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55 Fuxingmennei Avenue, Xicheng District, Beijing, China    Post Code: 100140
www.icbc.com.cn, www.icbc-ltd.com

4

Special Report on Green Finance 2018

All rights reserved. Reproduction without permission is prohibited.

Industrial and Commercial Bank of China Limited

1

Preface
At present, protecting the environment, copingof ICBC. It stands firm in fulfilling its economic

with climate change and promoting sustainable

and social responsibilities, and is committed todevelopment have become common challenges

making integrated advances in economic, social andconfronting the world. In 2015, the United Nations

ecological benefits. By putting in place innovative

formally adopted the Sustainable Development

green finance projects, ICBC presented the corporate

Goals (SDG), aiming at solving social, economic andimage of actively performing social responsibilities

environmental problems in an integrated way fromas a large bank following the core value of “Integrity

2015 to 2030. In the same year, the Paris Agreement

Leads to Prosperity”.

was adopted at the United Nations Climate Change
Conference in Paris, with a view to providing an

As the forerunner and leader of green finance, ICBC

action basis for the global response to climate changetakes the responsibility and mission of driving global

after 2020.

green development, while continuing to promote its
own green development. In 2018, it issued two green

As China is entering the critical period of adjustment

Belt and Road bonds, valued at USD2.33 billion inof economic structure and transformation of

total, which are used to support green projects alongdevelopment mode, the CPC Central Committee

the Belt and Road. Referring to and complying withhas clearly defined “greening” as one of the goals

the framework of the Task Force on Climate-relatedof economic transformation. The Report of the

Financial Disclosures (TCFD), ICBC, in conjunction

19th CPC National Congress puts forward that itwith nine Chinese financial institutions and fouris important to develop China into a great modern

British financial institutions, set up a pilot workingsocialist country which is beautiful, and points out

group for environmental information disclosure, tothat we should “ensure harmony between humanadvance the green transformation of the real economy

and nature”, “develop green finance, and promoteby paying attention to, analyzing and studying

green development”, and provide financial support

environmental information.

for the building of a beautiful China. In 2016,seven ministries and commissions, including theIn advancing the pilot work and research, we

People’s Bank of China (PBOC) and the National

have gradually come to realize that environmental

Development and Reform Commission, jointly issued

information of financial institutions includes

the Guidelines on Building a Green Financial System.

information related to the impact of financial

It is the first national green finance policy in the world

institutions’ operation on the environment, the impact

and points out the direction for China’s financial

of investment and financing on the environment

institutions to develop green finance.

and the impact of environment on opportunities andrisks facing financial institutions. This special report

As the largest commercial bank in the world,

describes ICBC’s practice and achievements in the

Industrial and Commercial Bank of China (ICBC)

area of green finance in 2018. In the future, ICBC will

has always adhered to the business philosophy oftake the building of a beautiful China as its mission

promoting the development of real economy withand continue to explore new ways of promoting green

green finance, deeply planted green development

ecological advancement with financial strength, so

i n t h e c u l t iva t i o n o f c o r p o r a t e c u l t u r e , a n d

as to contribute to the sustainable development ofincorporated green operation into all business lines

the world.

Environment

2Society

Special Report on Green Finance 2018

Governance

C
O
N
T
E
N
T
S

CONTENTSICBC Chairman's Statement·02
ICBC President's Statement·04

01 Strategy and Governance..................................................07
02 Policy and Process. . ..........................................................13
03 Green Products.................................................................25
04 Green Operation...............................................................45
05 Green Studies...................................................................51
06 Awards and Honors...........................................................59

Industrial and Commercial Bank of China Limited

01

ICBC Chairman’s Statement

Chairman Chen Siqing,ICBC

In the course of the evolution of human civilization, a beautiful and harmonious living environment
has always been the desire of the people. At present, protecting the environment, coping with climatechange and safeguarding energy and resource have become the tasks facing all countries. China’s
ecological civilization has entered a critical window period that requires serious efforts to getthrough, which is a major strategic judgment made by President Xi Jinping taking into account theoverall economic, political, social and environmental development. While making efforts to transit
China’s economy from a phase of rapid growth to a stage of high-quality development, we must also
do better in the prevention and control of pollution and environmental governance. The people’s
needs for a beautiful environment has also constituted an important part of the principal contradiction
facing Chinese society.
Under this background, green finance, through capital supply and resource allocation, bridges
economic behavior, resource utilization and environmental protection. It is an important innovation
made by human beings in the pursuit of sustainable development. In 2016, the G20 (the Group of20) Summit was held in Hangzhou, China. The PBOC and the Bank of England jointly establishedthe G20 green finance research group (later renamed as the G20 sustainable finance study group),
and formally put the topic of green finance on the G20 agenda. It helped attract widespread attention

