4 June 2019

ICBC London Branch Climate Bond
Post-Issuance Verification Statement

Beijing Zhongcai Green Financing Consultant Ltd.

1

Scope and Objectives
Industrial and Commercial Bank of China Ltd., (ICBC) issued their second
Certified Climate Bond by London Branch (The Bond) in June, 2018.
Beijing Zhongcai Green Financing Consultant Ltd. (Zhongcai) has beencommissioned by Industrial and Commercial Bank of China Ltd. (ICBC),
London Branch to provide the Post-issuance verification of the Bond as anindependent and approved verifier under the CBS. The verification is
performed in accordance with the CBS Version 2.1 and the assurance approachis in line with the International Standard on Assurance Engagements 3000
(ISAE 3000): Assurance Engagements other than Audits or Reviews ofHistorical Financial Information.
The verification statement is based on information provided by the Issuer andthe Issuer is responsible for the integrity, accuracy and timeliness of theinformation. The verification opinions shall not be interpreted as any indication
or guarantee for relevant bond investment decisions. In no case may theopinions hereof operate as the interpretation or guarantee for economic
performance of bonds, credit rating and actual utilization of the raised fund.

2

Work Undertaken
The verification team has conducted documents review, interviews with the
management team of the Issuer and communications with relevant people toverify the consistency with CBS Version 2.1. The core matters for our
assurance to the Bond are to the following subjects of the Bond: Identification of Nominated Projects & Assets, Eligibility of the Nominated Projects & Assets,
 Management of proceeds,
 Reporting on use of proceeds and project performance.
According to the list of Nominated Projects & Assets provided by ICBC
London Branch, the Issuer has allocated the Net Proceeds to NominatedProjects & Assets falling under the following Sector Criteria of the Climate
Bonds Standard:
1. Solar (Version 2.1)
2. Wind (Version 1.0)
3. Low Carbon Transport (Version 1.0-including Criterion 5, Part (b), page
17: “No more than 50% on the share of fossil fuel freight t-kmtransported by the line”)
4. The Marine Renewable Energy Criteria (June 2017)
Compared with the list of Nominated Projects & Assets provided by ICBC
London Branch during Pre-issuance verification, the only change is the amountof the Net Proceeds.
According to Declaration made by ICBC and other supporting documents
provided by ICBC London Branch, a summary of the verification procedures isshown in the following table:
CBS
Item

CBS
Requirement

4

Nominated
Projects
AssetsVerification Procedures

Review the Green Bond Framework for Industrial and& Commercial Bank of China (ICBC Framework) to ensurethat the bond meet the CBS requirements.
Review that the Nominated Projects & Assets meet theeligibility criteria set out in the Solar, Wind, Low Carbon
Transport and Marine Renewable Energy Criteria of the
CBS.
Review the Declaration made by ICBC London Branch todetermine the Nominated Projects & Assets had not been3

nominated to other Certified Climate Bonds.
5

Use
Proceedsof Confirm all the Net Proceeds were used for refinancing.
Review Internal accounts systems to ensure all proceeds
are earmarked to Nominated Projects & Assets.
Review allocation of the Net Proceeds of the Bond to
confirm that the Net Proceeds of the Bond were allocatedto Nominated Projects & Assets within 24 months ofissuance of the Bond.

6

Non-Contamina Review internal accounts systems to ensure all proceeds
tionof are earmarked to Nominated Projects & Assets.
Proceeds

7

Confidentiality

The information about the Nominated Projects & Assets
were provided to the Verifier and are available to CBI if
required.

8

ReportingAccording to the ICBC Framework, ICBC commits topublish an annual green bond report, in which theinformation of allocation and quantitative performance
impacts will be included.
This Bond is the second bond certified under CBI by
ICBC. The first one was issued by ICBC Luxembourg
Branch in 2017. ICBC has published the annual report of
2017
as
per
the
ICBC
Frameworkon
http://www.icbc-ltd.com/ICBCLtd/Investor%20Relations/GreenFinance/. The quantitative performance impacts of
the Nominated Projects & Assets of the bond issued by
ICBC Luxembourg Branch are included in the annual
report of 2017. As clarified by ICBC in the Declaration,
the annual report of 2018 will be published before 31
October 2019, in which the quantitative performance
impacts of the Nominated Projects & Assets of the bondwill be reported.

9

Climate Bond Review Nominated Projects & Assets against CBITaxonomyeligibility taxonomy of the Solar, Wind, Low Carbon
Transport and Marine Renewable Energy.

10Technical
Criteria

The Bond is certified under the Solar, Wind, Low Carbon
Transport and Marine Renewable Energy Criteria. All the
Nominated Projects & Assets meet the specific eligibility
criteria of the relevant Sector-Specific Criteria documents.
4

11

Project Holding

Review the Nominated Projects & Assets of the Bond andthe use of the proceeds to ensure that the total investmentin the Nominated Projects & Assets is greater than theprincipal amount of the Climate Bond.

