Green Bond Framework for Industrial and Commercial Bank of China Assessment Report

GREEN BOND FRAMEWORK FOR
INDUSTRIAL AND COMMERCIAL BANK OF CHINAASSESSMENT REPORT

Beijing Zhongcai Green Financing Consultant Ltd.

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Green Bond Framework for Industrial and Commercial Bank of China Assessment Report

中国绿色债券评估文件
版本 1.0 (2017.04.01)
China Green Bond (CGB) Assessment Document
Version 1.0 (2017.04.01)

Green Bond Framework for
Industrial and Commercial Bank of China
Assessment Report

Beijing Zhongcai Green Financing Consultant Ltd.
Date：26th August 2021

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Green Bond Framework for Industrial and Commercial Bank of China Assessment Report

Assessment Notes
Industrial and Commercial Bank of China ("ICBC" or the "Bank") commissioned
Beijing Zhongcai Green Financing Consultant Ltd. (“Zhongcai”) to assess "Green Bond
Framework for Industrial and Commercial Bank of China" （ the "Green Bond
Framework" or the "Framework"）in accordance with：

Green Bond Endorsed Projects Catalogue (2021 Edition) issued jointly by
the People’s Bank of China (PBoC), the National Development and Reform
Commission (NDRC) and the China Securities Regulatory Commission(CSRC)



PBoC Announcement No.39 [2015] for “Issuances of green financial bondsin the interbank bond market”



PBoC Announcement No.29 [2018] for “Strengthening the supervision andmanagement of green financial bonds during their duration”

1Green Bond Framework for Industrial and Commercial Bank of China Assessment Report

Contents
PART Ⅰ General Information
PART Ⅱ Use of Proceeds and Project Categories
PART Ⅲ Project Evaluation and Selection
PART Ⅳ Management of Proceeds
PART Ⅴ Information Disclosure
PART Ⅵ Assessment Conclusion
PART Ⅶ Disclaimer

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Green Bond Framework for Industrial and Commercial Bank of China Assessment Report

PART I General Information
1.1 General Information of the Assessment
Third-Party Assessment
Institution

Beijing Zhongcai Green Financing Consultant Ltd. is a
Member of China’s National Association of Financial
Market Institutional Investors, as well as Approved
Verifier of Climate Bond Initiative.

Type of Assessment

Green Bond Framework Assessment

Assessment Scope andMain Content

Assessment Duration

1. Use of Proceeds and Project Categories
2. Project Evaluation and Selection
3. Management of Proceeds
4. Information Disclosure
29th July to 26th August 2021

Assessor

LIU Huixin，QIAO Shinan, ZHOU Jieyu

Technical Reviewer

CUI Ying，LIU Nan

Methods

Review of project documents, issuer-related systems
and other documentation, interviews with the
management team and stakeholders throughinterviews and emails etc.
Properly arrange and actively cooperate with theAssessment Institution and ensure the integrity,
accuracy and timeliness of the information provided
Complete the assessment independently, objectively,
and impartially and provide the assessment report ontime based on the information provided by ICBC andother relevant parties

Role of Management
Team
Role of Assessment
Institution

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Green Bond Framework for Industrial and Commercial Bank of China Assessment Report

PART II Use of Proceeds and Project Categories
2.1 Use of Proceeds
The proceeds of each ICBC Green Bond will be used to finance or refinance
Eligible Green Assets that promote environmental protection, sustainable economic
development, and combating climate change. Eligible Green Assets can contribute toenvironmental protection, sustainable economic development and combating climatechange through energy conservation, emission reduction and resource recycling. The
Eligible Green Assets consist of Eligible Green Asset Categories from the various
business units of ICBC.
According to Green Bonds Endorsed Projects Catalogue (2021 Edition), “Greenbonds refer to marketable securities that use raised funds specifically to support green
industries, green projects, or green economic activities that meet specified conditions,and are issued in accordance with legal procedures and repay principal and interest
according to agreements”, with the aim of supporting environmental improvement,
action to climate change and efficiency improvements, and promoting sustainableeconomic and social development and industrial green transformation and upgrades.
The Green Bond Framework's regulations on the use of proceeds are in line with therequirements of domestic green bond standards.
2.2 Project Categories
The Eligible Green Assets under the Green Bond Framework include：