02

Special Report on Green Finance 2018

on green finance from governments, enterprises, financial institutions and third party organizations. In 2017,
Chinese President Xi Jinping pointed out that we should “speed up reform of the system for developing an
ecological civilization, and build a beautiful China”, and regard the “development of green finance” as animportant way to promote green economic development. It demonstrates China’s determination and conviction
in improving the environment and achieving sustainable development, and consolidates the strategic positionof green finance in the building of an ecological civilization. Under this guidance, the concept of sustainable
development has been deeply rooted in the hearts of the people. It has become a consensus that we all should
help build the foundation of ecological civilization and take the road of green development together.
As the largest commercial bank in the world, ICBC has long regarded the building of “a Chinese-leading,world-class green financial institution” as its development strategy. It has incorporated green financethroughout all aspects of financial services, operation and management, stood firm in performing its economic
and social responsibilities, and advocated green low-carbon operation. It is committed to making integrated
advances in economic, social and ecological benefits, and aims at becoming the pioneer and leader among
financial institutions to achieve sustainable development.
In China, ICBC actively develops green finance to support the real economy, and drives the development ofgreen industry by issuing green credit, green bonds and other financial products. It continuously improves
its green performance and promotes the sustainable transformation of its customers. It carries out forwardlooking research, adopted new green financial instruments and methods, and contributes to the building of abeautiful China with blue sky,green land,lucid waters and lush mountains.
Internationally, ICBC strongly supports the initiative of green Belt and Road, and provides financial support
for environmental protection, poverty reduction and improvement of the people’s livelihood in countries andregions along the Belt and Road. It actively participates in global environmental governance, and maintains
close cooperation with the United Nations Environment Programme, the World Bank, the World Wide Fund for
Nature, the International Finance Corporation and other institutions. It continuously tightened requirements on
itself, as the leader of Chinese financial institutes to push the China-UK environmental information disclosure
programme .
Going forward, ICBC will continue to uphold the concept of green development, adopt new service modes,
and promote China’s industrial restructuring while continuously promoting its own green transformation.
It will help raise public awareness of green development while strengthening its own awareness of energy
conservation and emission reduction. It will continue to participate in the global governance of green financeby offering its practical experience and achievements, on the premise of constantly improving its ability topractice green finance.
Green indicates a benign balance between economic growth and environmental protection. Green development
is an achievement stem from generations of hard work in global governance and the most valuable asset for
our future generations. As an important driving force for the sustainable development of the global economy,
green finance has great potential for future development. It is the key to the building of a community of shared
responsibilities, interests and future. I am confident that global financial institutions, including ICBC, will
strengthen the green transformation, take their responsibilities, deepen exchanges and cooperation, and makenew contributions to the sustainable development of the global economy.

Industrial and Commercial Bank of China Limited

03

ICBC President’s Statement

President Gu Shu,ICBC

Chinese President Xi Jinping pointed out that, “what we are doing today to protect the environment
will benefit generations to come.” Under the background that ensuring ecological security andpromoting sustainable development have become a global consensus, green finance, as a bridge
to guide social capital to green investment, is not only the source of promoting green economictransformation and cultivating new drivers of growth, but also an important development direction for
financial industry.
For a long time, ICBC has actively practiced the concept of green finance, continuously explored
and innovated, and spared no effort to support the building of an ecological civilization. In 2018,
the balance of green credit of ICBC reached USD1,237,758 million, an increase of 12.6% over the
beginning of the year, which was 6.6 percentage points higher than that of the domestic corporateloans over the same period of the previous year. It successfully issued green Belt and Road bonds
abroad, valued at USD2.33 billion in total. It released the first ESG index in China based on theevaluation of domestic institutions, providing an advanced tool for the banking industry to quantify
and manage environmental risks.

04

Special Report on Green Finance 2018

With green development becoming a national strategy, China is playing an increasingly important role inglobal sustainable governance. Against this backdrop, we have been keenly aware of the expectations fromour country and the international community, our investors and shareholders. Environmental information
disclosure is the basis for the development of green finance and the building of an ecological civilization. It isalso a major task that needs long-term persistence. ICBC has made some basic and exploratory attempts andhas been widely recognized around the world.
At the 9th China-UK Economic and Financial Dialogue held on December 15, 2017, the two governments
encouraged Chinese and British financial institutions to jointly conduct pilot disclosure of environmental
information. Guided by the Green Finance Committee (GFC) of China Society for Finance and Banking,
ICBC led nine Chinese financial institutions, including ICBC, Industrial Bank, Bank of Huzhou, Bank of
Jiangsu, E Fund, China Asset Management Company, PICC Property and Casualty Co., Ltd., Ping An Groupand AVIC Trust, to set up a pilot working group with four financial institutions from the UK, to jointly pushforward the disclosure of environmental information. With more than one year of unremitting efforts, theworking group has developed the Plan for Pilot Disclosure of Environmental Information of Chinese andBritish Financial Institutions, issued a three-phase action plan, and established the Target Framework forEnvironmental Information Disclosure of Chinese Financial Institutions, clarifying the qualitative informationand quantitative indicators for disclosure. At the third China-UK Green Finance Conference held on
November 30, 2018, ICBC, on behalf of Chinese institutions, jointly released the Report on the Progress of
Pilot Disclosure of Climate and Environmental Information of Chinese and British Financial Institutions in2018 with the UK, revealing the progress and achievements made in pilot work.
2019 marks the first year of disclosing environmental information. The Special Report on Green Financeissued by ICBC covers environmental data and green performance derived from ICBC’s own development
process. It has accumulated practical experience and made useful exploration for further disclosure ofenvironmental information of Chinese and British financial institutions. It is hoped that this special report
released by ICBC meet the criteria of all readers. At the same time, we expect more Chinese financial
institutions to take part in this work and contribute to the building of a beautiful, harmonious and green world.