12

Settlement
PeriodReview allocation of the Net Proceeds of the Bond to
confirm that the Net Proceeds of the Bond were allocatedto Nominated Projects & Assets within 24 months ofissuance of the Bond.

13

Earmarking

Review internal accounts systems to ensure all proceeds
are earmarked to Nominated Projects & Assets.

5

Verification Opinion
Beijing Zhongcai Green Financing Consultant Ltd. (Zhongcai) has performed
the Post-issuance verification of the Bond in accordance with the Climate
Bonds Standard Version 2.1 and the International Standard on Assurance
Engagements 3000 (ISAE 3000): Assurance Engagements other than Audits or
Reviews of Historical Financial Information.
The assurance procedures include documents review, interviews with the
management team of the Issuer and communications with relevant people andfound that:
1. Compared with the list of Nominated Projects & Assets provided by ICBC
London Branch during Pre-issuance verification, the only change is theamount of the Net Proceeds.
2. ICBC commits to publish an annual green bond report before 31 October
2019, in which the information of allocation and quantitative performance
impacts will be included.
Based on the limited assurance procedures conducted, nothing has come to ourattention that the Bond is not in line with the requirements of the Climate
Bonds Standard and the relevant Sector Criteria (Solar Version 2.1, Wind 1.0,
Low Carbon Transport Version 1.0 and the Marine Renewable Energy Criteria(June 2017)).

Ying CUI

Yumei Tong

The verification team of Beijing Zhongcai Green Financing Consultant Ltd.

6

Annex 1. Climate Bonds Standard Requirements_Post_Issuance
4. Nominated Projects & Assets
Climate Bonds Standard
Requirement
4.1. The Issuer shall maintain adecision- making process which ituses to determine the continuing
eligibility of the NominatedProjects & Assets. This includes,
without limitation:
4.1.1. A statement on theenvironmental objectives of thebond.

4.1.2. A process to determine whether
the Nominated Projects & Assets
meet the eligibility requirements
specified in Part B of the Climate
Bonds Standard.

Findings

Met

Green Bond Framework for
Industrial and Commercial
Bank
of
China
(ICBC
Framework) was issued in
YES2017. Interview with relevant
personal and confirm that the
ICBC Framework has been
followed to manage the Bond.
The process is clearly stated in
the ICBC Framework. The
Bond was issued against
Climate
Bonds
Standard
version 2.1 and relevant sector
criteria are:
1.Solar (Version 2.1)
2.Wind (Version 1.0)
3.Low Carbon Transport
4.The
MarineRenewable
Energy Criteria
Sector-specifictechnical
YES
criteria are strictly followed by
the Bond.
ICBC has established a list of
Nominated Projects & Assets
which are kept up-to-date tomonitortheNominated
Projects & Assets during theterm of the bond.
Till
this
Post-Issuance
verification, there is no change
to the list of NominatedProjects & Assets of the Bond.
7

4.2. All Nominated Projects & Assets
funded by the bond’s proceeds shallmeet
thebond’sdocumented
objectives as stated under Clause 1.1,
and shall be in conformance with therequirements of Part B of the Climate
Bonds Standard.

As stated in the ICBC
Framework, the Net Proceedsof the Bond shall be used tofinance, and refinance,
eligible green assets that
promote the transition to
low-carbon and sustainableeconomy and provide clear
environmental
sustainability
and climate change benefits.
The Bond is certified under the
Solar, Wind, Low Carbon
Transport and The Marine
Renewable Energy Criteria,
which is compliant with thestatement.
According to the ICBC
Framework, ICBC commits topublish an annual green bondreport,
in
which
the
YES
information on allocation andimpacts will be included.
This Bond is the second bondcertified under CBI by ICBC
London. The first one wasissued by ICBC Luxembourg
Branch in 2017. ICBC haspublished the annual report of2017 as per the ICBC
Frameworkon
http://www.icbc-ltd.com/ICBC
Ltd/Investor%20Relations/Gre
enFinance/. The quantitative
performance impacts of theNominated Projects & Assetsof the bond issued by ICBC
Luxembourg
Branchareincluded in the annual report of2017. As clarified by ICBC,
the annual report of 2018 will8

be published no later than 31
October 2019, in which thequantitative
performance
impacts of the NominatedProjects & Assets of the bondwill be reported.