Renewable energy
Clean transportation
Energy efficiency
Sustainable water and wastewater management

For the avoidance of doubt, in any case, the Eligible Green Assets shall exclude
the assets that are involved in the following sectors or activates below：

Fossil fuel related assets
Nuclear and nuclear related assets:
Biomass/feedstock that will be derived from sources that compete with food production
 will be grown in areas with currently or previously high in biodiversity
 will decrease carbon pools in soil

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Green Bond Framework for Industrial and Commercial Bank of China Assessment Report

In addition, the Green Bond Framework further explains, "Assets in all eligible
categories shall at least reach the threshold of relevant green official standards ofenvironmental impacts recognized in the local jurisdictions. In case of no official
standards locally recognized, corresponding international standards shall apply."
According to Green Bond Endorsed Projects Catalogue (2021 Edition) , the Eligible
Green Assets under the Framework are compatible with the following categories："Eligible Green Asset Categories"
under the Green Bond Framework
Category
Eligibility Conditions
Renewable
Generation andenergytransmission ofenergy fromrenewable energy
sources:
Renewable energy
sources include
offshore andonshore wind, solar,
tidal, largehydropower(lifecycle emissions
below 100g
CO2e/kWh or power
density above 5W/m2), and biomass(lifecycle emissions
below 100g
CO2e/kWh).

Green Bond Endorsed Projects Catalogue(2021 Edition)
Category
Description/Condition
3. Clean
The component products
Energyselected for solar photov
Industryoltaic power generation facilities should meet the
3.2 Cleanfollowing requirements:
Energy1) The minimum photoel
3.2.2 The
ectric conversion efficien
Construction
and Operation cy of polycrystalline silico
n cells and monocrystalli
of Renewable
ne silicon cells shall not
Energybe less than 19% and 2
facilities
1% respectively; 2) The
minimum photoelectric conversion efficiency of pol
ycrystalline silicon cell modules and single crystal
silicon battery modules
shall not be less than 1
7% and 17.8% respectiv
ely; 3) The minimum photoelectric conversion effi
ciency of silicon-based,
CIGS, CdTe and other t
hin-film battery modules
shall not be less than 1
2%, 14%, 14%, 12%; 4)The decay rates of polycrystalline silicon battery
modules and monocrystal
line silicon battery modul
es shall not be higher th
an 2.5% and 3% in thefirst year, and not higher
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Green Bond Framework for Industrial and Commercial Bank of China Assessment Report

CleantransportationConstruction,
maintenance,
research anddevelopment ofzero direct emission(e.g. electric andhydrogen)transportation
facilities excluding
any infrastructure or
rolling stock assets
used for thetransportation offossil fuel or mining
products: Examples
include metro, rail
tram, bus rapidtransit systems, andelectric vehicles;

5. The Green
Upgrade ofInfrastructure
5.5 Green
Transport

Manufacture of key
assets, systems,
and components
dedicated for zero
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than 0.7% per year, an
d not higher than 20%
within the period of 25 years; the attenuation rateof thin-film battery module shall not be more th
an 5% in the first year,
no more than 0.4% peryear in the following yea
r, no more than 15% wit
hin the period of 25 yea
rs. Other projects need to ensure ecological andenvironmental security conditions such as "no sig
nificant impact on the ec
ological environment, noserious damage to marine ecology and biodiversity".
The Railway Transportshould meet the following
requirements:
Construction andoperation of freight railway
facilities such as freightrailway lines, yards andstations, and special
power substations;construction and operationof existing railway
electrification, yards andstations and energysaving and environmental
protection reform projectsof railway-related
equipment. Among them,railway yards and stations
must meet the relevant
provisions of the "Green
Railway Passenger
Station Evaluation
Standard" (TB/T 104292014).