Industrial and Commercial Bank of China Limited

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06

Special Report on Green Finance 2018

01
Strategy andGovernance① Strategy② GovernanceIndustrial and Commercial Bank of China Limited

07

Strategy
As a large listed bank with international influence, ICBC is deeply aware of the farreaching impact of resource and environment on economic and social development. Act
on this understanding, it has made active efforts to meet international standards, andadvocated the concept of sustainable development in the international community. In
2012, ICBC became China’s first commercial bank joining the United Nations Global
Compact. In 2015, it joined the United Nations Environment Programme Financial
Initiative (UNEP FI) . In 2016, it joined the framework of the Task Force on Climaterelated Financial Disclosure(TCFD), becoming the first financial institution in China tojoin such organization .The same year,ICBC joined the Statement by Financial Institutions
on Energy Efficiency.
ICBC creatively established the green finance system in line with China’s and its own
conditions, drawing lessons from the Equator Principles and the social risk management
system. During the reporting period, ICBC actively practiced the vision of innovative,
coordinated, green, open,and share development and the five-sphere integrated plan ofcoordinated economic, political, cultural, social and ecological advancement, and actively
contributed to a model of modernization with humans developing in harmony with nature
through its own financial practice.

Strategic Goal
Developing into a world-leading green bank with good international reputation.

Strategic Thinking
Integrating the concept of green development into the overall strategy andbuilding a green finance strategy system suitable for ICBC.
Fostering green values, raising awareness of sustainable development, anddeveloping green culture recognized at home and abroad and by all employeesof the Head Office and branches.

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Special Report on Green Finance 2018

Comprehensively promoting green finance from the aspects of policy, system,
management process, business innovation and performance.
Launching new green finance products and enhancing the ability to provide
green finance services in an all-round way.
Continuously innovating methods and tools to strengthen environmental andclimate risk management.

Implementation Path
Ensuring preservation and innovation and highlighting characteristics.
ICBC will innovate with reference to the best practices in green finance athome and abroad and in accordance with China’s and ICBC’s conditions,constantly enrich the implications and essence of green finance, and determine
the development path of green finance with its own characteristics, according
to China’s overall plans and regulatory requirements for building an ecologicalcivilization.

Strengthening top-level design and taking all factors into consideration.
ICBC will improve the long-acting mechanism of green finance development
in a top-down manner, carry out management of the annual, medium and longterm objectives concerning green finance, coordinate the relationship among
sustainability, security and profitability, and achieve the organic unity of economic
and social benefits, and short-term and long-term interests.

Implementing whole-process management and one-vote veto system.
ICBC will embed the requirements on green finance in front, middle and backoffice business processes, explore to include environmental and social risk factors
in customer (project) risk assessment system, strengthen monitoring, identification,
mitigation and control of environmental and social risk indicators, and exercise green
finance one-vote veto system throughout the whole process.

Working in cooperation with a due division of labor and ensuring
participation of all employees.
ICBC will improve the working mechanism of leading management and coordinatedadvancement, form an architecture of mutual cooperation and participation of
all institutions and business lines of ICBC, incorporate green finance into daily
operation, fully arouse the enthusiasm, initiative and creativity of employees
to participate in, stand firmly and work tirelessly to ensure that green financedevelopment achieves desired results.

Industrial and Commercial Bank of China Limited09

GovernanceIn line with the best social responsibility practices in the world, ICBC continuously
explores the sustainable development path for enterprises, strengthens organizational
guarantee for green finance from the perspective of governance structure, and highlights
the coordinated leadership of green finance by the Board of Directors and the Senior
Management. The Strategy Committee, the Audit Committee and the Compensation
Committee of the Board of Directors are respectively responsible for approving andsupervising ICBC’s green finance development strategy, auditing ICBC’s environmental
and social risks, evaluating Senior Management members’ implementation of green
finance and incorporating the implementation results into their performance assessment.
The Senior Management is responsible for establishing ICBC’s green financedevelopment strategy and long and medium-term objectives. The Credit Risk Committee
is responsible for formulating ICBC’s green credit policy and managing green credit risks.
The green bond task force is responsible for work relating to ICBC’s issuance of green
bonds. All business departments concerned shall, under the leadership of the Credit andInvestment Management Department, carry out green finance related work within theirrespective terms of reference.

The Strategy Committee of
the Board of Directors shallsupervise and evaluate theimplementation of ICBC’s
green finance strategy.

The Audit Committee of
the Board of Directors shallconduct special audits on
the environmental and social
risks of projects selected by
employing third-party auditing
institutions and entrusting theInternal Audit Bureau.