4.3. Nominated Projects & Assets
shall not be nominated to other
Certified Climate Bonds unless it isdemonstrated by the Issuer that As clarified by ICBC London,
distinct portions of the Nominated all the nominated Projects &YES
Projects & Assets are being funded Assets are not nominated toby different Certified Climate Bonds other Certified Climate Bonds.
or that the existing Certified Climate
Bond is being refinanced via another
Certified Climate Bond.
5. Use of Proceeds
Climate Bonds Standard
Requirement

Findings

Met

Allocation
register(the“Register”)
has
been
established to record theallocation of the Bond
5.1 The Net Proceeds of the bond proceeds.
shall be allocated to the Nominated Review the Register and YES
Projects & Assets.
confirm that all the Net
Proceeds were used for the Net
Proceeds of the Bond and has
beenallocatedtotheNominated Projects & Assets.

95.2. The Issuer shall allocate funds
to Nominated Projects & Assets
within 24 months of issuance of thebond. Funds may be reallocated toother Nominated Projects & Assets
at any time during the term of thebond.
5.3. Where a proportion of the Net
Proceeds of the bond are used forrefinancing, the Issuer shall provide
an estimate of the share of the Net
Proceeds used for financing and refinancing, and identify which
Nominated Projects & Assets may be
refinanced.
5.4. The Net Proceeds of the bondshall be tracked by the Issuer
following a formal internal process as
disclosed to the Verifier by the Issuer
under Clause 2.1
5.5 The Net Proceeds of the bondshall be no greater than the total
investment in the Nominated Projects& Assets or the total Fair Market
Value of the Nominated Projects &Assets at the time of issuance.

Review the Register andconfirm that all the net
proceeds were used for the Net
Proceeds of the Bond and has
YES
been
allocatedtotheNominated Projects & Assets
on 14 June 2018.

As confirmed by ICBC, theNet Proceeds of the Bond are YES
used for refinancing.

Allocation
register(the“Register”)
has
been
established to record the
YES
allocation of the Bond
proceeds.
Yes, as clarified by ICBC
London, Net Proceeds of theBond are smaller than the total YES
investment in the NominatedProjects & Assets.

6. Non-Contamination of Proceeds
Findings

Climate Bonds Standard Requirement

Met

Allocation register (the“Register”)
has
been
established to record the
YES
allocation of the Bond
proceeds.

6.1 The Net Proceeds of the bond shall becredited to a sub- account, moved to a
sub-portfolio or otherwise identified by
the Issuer in an appropriate manner anddocumented.
6.2 While the bond remains outstanding,the balance of the tracked proceeds shallbe reduced by amounts matching eligible
investments or loan disbursements made.
Pendingsuchinvestmentsordisbursements to Nominated Projects &Review the Register andconfirm that all the net
proceeds were used for the
YES
Net Proceeds of the Bondand has been allocated to
the Nominated Projects &10

Assets, the balance of unallocated Assets on 14 June 2018.
proceeds shall be:
6.2.1.Held in temporary investment
instruments that are cash, or cash
equivalent instruments, within aTreasury function; or6.2.2.Held in temporary investment
instruments that do not include
greenhouse gas intensive projects
which are inconsistent with thedelivery of a low carbon and climate
resilient economy; or
6.2.3.Applied to temporarily reduceindebtedness of a revolving nature
before being redrawn for investments
or disbursements to NominatedProjects & Assets
6.3. In the case of a Force Majeure, theIssuer may apply to the Climate Bonds
Standard Board for an extension to theasset allocation period. During the NA
extension period the balance of
unallocated proceeds shall be deemed tobe conforming to Clause 5.2.

NA

7. Confidentiality
Climate Bonds Standard Requirement

Findings

7.1 Information about the NominatedProjects & Assets shall be provided to the
Verifier and to the Climate Bonds The
listedStandard Board to support the assessment Projects &of conformance with the Climate Bonds enclosed.
Standard.

Nominated
Assets are YES

ICBC has published theannual report of 2017 as
per the ICBC Framework
7.2 Climate Bonds Standard.
in 2018. The quantitative
The Issuer should disclose information
performance impacts of the Yes
about the bond and the NominatedNominated Projects &Projects & Assets to the market
Assets of the bond issued
by ICBC Luxembourg
Branch are included in the
11Metannual report of 2017.
ICBC committed that theannual report of 2018 will
be published no later than
31 October 2019.
8. Reporting
Climate Bonds Standard Requirement

Findings

8.1 The Issuer shall provide to bondholders and to the Climate Bonds
Standard Secretariat at least annually areport containing the list of NominatedProjects & Assets to which proceeds ofthe bond have been allocated (orreallocated). The report shall include abrief description of the projects and theamounts disbursed, as well as the
expected impact of the nominatedProjects & Assets.

Met

ICBC committed that theannual report of 2018 will
be published no later than YES
31 October 2019 as per therequirement of CBI.