Green Bond Framework for Industrial and Commercial Bank of China Assessment Report

Energyefficiency

Sustainable
water andwastewater
management

direct emission
vehicles andvessels.
Products or
technologies that
increase energy
efficiency andreduce at least 30%
energy consumptionof the related
asset(s),technology(ies),
product(s) or
system(s):Examples include
LED lights,
improved chillers,and improved
lighting
technologies
Improved efficiency
in the delivery ofbulk energy
services: Examples
include smart grids
and energy storage
Water collection,
treatment, recycling
technologies andrelatedinfrastructure:
Examples include
water pipes andcollection facilities
to collect water or
rainwater forrecycling, andwastewater
treatment plantfacilities

1. Energy
Saving andEnvironmental
Protection
Industry
1.1 Energy
Efficiency
Improvement
5. The Green
Upgrade ofInfrastructure
5.1 Energy
Efficiency
Improvement

The energy-saving
equipment manufacturing
should meet the energy
efficiency, pollution
emissions and otherstandard restrictions andrequirements of thecorresponding product.

1.Energy
Saving andEnvironmental
Protection
Industry
1.3 Pollution
Prevention
1.3.2 The
Treatment of
Sewage Water
1.4 Water
Saving andNonconventional
Water
Resources
1.4.1 Non-

The recycling of various
types of water andwastewater resources issubject to different
domestic water use
standards and restrictions
according to the use ofwater resources.

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Green Bond Framework for Industrial and Commercial Bank of China Assessment Reportconventional
Water
Resources
5. The Green
Upgrade ofInfrastructure
5.3 Pollution
Prevention
5.3.1 Urban
Environmental
Infrastructure
5.4 Water
Saving andNonconventional
Water
Resources
5.4.1 Water
Saving
The green asset categories under the Green Bond Framework are all in linewith the criteria of the Green Bond Endorsed Projects Catalogue (2021 Edition).
The project selection is subject to the description/condition of the green project
categories listed in the Green Bond Endorsed Projects Catalogue (2021 Edition).

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Green Bond Framework for Industrial and Commercial Bank of China Assessment Report

PART III Project Evaluation and Selection
3.1 Project Evaluation and Selection
Eligible Green Assets in the Green Bond Framework will be from the various
business units of ICBC globally, including its domestic and overseas branches andsubsidiaries. They will then be reviewed by a dedicated Green Bond working group at
ICBC Head Office (the "Working Group") which comprises representatives of Asset &Liability Management Department, Credit and Investment Management Department,
Corporate Banking Department, Modern Finance Research Institute and otherdepartments if relevant.
Prior to the issuance, the Green Bond Working Group will review all proposed
Eligible Green Assets to determine their compliance with the ICBC Green Bond
Framework for approval as "Eligible Green Asset" and form an eligible green asset list
(each "Eligible Green Asset", collectively the "Eligible Green Asset List"). For
refinancing projects, the Working Group will prioritize the most recent projects.
In the Working Group, representatives nominated shall include experts
possessing environmental experience and knowledge, and enjoy a veto power to thefinal decision on the selection. The assets vetoed by them shall be excluded from the
Eligible Green Asset List. Annually, the working group will review the allocation of theraised fund to the Eligible Green Asset List and determine if any changes arenecessary (for example, if a project has amortized, been prepaid, sold or otherwise
become ineligible) and facilitate ongoing reporting. The Working Group will decide anynecessary update of the Eligible Green Asset List (such as replacement, deletion, or
addition of projects) to maintain the eligibility of the Use of Proceeds.
According to the description of green projects in China's Green Bond Endorsed
Projects Catalogue (2021 Edition), green assets firstly come from various business
units of the ICBC Group (including domestic and overseas branches and subsidiaries),
then the green assets are reviewed by a "dedicated green bond working group" at
ICBC Head Office. This bottom-up selection process and professional review
mechanism can effectively screen out green projects that meet the requirements ofdomestic green bond standards and ensure the quality of green projects in the eligible
asset pool, thus ensuring that the fund raised are truly used to support environmental
protection, sustainable economic development and combating climate change.
The Green Bond Framework establishes a scientific process for project
evaluation and selection, which will effectively select eligible green assets.