Board of Directors
The Board of Directors is responsible
for approving the Group’s green
finance development strategy, theannual, long and medium-term goalsof implementing the green financestrategy, and the green finance goals
and development reports submitted
by the Senior Management.

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Special Report on Green Finance 2018

The Compensation Committeeof the Board of Directors is
responsible for appropriately
embodying the implementationof green finance in theperformance assessment resultsof the Senior Management.

It is also responsible
for approving policies
and procedures for
implementing green
finance development
strategy.

Senior Management

It shall clarify the responsibilities
of green finance development,
coordinate and promote relevant
work, allocate resource to implement
green finance development strategy,
and supervise the implementation ofgreen finance strategy.

The Senior Management is responsible
for formulating ICBC’s green financedevelopment strategy, determining theannual, long and medium-term objectivesof implementing green finance strategy,
and approving important policies,
institutional products and management
measures for implementing green finance(credit).

It shall report to theBoard of Directors on theimplementation of green
finance development
strategy on an annual basis.

The Credit and Investment
Management Department is
responsible for taking thelead in management of green
finance work.

Relevant business departments
are responsible for the green
finance work within theirrespective terms of reference.

Relevant departments
Relevant departments shall implement
policies and rules, innovate products andmanage risks.

A benign mechanism shallbe established whereby thedepartments in charge areresponsible for coordinationand supervision, and otherdepartments participate inactively.

Industrial and Commercial Bank of China Limited

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Special Report on Green Finance 2018

02
Policy andProcess① Policy and System② Process Management

Industrial and Commercial Bank of China Limited

13

Policy and System
In 2018, ICBC focused on strengthening top-level design, continuously improved climate
and environment-related policies and systems, and provided basic guarantee and positive
guidance for the sustainable and steady development of green finance.

I C B C i s s u e d t h e O p i n i o n s o n C o m p r e h e n s ive l yStrengthening Green Finance Building to clarify ICBC’s
priorities on developing green finance.

As building an ecological civilization has become a national strategy and a new regulatory
requirement, ICBC issued the Opinions on Comprehensively Strengthening Green Finance Building
in 2018, which deepen the understanding of the importance of green finance building, clarify theobjectives and basic principles, and streamline the priorities and measures for developing green
finance with greater efforts. The Opinions set out seven priorities and 25 measures, including
continuously promoting the green adjustment of investment and financing structure, enhancing
management of investment and financing environments and social risks, actively carrying out
green finance innovation, comprehensively improving self-performance, earnestly implementing
regulatory requirements, and strengthening organizational guarantee and daily management forgreen finance development, which lay a solid foundation for strengthening green finance building
in all respects, building a world-leading green bank and achieving the sustainable development ofinvestment and financing.

ICBC revised and issued the Industrial (Green) Credit
Policy to promote the green adjustment of credit structure.

Since 2003, ICBC has revised and issued the Industrial (Green) Credit Policy year by year tomeet the requirements of green credit policies for various industries. Specifically, in terms ofindustrial investment orientation, ICBC gave higher industry positioning to green industries
such as ecological protection, clean energy, energy conservation and environmental protection,and circular economy, established the relationship between industry orientation and economic
capital, encouraged and guided ICBC to actively support credit business in the field of green
economy; in terms of specific industry policies, ICBC paid close attention to technique, energy
consumption, technology, environmental protection and other key indicators that could reflect the14

Special Report on Green Finance 2018

core competitiveness and risk status of an enterprise, and defined them as one of the core elementsin the Industry Credit Policy.

ICBC formulated special policies to support businessdevelopment in key areas of green credit

Since 2009, ICBC has actively fostered the green credit market in line with China’s industrial
and environmental protection policies. It has formulated and issued the Guidelines on Credits forEnergy Saving Fields and the Opinions on Prioritizing Credit Support for Key Fields of Advanced
Manufacturing, guiding ICBC to actively cultivate emerging green credit markets such as energy
saving, emission reduction and circular economy, and achieved good results.
In 2018, ICBC issued the Opinions on Expanding Green Bond Underwriting Business for
Corporate Customers, further promoted the development of green bond underwriting business forcorporate customers, and did a good job in monitoring the usage of funds raised, so as to ensure
it complies with relevant policies and regulatory requirements on green bonds. The Opinions on
Expanding Environmental Protection Industry were issued, clarifying the key areas of financial
services for green economy.

ICBC adopted international standards and guidelines
and continuously improved classified management ofgreen credit.

With reference to the Equator Principles and IFC Performance Standards and Guidelines, ICBC
issued the Administrative Measures for Green Credit Classification in 2014, which divide ICBC’s
domestic corporate loan customers and projects into four grades and 12 categories according to theimpact of loans on the environment, and embed them in ICBC’s internal asset management system
to achieve reasonable quantitative management of customers’ environmental and social risks.

ICBC promoted green financing to serve China’s threestrategic underpinning belts.

