process, energy consumption, technology, environmental protection, etc., and withdraw from the financing of enterprises with high ESG risks in a forward-looking manner. In particular, strict investment and financing management and control regulations have been formulated for industries involving heavy metal emissions.
Fourth, strengthen the whole-process management of green finance. Embed ESG risk management and control into all aspects of investment and financing business processes such as due diligence, review and approval, contract signing, fund disbursement, and post-loan investment management, and use big data systems to dynamically monitor relevant risks and carry out early warning and control, effectively improving risks. The timeliness and accuracy of control.
Continue to contribute ICBC’s wisdom and strength
“For a long time, ICBC has always adhered to the unity of economic responsibility and social responsibility, and is committed to building a world-leading green bank and becoming a green bank with a good international reputation.” Wang Jingwu further said about how to plan the layout of green finance in the next step, During the “14th Five-Year Plan” period, my country’s ecological civilization construction has entered a critical period with carbon reduction as the key strategic direction, which has put forward new and higher requirements for the green and low-carbon transformation of commercial banks. Facing the major strategic transformation of economic and social development, ICBC will fully, accurately and comprehensively implement the new development concept, and continue to contribute ICBC’s wisdom and strength to the promotion of green finance from five aspects.
First, scientifically create a transformation path, and orderly promote the green and low-carbon transformation of investment and financing. Overall consideration should be given to the relationship between the green and low-carbon transformation of investment and financing and energy security, industrial chain supply chain security, food security, normal life of the people and financial stability, and properly handle the relationship between development and emission reduction, overall and local, short-term and medium-term, and the national The internal requirements of the dual carbon goals are consistent, to prevent “one size fits all” and “movement-style” carbon reduction, and to avoid causing systemic financial risks.
The second is to use the power of financial technology to empower the green financial management model. With the help of new technologies such as big data, Internet of Things, artificial intelligence, etc., build an intelligent collection system for green financial information, develop intelligent identification and classification methods for green business, optimize and upgrade the ESG risk management system, and actively explore investment and financing carbon accounting, ecological protection red line maps, climate In new areas such as risk identification, the level of systematization, automation and intelligence of green financial management has been continuously improved.
The third is to intensify innovation and exploration and enrich the product and service system. Comprehensive use of “loan + debt + stock + agency + rent + customer” full-scale financing means to create a more multi-level, diversified and full-chain financial service system. Research new models and formats of green finance and climate investment and financing, and provide more distinctive green finance innovative products and services. Explore low-carbon transformation services for customers, customize transformation plans for customers according to their differentiated capital needs for low-carbon transformation, and assist high-carbon customers to gradually reduce carbon with comprehensive financial services.
The fourth is to internalize the concept of green development and continuously improve its own performance. Actively advocate green office, green operation, green procurement, green travel, internalize energy conservation and emission reduction into basic concepts and conscious actions, improve green and low-carbon operation models, establish and improve internal carbon management and energy management systems, and explore and drive the interests of suppliers Stakeholders practice the concept of low-carbon environmental protection.
Fifth, participate in international cooperation in green finance and build consensus on green development. Actively participate in the formulation of relevant standards for green finance, climate investment and financing, and environmental information disclosure, deepen international cooperation and dialogue in the field of green finance, and work with global counterparts on issues such as addressing climate change and maintaining biodiversity. Standard exchange, experience sharing, capacity building and other methods will jointly contribute to global green development.
(Editor in charge: Zhang Ziyi)
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