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Green Bond Framework for Industrial and Commercial Bank of China Assessment Report

PART IV Management of Proceeds
4.1 Management of Proceeds
Prior to the issuance of a Green Bond, ICBC shall develop a preliminary Eligible
Green Asset List in accordance with the procedures as described in the ProjectEvaluation and Selection section to ensure that the proceeds can be allocated to the
Eligible Green Assets in a timely manner.
A Green Bond allocation register (the "Register") will be established to record theallocation of Green Bond proceeds. The proceeds of each ICBC Green Bond will bedeposited in the general funding accounts and "earmarked" pending allocation.
The Register will contain, for each Green Bond issued, information including：
1. Details of Green Bond: currency, amount, ISIN, pricing date, maturity date,etc.
2. Details of Eligible Asset List: information including：（1）Eligible Green Asset Categories（2）Summary of details of projects financed such as amount, project description,
age of the project, etc.
（3）Amount of allocated proceeds on the projects（4）Other necessary information so that the aggregate of issuance proceeds
allocated to the Eligible Green Assets is recorded at all times（5）Estimated environmental and social impact where applicable of the projects
financed
4.2 Management of Unallocated Proceeds
Any balance of issuance proceeds not allocated to Eligible Green Assets will beheld in accordance with ICBC’s sound and prudent liquidity management policy. The
remaining unallocated proceeds will be handled as compliant with the relevant green
bond standards of the issuing location, which includes to be temporarily invested inGreen Bonds issued by non-financial enterprises, money market instruments withgood credit rating and market liquidity in the domestic and international markets until
they are allocated to Eligible Green Assets. The unallocated proceeds shall not be
invested in highly polluting, high-carbon emission or resource-intensive projects.
According to the PBoC Announcement No.39 [2015], in terms of the managementof proceeds, the issuer “shall open a special account or establish a special ledger tomanage and supervise the transfer, allocation and payback of green bond proceeds.
This is to earmark the fund and make sure that all the unallocated proceeds in the
duration can be invested in green projects”. And during the period when the proceeds
are unallocated, the issuer may “invest the unallocated proceeds in green bonds
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Green Bond Framework for Industrial and Commercial Bank of China Assessment Reportissued by non-financial enterprises and money market instruments with good credit
rating and market liquidity". The Green Bond Framework specifies that a special ledger
will be established to manage the proceeds of green bonds, and ICBC plans to use
the unallocated proceeds to temporarily "invest in green bonds issued by non-financial
enterprises and money market instruments with good credit rating and market liquidity".
The management and use of proceeds both follow the requirements of the PBoC
Announcement No.39 [2015].
The Green Bond Framework has a sound plan for the subsequent
management and use of proceeds, which will effectively ensure that theproceeds are used for eligible green assets.

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Green Bond Framework for Industrial and Commercial Bank of China Assessment Report

PART V Information Disclosure
5.1 Reporting and Disclosure
ICBC commits to publish a Green Bond Annual Report which will provide
information on allocation and impacts on an annual basis, and provide timely updates
shall there be any material changes to the projects allocated.
For Green Bonds issued in China domestic market, ICBC will also follow therequirements of Chinese Green Bond Standards, including the “Green Bonds
Endorsed Projects Catalogue (2021 Edition)” jointly announced by the PBoC, NDRC
and CSRC; the PBoC Announcement No.39 [2015] for “Issuances of green financial
bonds in the interbank bond market”; and the PBoC Announcement No.29 [2018] for“Strengthening the supervision and management of green financial bonds during theirduration”, in which it is required to disclose the use of proceeds to the market on aquarterly basis. ICBC will disclose the annual report on the use of proceeds and special
audit report from the previous year, and the use of proceeds in the first quarter of theyear by 30th April every year. The annual report on the use of proceeds from last year
will also be reported to the PBoC.
5.2 Information Disclosure
5.2.1 Allocation Reporting
Information will be provided on amounts equal to the proceeds of the Green Bondissued and provide disclosure on the below aspects：（1）aggregate amount allocated to the various Eligible Green Asset Categories（2）remaining balance of funds which have not yet been allocated（3）geographical distribution of the proceeds (on country level)（4）examples of Eligible Green Assets (subject to confidentiality disclosures)
Furthermore, ICBC will confirm that the use of proceeds of the Green Bondissuance conforms to the Framework.
5.2.2 Impact Reporting
ICBC will endeavor to report on the relevant environmental and social impacts byproject and on a pro-rated basis according to the share of ICBC’s Green Bondfinancing where applicable resulting from Eligible Green Assets, and the relevant
information on the methodology and assumptions used for impact evaluation.