ICBC actively implemented the national plan for three strategic underpinning belts, formulated andissued guidelines for credits extended to boost the Belt and Road Initiative, the development of the
Beijing-Tianjin-Hebei region and the Yangtze Economic Belt, respectively, of which such green
industries as clean energy, green transportation, energy saving and environmental protection are
the key areas of financing. In line with the above guidelines, ICBC seized strategic opportunities,
cultivated new drivers of credit growth, and realized healthy and sustainable development ofcredit business. ICBC also issued the Administrative Measures for Risks in Going Global Crossborder Financing Business, requiring relevant overseas institutions to comply with local policies,
regulations, regulatory requirements and international practices, and strengthen environmental andsocial risk management with respect to the Belt and Road and Going Global business.

Industrial and Commercial Bank of China Limited

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Process Management
In accordance with advanced international theories, best practices, and the latest domestic
regulatory requirements, taking into account the actual situation, ICBC formulated theGroup’s Comprehensive Risk Management Rules and the Administrative Measures for
Risk Appetite, and developed the 2018-2020 Risk Management Plan, setting out theobjectives and tasks of future risk management. ICBC strengthened crisis management,completed the annual renewal of recovery and resolution plans, and improved stresstesting methods. It took the main responsibilities for risk prevention and control, andimproved the comprehensive risk management system.

Strictly observing the bottom line of environmental
and social risk compliance.
The enterprises (projects) financed by ICBC shall comply with the laws, regulations
and regulatory requirements of host countries (regions) on environmental protection,
land, health and safety, strictly abide by constraints on local ecological protection,
environmental quality and the utilization of resources. In 2018, ICBC issued the Risk
Prompt on Financing Involved in Environmental Protection Supervision and Policy
Adjustment, requiring all branches to raise environmental protection standards forcustomers from key industries and regions, strictly implement the “one-vote veto systemfor environmental protection”, observe the bottom line of environmental and social risk
compliance, and strengthen risk management and control over high-risk customers.

Strictly carrying out whole-process green credit
management.
According to environmental and social risk compliance requirements, ICBC specified
actions and points of attention in each area in consideration of the characteristics ofcustomers or projects, and strengthened whole-process management of environmental andsocial risks in investment and financing.
ICBC regarded environmental and social risk investigation as an important part of due

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Special Report on Green Finance 2018

diligence, comprehensively evaluated the willingness, ability and historical records ofcustomers in management of environment and social risks, and preliminarily classified
environmental and social risks for customers or projects.
In reviewing and approving credits, ICBC regarded customers’ environmental and social
risks as an important part in reviewing reports, and developed a standardized list ofenvironmental and social risk compliance documents and review highlights. According to
the nature and severity of environmental and social risks of customers or projects, ICBC
put forward loan schemes and determined reasonable and effective prerequisites andmanagement requirements.
In signing contracts, ICBC formulated the terms and conditions of the environmental andsocial risk management contracts in strict compliance with relevant requirements of its
Notice on Improving the Text of Credit Business Format Contract, and urged customers tostrengthen the management of environmental and social risks.
In granting funds, ICBC verified the implementation of the preconditions for financing
one by one, and paid attention to whether the customers had violated laws or regulations
or whether there were negative public opinions in terms of environmental protection, land,
health and safe production. ICBC will terminate fund appropriation in a timely manner if
any major potential risks are identified.
In post-lending management, ICBC strengthened post-investment (lending) monitoring,
early warning and periodic onsite inspection, regularly conducted onsite inspection overcustomers operate in environmentally sensitive industries in strict compliance with theHead Office’s post-lending management measures and relevant requirements on green
finance management, and fully understood the status of enterprises’ compliance withenvironmental protection laws and regulations.

Due diligence

Review andapproval

Contract signing

Fund
appropriation

Post-lending
management

Regardingenvironmental andsocial risk investigation
as an important part ofdue diligence

Regardingcustomers’
environmental
and social
risks as animportant partin reviewing
reports

Requiringcustomers tostrengthen
environmental
and social risks
management

Verifying theimplementationof preconditions
for financing one
by oneStrictly
implementing
post-lending
management
measuresand relevant
requirements on
green financeIndustrial and Commercial Bank of China Limited

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Strengthening the ability to quantify risks andincorporating environmental factors into
customer rating and the customer credit rating
monitoring system
Considering environmental factors when rating customers
The results of corporate customer rating are an important basis for credit risk
management decision-making regarding customer access management, credit
approval, post-lending management, capital measurement, provision set-aside,
performance assessment, etc.

The customer
rating model iscomposed of

Quantitative
assessment+

Qualitative
assessment

+

Level
adjustment andrestriction

three
parts

In customer level restriction, customers’ environmental protection behavior,safe production standards, green credit classification and other factors are taken
into account.

Considering environmental factors when monitoring customer rating
When major environmental protection or safety incidents occur, the customer
involved shall be re-rated within one month. ICBC reinforced assessment andresource allocation of green credit, and regularly monitored customers whose green
credit classification marks exceed the specified level. For these customers, the system
will downgrade their rating and issue a prompt for re-rating.

