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ICBC Starts in Full Gear to Become A Green Financial Institution
 

In recent years, ICBC places high priority on environmental protection, climatic change and pollution treatment. The first step for ICBC to carry out its social responsibility is to implement green loan program to support and promote a sustainable economy and social development. While taking part in efforts to save energy and reduce emissions, ICBC strives to be a resource-saving and environmentally friendly "green" bank. ICBC's total outstanding loans to green companies stand at RMB 590 billion as of today. The number of eco-friendly or eco-certified companies receiving ICBC loans and the loan balance are both over 99.9% among ICBC's all corporate clients and all loan balance, ranking No.1 in domestic league table.

Being the largest commercial bank in China, ICBC forges ahead "green credit" by incorporating the concept in credit culture, loan policies, management flow and product innovation, under a mechanism effective over the tong-term.

First, among the banks in China, ICBC acts first to establish the "green credit" concept as a long-term development strategy to build a world-class and leading green financial institution in the country. In September, 2007, ICBC was the first bank in China to promote green credit nationwide. In 2010, ICBC set forth the details, objectives and principles of green credit supported by management polices on the whole lending process. In 2011, ICBC refined the missions, principles and implementation of the green credit system for the near future from a strategic perspective, covering credit culture, classification management, polices, process management, product and service innovation, incentive scheme and capacity building.

Second, ICBC sets out "green credit" policies and systems as a key factor when extending loans to companies in different sectors and a guidance for all branches to make necessary "green adjustment". ICBC "green credit" policies state out the criteria of green loans and requirement of environmental risk management with respect to State environmental protection policies and industry characteristics. Since 2008, ICBC drew reference from the Equator Principles and IFC performance standard and guidelines to refine the classification criteria of green corporate loans, classify and manage the environmental risks of corporate clients in all branches. Based on this, ICBC establishes a system to monitor the risk of all green loans, enforce compliance operation and promote the steady operation of ICBC loan business. At present, all ICBC corporate loans are classified into 12 categories under 4 levels, according to green credit criteria. The 4 levels are Friendly, Pass, Observation, Correction. 12 categories: Friendly I (ecological protection), Friendly II (clean energy), Friendly III (energy-savings, emission-reduction), Friendly IV (resource utilization), Pass I, Pass II, Pass III, Observation I, Observation II, Correction I, Correction II and Correction III. Each ICBC corporate loan is judged whether it is "green" in accordance with green credit classification so that ICBC loans are released to eco-friendly or eco-certified companies.

Third, ICBC steps up the risk control organization review and management on green loans. Management requirements are drawn up on the monitoring, identification, control and mitigation of environmental and social risk in each process and step. Criteria and procedures are also lined up for approval of green loans. ICBC has a strict policy of "one-vote veto" to support companies to save energy, reduce emission and run business in compliance with environmental protection laws. Meanwhile, ICBC establishes a mechanism for head office and branches to monitor and control environmental risks under different responsibilities, especially the control of environmental risks and checking rules on loans to sensitive industries. ICBC keeps a close watch on the latest state environment protection policies and information on environmental risks. Through close monitoring and early warnings, ICBC manages and controls environmental risks throughout the process.

Fourth, ICBC also focuses consistently on financial innovation and expansion of green credit market. At present, ICBC is developing innovative green financial products such as carbon factoring, energy efficiency lending targeting at emerging green credit markets (energy savings, environmental protection, recycling economy). With an aim to be an eco-friendly "green bank", ICBC encourages innovative ways to save energy or reduce emission like low carbon green financial services - electronic banking, online finance. More important, ICBC sets its eyes on emerging green credit markets in line with the State industry polices and environment protection policies. Up to now, ICBC has disbursed RMB 590 billion in loans to green economy.


(2012-06-08)
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