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Green Bond Framework for Industrial and Commercial Bank of China Assessment Report

Subject to the nature of Eligible Green Assets and availability of information, ICBC
aims to include, but not limited to, the following potential impact indicators ：Eligible Green Asset
Categories
Renewable energy

Clean transportation

Energy efficiency

Potential Impact Indicators

•
•
•
•
•
•

•
•

Sustainable water andwastewater••

KWh of power generated from renewableenergyTonnes of CO2 (or other GHG) avoided
Tonnes of CO2 (or other GHG) avoided
Length of new tracks built (km)No. of passenger
No. of electric vehicles purchased

KWh of energy saved per year
Percentage energy efficiency achieved
Amount of water saved
Amount of waste water treatedmanagement
The Green Bond Report(s) will be publicly available via annual updates on ICBC’s
official global website www.icbc-ltd.com.
ICBC will also make disclosure through other channels where feasible, such as
annual reports and corporate social responsibility reports, which will also be publishedonwww.icbc-ltd.com.
According to the PBoC Announcement No.39 [2015] and the PBoC
Announcement No.29 [2018] for “Strengthening the supervision and management ofgreen financial bonds during their duration”, the domestic green bond information
disclosure requirements are "the issuer shall disclose the annual report on use ofproceeds and special audit report from last year, and use of proceeds in the firstquarter of the year by 30th April every year. The annual report on use of proceeds shallbe reported to the People’s Bank of China". The content of the information disclosure
should contain "management of proceeds, use of proceeds, information on green
projects supported by the proceeds and environmental benefits, information disclosurerules and implementation, etc." The information disclosure and impact reporting under
the Framework meet the requirements of the PBoC Announcement No.39 [2015] andthe PBoC Announcement No.29 [2018] for “Strengthening the supervision andmanagement of green financial bonds during their duration”.
The Green Bond Framework establishes a comprehensive plan for green
bond disclosure, which will effectively ensure effective disclosure of green bondinformation.

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Green Bond Framework for Industrial and Commercial Bank of China Assessment Report

PART Ⅵ Assessment Conclusion
The assessment institution and assessors of Zhongcai have neither foundevidence of misrepresentation nor substantive error that leads to non-compliance of
the Green Bond Framework against the Green Bonds Endorsed Projects Catalogue(2021 Edition), the PBoC Announcement No.39 [2015] for “Issuances of green
financial bonds in the interbank bond market”, and the PBoC Announcement No.29[2018] for “Strengthening the supervision and management of green financial bonds
during their duration” by reviewing relevant documents and communicating throughinterviews and emails with the relevant departments and persons from ICBC.
Based on a comprehensive assessment of the use of proceeds and project
categories, project evaluation and selection, management of proceeds, andinformation disclosure within the Green Bond Framework, the following assessment
conclusions are drawn：
1.

The green asset categories under the Green Bond Framework are all in line withthe criteria of the Green Bonds Endorsed Projects Catalogue (2021 Edition). The
selection of projects is subject to the description/condition under the green project
categories listed in the Green Bonds Endorsed Projects Catalogue (2021 Edition).

2.

The Green Bond Framework establishes a scientific process for project evaluationand selection, which will effectively select eligible green assets.

3.

The Green Bond Framework has a sound plan for the subsequent management
and use of proceeds, which effectively ensure that the proceeds are used for
eligible green assets.

4.

The Green Bond Framework establishes a clear scheme for green bonddisclosure, which will effectively ensure effective disclosure of green bondinformation.

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Green Bond Framework for Industrial and Commercial Bank of China Assessment Report

PART Ⅶ Disclaimer
The assessment institution abides by the principles of independence, objectivity
and fairness, and follows the relevant laws, regulations and self-regulatory rules in thisassessment. Based on the information collected in the course of practice, it promisesthat the content stated in the assessment report is objective, true and accurate, andbears the liability for the reasonableness of the assessment conclusion. The
assessment statement is based on information provided by the Issuer and the Issuer
is responsible for the integrity, accuracy, and timeliness of the information.
The assessment institution evaluated the use of proceeds and project categories,
project evaluation and selection, management of proceeds, and information disclosure
within the green bond framework. This assessment provides information support onlyin the aforesaid areas and does not accept liability for damages based on this opinion
and its information.
The assessment opinions shall not be interpreted as any indication or guarantee
for relevant bond investment decisions. In no case may the opinions hereof operate as
the interpretation or guarantee for economic performance of the bonds, credit rating
and actual utilization of the raised fund.

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