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Special Report on Green Finance 2018

Sewage interception project around the Erhai Lake (Phase II) financed by ICBC Yunnan Branch

Industrial and Commercial Bank of China Limited

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Strengthening prevention and control ofrisks for financing enterprises with backward
production capacity
Eliminating backward production capacity is an important measure to resolve theproblem of excess capacity and promote industrial upgrading in China. ICBC paid
close attention to changes in national policies, and took advantages of relevantmeasures such as industrial credit policy and shift management of key industries tocontinuously improve its working mechanism. It tightened financing for customers
with backward production capacity that should be eliminated, effectively promoted
the prevention of backward production capacity risks, and achieved remarkable
results. As at the end of December 2018, loans to five industries with excess capacity,such as steel, dropped by RMB8.4 billion from the beginning of the year.

Conducting self-assessment regarding green
credit and fully developing green credit
Since 2014, the China Banking
Regulatory Commission(CBRC) has regularly carriedout self-evaluation regarding
green credit on an annual basis,
with evaluation results as animportant basis for the followup “green bank rating”. In
order to meet the regulatory
requirements of the CBRC on
green credit evaluation, in 2018,
the Head Office organized
20 relevant departments tocarry out self-evaluation of
ICBC’s green credit work in
2017. For unqualified indicators and areas of weakness found in the self-evaluation,
ICBC studied and put forward rectification and improvement measures. In 2019,
ICBC completed self-evaluation of its green credit work in 2018. The results showthat ICBC’s green credit work was advanced solidly and steadily, and its green credit
structure was further improved. In the 2018 green bank evaluation campaign held by
the China Banking Association, ICBC won the title of excellent bank in the overall
evaluation of green banks.

ICBC won the title ofexcellent bankin the overall evaluationof green banks.

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Special Report on Green Finance 2018

A clean energy project financed by ICBC Guangxi Branch

Industrial and Commercial Bank of China Limited

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COLUMN
C

O

L

U

M

N

Conducting stress testing on the impact of environmental risk
on commercial banks’ credit risk

Under the guidance of the GFC, ICBC has conducted stress testing on the impact of environmental risk oncommercial banks’ credit risk ever since 2015. The results were officially released on the London Stock
Exchange during the G20 Green Finance Summit held in London in March 2016, filling the gap of China’scommercial banks in the field of environmental risk quantification and transmission mechanism research.
It also provides a tool for global financial institutions to study environmental risks. ICBC worked witha number of institutions at home and abroad, including Beijing Environment Exchange, Trucost of S&P,
China Lianhe Equator Environmental Impact Assessment Co., Ltd., Deutsche Gesellschaft für Internationale
Zusammenarbeit (GIZ), and Risk Management Solutions (RMS), to conduct stress testing in multiple
industries and fields, which made it well positioned to stay ahead of the world.

Stress factors

Study object

Released on

Partners

Thermal power

March 2016

Nil

CementMarch 2016

Nil

Electrolytic
aluminum

March 2017

TrucostSteel

September 2017

China Lianhe Equator Environmental
Impact Assessment Co., Ltd.

ClimateDrought

March 2018

GIZ, RMS

Price

Carbon trading

May 2019

Beijing Environment Exchange

PolicyDeveloping ESG green rating tools and index products
At the International Symposium on Environmental Risk Analysis held in July 2017, ICBC officiallyreleased the ESG Green Rating and Green Index Research Report, which was completed in cooperation
with CSI Research Institute and Trucost. This study combines CSI Research Institute’s understanding of

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Special Report on Green Finance 2018

the index building methods and ICBC’s
customer advantages, fully considers thedimension of the Chinese context andthe characteristics of enterprises, and has

In December 2018

established an evaluation system withthe "CSI 180 ESG Index"

scientific methods and highly reliable data.
This evaluation system is the first of its
kind among Chinese commercial banks. It

jointly developed by ICBC andCSI was formally launched.

has not only filled up the gap of Chinesebanking industry in the research field ofenvironmental risk quantification andtransmission mechanism, but also has played a leading role in the global banking industry for researching on
green finance and environmental risk quantification. In order to assist with the development and applicationof ESG rating and index project, ICBC also developed the Industry Credit Risk Management System and the
ICBC Index Management System, which will further improve the quality of enterprise environment data.
In December 2018, the “CSI 180 ESG Index” jointly developed by ICBC and CSI was formally launched.
Based on ICBC’s ESG green rating, the index leveraged the extensive data accumulated by ICBC for a long
period, and effectively improved the accuracy and effectiveness of ESG rating.

Industrial and Commercial Bank of China Limited

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Special Report on Green Finance 2018

03

Green Products① Green Credit② Green Bond

Industrial and Commercial Bank of China Limited

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Green Credit
In recent years, ICBC has continued to practice the concept of green credit, contributed
to the building of an ecological civilization, and made great achievements in developing
green credit, supporting green development and the real economy, and leading global
green practice through green intellectual achievements.
The green economy is the major destination of ICBC’s investment and financing support.
ICBC reasonably balanced the relationship among social benefits, economic benefits andfinancing risks, gave priority to high-quality customers, key projects and high-quality
projects in such green economic fields as ecological protection, clean energy, energy
conservation and environmental protection, green transportation, green building, circular
economy and low-carbon economy, and gradually expanded their proportion in its overall
investment and financing.

