Industrial Bank, the first CHUEE partner bank, co-organized a green financing forum in Beijing with IFC and National Development and Reform Commission (NDRC). By working closely with bank regulators and commercial banks, IFC has stepped up the efforts of promoting sustainable financing in the country where there are pressing challenges in environmental degradation and fast-growing energy consumption.
“We are pleased to work with the Industrial Bank to assist the Chinese government to achieve the sustainable development and build an energy-conserving and environmentally friendly country.” remarked by Richard Ranken, Director of IFC East Asia and Pacific Department at the opening address. “IFC's triple bottom line - people, planet and profit - coincides with China's national objective to build a harmonious society,” commented by Rachel Kyte, Director of IFC’s Environment and Social Development Department, in her keynote speech at the forum.
Kyte made an important announcement at the forum that IFC and State Environmental Protection Administration (SEPA), China’s environment watchdog, have agreed on a groundbreaking initiative to develop a series of tools and guidelines for the Green Credit Policy, based on IFC’s Performance Standards and EHS guidelines. This cooperation will lead to long-waited localized green credit policy tools and guidelines for the banks. The People’s Banks of China and China Banking Regulatory Commission, which jointly developed the Green Credit Policy with SEPA, will also play important roles in this cooperation. "China is moving absolutely to the right direction when the country kicked off the 'Green Credit Policy'," commented Kyte when she was interviewed by China Central TV (CCTV).
"IFC has brought us not only investment, but also valuable advisory services including internationally proven best practices in sustainable financing”, remarked Mr. Li Renjie, Industrial Bank’s President, “the know-how transfer has enabled us to grasp the core techniques of sustainable financing, as well as to manage the risks in a more efficient manner."
According to Calvin Xu, IFC manager of the CHUEE program, Industrial Bank has mainstreamed the concept of sustainable financing among a team of over 3,000 loan officers across China. Industrial Bank has put forward a plan to finance 10 billion RMB worth of energy efficiency improvement and renewable energy projects by the end of 2010. The implementation of these projects is expected to help China reduce greenhouse gas (GHG) emissions of more than 40 million tons per year, representing about 8% of China's total 2006 GHG emission. "If there is another bank doing the same as Industrial Bank, China would have no problem achieving the goal of reducing pollutant discharges by 10% and energy intensity in GDP by 20% by the end of 2010."
Green Financing Achievements by Industrial Bank
Industrial Bank became the first partner bank of IFC CHUEE Program in May 2006. It has approved 32 deals with a total loan amount of more than 570 million RMB in the first 11 months. The implementation of these projects is expected to lead to a reduction of about 2 million tons of greenhouse gases emissions per year, which means the overall program objective of 4 to 8 million tons in six years is well within reach. It was recognized as the runner-up Deal of the Year in the FT Sustainable Banking Awards.
About China’s Green Credit Policy
The “Green Credit Policy” is a new joint initiative launched by the State Environmental Protection Administration, the People’s Bank of China and the China Banking Regulatory Commission in August 2007. The policy aims to restrict lending to companies that fail pollution checks or bypass environmental assessments.