Qualitative
performanceindicatorsoftheNominated Projects &Assetsareclearly
determined in the annual
report 2017 and ICBC YES
committed that the annual
report will be published nolater than 31 October 2019as per the requirement of
CBI.
Accordingtotherequirement of CBI, themethods and the key
underlying
assumptions
used to determine theperformanceindicators YES
shall be included in theannualreport.
Ascommitted by ICBC, it will
be included in annual
report as required.
The
investment
areas
YES
include Solar, Wind, Low

8.1.1. The Issuer shall use qualitative
performance indicators and, where
feasible,quantitative
performancemeasures of the impact of the NominatedProjects & Assets;

8.1.2. The Issuer shall disclose themethods and the key underlying
assumptions used in preparation of theperformance indicators and metrics;

8.1.3.
Where
confidentiality
agreements, competitive considerations,12

or a large number of underlying assets
limit the amount of detail that can be
madeavailable
about
specific
Nominated
Projects&
Assets,information shall be presented on theinvestment areas which the NominatedProjects & Assets fall into, as provided
in Clause 9.1.

Carbon Transport, andMarine Renewable Energy,
which will be clearly
disclosed in the annual
report as committed by
ICBC.

9. The Climate Bonds Taxonomy
Climate Bonds Standard Requirement

Findings

9.1 Nominated Projects & Assets, as
identified by the Issuer under Clauses 1.3
and 4.2, shall fall into one or more of theinvestment areas contained in the latest
version of the Climate Bonds Taxonomy.

Met

The list of the NominatedProjects & Assets is
included enclosed to thepost verification report and YES
will be clearly reported in
the annual report of 2018as committed by ICBC.

10. Technical Criteria
Climate Bonds Standard Requirement

Findings

Yes

10.1 Nominated Projects & Assets shallmeet the specific eligibility criteria
provided in the latest version of therelevant
Sector-Specific
Criteria
document.

The Bond is certified
under the Solar, Wind,
Low Carbon Transport,
and Marine Renewable
YES
EnergyCriteria.
Sector-specific technicalcriteria
arestrictly
followed by the Bond.

10.2 Where the proceeds of a bond areallocated to a Nominated Projects &Assets that are covered by more than one
Sector-Specific Criteria (e.g., solar andwind investments in a portfolio), theneach of the Nominated Projects & Assets
shall meet the specific eligibility criteria
provided in the Sector-Specific Criteria
relevant to that Nominated Project &Asset.

The Bond is certified
under the Solar, Wind,
Low Carbon Transport,
and Marine Renewable
YES
Energy Criteria. All thesector-specifictechnical
criteria
arestrictly
followed by the Bond.

11. Project Holding
13

Climate Bonds Standard Requirement

Findings

Met

11.1 The Issuer of the bond shallcontinue to hold Nominated Projects &Assets which have Fair Market Value atleast equal to the original principal
amount of the bond at the time ofissuance.

Interviewed with personnel
from ICBC and confirmedthat the Fair Market Valueof the Nominated Projects
YES& Assets are equal to theoriginal principal amountof the bond at the time ofissuance.

11.1.1 Additional Nominated Project &Assets may be added to, or used to
substitute or replenish, the portfolio of
Nominated Project & Assets as long as
the additional Nominated project &Assets are eligible under Part B of the
Climate Bonds Standard and the bond’s
environmental objective as set out inClause 1.1.

As confirmed by ICBC
there is no Additional
Nominated Project & YES
Assets added to the Bondtill the end of May 2019.

12. Settlement Period
Climate Bonds Standard Requirement

Findings

Met

As confirmed by ICBC
that the Net Proceeds of
the Bond was transferredfrom ICBC London to YESICBC and allocated to theNominated Projects &Assets on 14 June 2018.

12.1 Issuers shall demonstrate that the
Net Proceeds of the bond have been
distributed to the Nominated Projects &Assets within 24 months of the issuanceof the bond.

Where full distribution of the Net
Proceeds is not achieved within 24
months of the issuance of the bond, theIssuer shall demonstrate that:
12.2.1The surplus or undistributed funds
have been invested in Eligible Projects
NA& Assets not otherwise nominated for a
specific Climate Bond.
12.2.2The Issuer has made temporary
investments of surplus or undistributed
funds in conformance with theprovisions of Clause 6.
12.2

14

NA

13. Earmarking
Climate Bonds Standard Requirements

Findings

13.1 The Issuer of the bond shall maintainthe earmarking process to manage andaccount for funding to the NominatedProjects & Assets as disclosed under
Clauses 2.1 and 2.1.3.

15

Met

Allocation register (the“Register”)
has
been
established to record theallocation of the Bond
proceeds.
Review the Register and YES
confirm that all the Net
Proceeds were used to theBond and has been
allocated to the NominatedProjects & Assets.