Domestic green credit balance(RMB100 million)

Equivalent to reduced emission of
CO2 (10,000 tons)

12,377.58
10,991.99
9,785.6

7,561.87

8,958.79

7,333.64

2016

26

2017

2018

Special Report on Green Finance 2018

2016

2017

2018

Domestic greean credit balance

increased by 12.61%
over the previous year.
Around 6.6 percentage points
higher than the growth of domestic
corporate loan balance in thesame period.

Green credit scale
In 2018, ICBC actively implemented national industrial policies and regulatory
requirements, and continuously increased credits in the green field. As a result, thescale of green credits has steadily expanded. As of the end of 2018, the balance of
ICBC’s domestic green credits granted to energy conservation and environmental
protection projects such as ecological protection, clean energy, and resource recycling
reached RMB1,237,758 million, an increase of RMB138,559 million or 12.61% overthe beginning of the year, around 6.6 percentage points higher than the growth ofdomestic corporate loan balance in the same period.
Note: The statistics of green credit are based on the Notice on the Submission of Green Credit Statistics
issued by the CBRC in 2013.

Green adjustment of investment
and financing structure
The balance of loans granted to clean energy such as hydropower, wind power andsolar power accounted for more than 60% of the total amount of loans. As viewed
from the growth, 77% of the increased electricity loans in the past three years wereused in clean energy; thermal power loans were mainly used to create more costefficiency large-scale coal-fired power projects and natural gas power projects while
closing some small thermal power units with low efficiency, with the purpose of
reducing coal consumption, and improving energy efficiency and environment.

The balance of clean energyloans accounted for more than

60% of the total balanceof loans to the power industry.

77% of the increased
electricity loans in the past
three years were usedin clean energy

Industrial and Commercial Bank of China Limited

27

ICBC strengthened restructuring of environmentally sensitive industries andcustomers. Environmental sensitive industries and industries with excess capacity
should be the focus of investment and financing restructuring of ICBC, and the total
amount and proportion of investment and financing should be reasonably controlled.
In order to actively meet the requirement of de-capacity, effectively resolve theproblem of excess capacity in industries such as steel and coal, and promote industrial
restructuring, transformation and upgrading, in 2018, ICBC implemented shift
management over five industries with excess capacity, including steel, and actively put
differentiated credit policy into practice. It increased support for leading enterprises
with advanced technology and equipment, competitive products and market share.
It satisfied the reasonable fund demands of backbone enterprises in respects ofacquisition and reorganization, technological transformation, energy saving andemission reduction, going global and daily operation, and actively promoted theresolution of the problem of excess capacity through financial means, so as to advancethe transformation and upgrading of the industry. At the end of December 2018, loans
granted to five industries with excess capacity, such as steel, dropped by RMB8.4
billion from the beginning of the year.

Launch the statistical
identification of “energy saving
and environmental protection
project and service”
Green credit assessment
and incentive

Improve the functions ofgreen credit statistics system

On the one hand, ICBC enhanced green credit assessment and resource allocation.
In the reporting period, ICBC adjusted the quantitative indicators of green credit,
incorporated them into the quarterly performance assessment index system ofbranches, and further improved the performance assessment and incentive and restraint
mechanism for green credit work. On the other hand, ICBC improved the level of ITbased green credit management. In 2014, ICBC launched a statistical identificationof “energy saving and environmental protection project and service” in the credit
management system (including eight sub-indicators such as classification of energy
saving and environmental protection projects and services and achievements in energy
saving and emission reduction). In the reporting period, ICBC sorted out and verified
the classification and statistical data quality of green credits of corporate customer
project loans, further improved the quality of relevant basic data and upgraded thefunctions of the green credit statistics system.

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Special Report on Green Finance 2018

Green credit environment performance
According to the regulatory statistics reporting rules and energy saving and emission reduction
calculation guidelines set out in the Notice on the Submission of Green Credit Statistics(Y.J.B.F. [2013] No. 185) issued by the CBRC, and based on the approval documents, feasibility
reports and environmental assessment reports on green credit projects, in 2018, ICBC achieved
outstanding green credit environment performance. ICBC’s green credit reduced emission of
89,587,900 tons CO 2 equivalent, up 13,969,200 tons or 18.47% over the year beginning. It
reduced emission of standard coal of 46,439,700 tons, up 3,967,100 tons over the year beginning;
it saved 42,904,200 tons of water, up 10,039,700 tons over the year beginning.
Equivalent to reduced emission ofstandard coal (10,000 tons)

Equivalent to reduced emission of
COD (10,000 tons)

4,643.97
4,110.82

4,247.26
28.7

2016

2017

2018

Equivalent to reduced emission ofammonia nitrogen (10,000 tons)

2016

15.83

23.31

2017

2018

Equivalent to reduced emission of
sulfur dioxide (10,000 tons)

38.31

2.3

1.61

2016

2017

3.93
2018

Equivalent to reduced emission of
nitric oxides (10,000 tons)

2016

12.43

4.33

2017

2018

Equivalent to water saved (10,000 tons)

4,290.42

6,126.49

3,286.45
5.08

6.15

3.72

2016

2017

2018

2016

2017

2018

Industrial and Commercial Bank of China Limited

29

COLUMN
C

O

L

U

M

N

Dedicated in promoting the green adjustment
of investment and financing structure

Guided by the principle of pursuingdevelopment through innovation, ICBC
fully implemented the green financeconcept, and supported domestic andforeign projects in the fields of clean
energy, environmental protection,energy saving and emission reduction,and circular economy, in order toadvance the efficient, sustainable andsound development.

Offshore wind
power project
Developing green energy to create abetter ecological environment

With a total investment
of GBP 2.6 billion

Moray offshore wind power project in the UK
The 950 MW offshore wind power project in Moray East of the
UK had a total investment of GBP2.6 billion, including projectloans of GBP2.1 billion. ICBC co-organized a syndicate withBBVA Bank of Spain, Santander Bank, Commerzbank, Calyon
Bank, Societe Generale, Natexis Banques Populaires, ING Bank,
Mizuho Bank and Sumitomo Mitsui Banking Corporation, etc.
The project is a typical case of multi-country cooperation indeveloping large-scale green energy projects. It uses the mostadvanced technology and equipment to make full and effective
use of local green energy. The project was awarded the “BestElectricity Project of the Year in Europe” by the Project FinanceInternational of Thomson Reuters.

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Special Report on Green Finance 2018

The project was awarded
the “Best Electricity
Project of the Year in
Europe” by the Project
Finance International ofThomson Reuters.

Driving energy saving and emission reduction bymultilateral financial cooperation

Reduce carbon dioxide emissions by
156,000 tons per year
Benban photovoltaic power station project in Egypt
The project is a key national-level renewable energy project in Egypt, which is a part of the Egypt
Benban Photovoltaic Park. After the completion of the park, it will provide energy for 80,000
households and reduce carbon dioxide emissions by 156,000 tons per year. At the same time,
the project fully adopts the World Bank’s standards on environment, health, safety and social
responsibility. ICBC and the European Bank for Reconstruction and Development (EBRD)
provided USD140 million parallel loans for Egypt’s 120 MW photovoltaic project. ICBC and
EBRD each undertook 50% of the loans, and the loans provided by ICBC were insured by MIGA
under the World Bank. This project is operated in a new mode and its financing structure iscomplex. It is a typical project of cooperation among multilateral financial institutions, and also
the first non-recourse project financing organized by a Chinese commercial bank in Egypt.
The international award of “Best Multilateral Project of the Year” conferredby the Project Finance International of Thomson Reuters
The international award of the “Best Project in Middle East and North
Africa” conferred by IJ Global
The international award of “Project Financing Transactions” conferredby Bonds, Loans & Sukuk

Photo credit: IFC.

Industrial and Commercial Bank of China Limited31

Developing low carbon energy to drive
green development

The project has atotal investment of
USD4.3 billion

After completion, it will become the world’s
largest photothermal power station project with anaverage electricity rate of 7.3 cents/KWh
Photothermal power station project in Dubai
The project was jointly invested by the Dubai Electricity and Water Authority (DEWA), ACWA
and Silk Road Fund, with a total investment of USD4.3 billion. ICBC, Bank of China, Standard
Chartered Bank and other institutions provided a syndicated loan of USD2.5 billion for theconstruction of a 700 MW photothermal power station and a 250 MW photovoltaic power station.
More than 10 institutions including Natixs and UNB were also involved. This project is planned
under the Dubai government’s 2050 Clean Energy Strategy, which will become the world’s largest
photothermal power plant project in the world after completion. The integrated average electricity
rate is 7.3 cents/KWh, the lowest among all photothermal power stations in the world. Dubai
photothermal power stations are one of the key projects constructed by Chinese enterprises underthe Belt and Road Initiative.

Picture quoted from the website of DEWA

32

Special Report on Green Finance 2018

Digital finance boosts ecologicalbuilding of Xiongan

By the end of 2018, theplatform had granted funds formore than 2,000 times

with an amount of morethan RMB 130 million
Digital Xiongan Ecological Chain Wisdom New Area
Construction Project
ICBC Software Development Center integrated the research results of blockchain technology
with business innovation, to provide high-quality financial services for government agencies andenterprises in Xiongan New Area. It launched several influential blockchain application products,
such as the blockchain platform for managing Xiongan New Area construction funds, which havebeen highly affirmed by the Administrative Committee of Xiongan New Area, and got a head startin the fierce competition with other financial institutions. After the project was put into operation,some digital new area construction projects in Xiongan New Area, such as No. 9 plot of the firstphase of “Millennium Xiulin” project, the second phase of the 100,000 Mu landscape & seedlingforest project, the appropriation of land expropriation funds and the ecological treatment ofTanghe Sewage Reservoir were successfully put into use, to energetically support the efficient andtransparent management of the full-cycle capital services of more than 300 enterprises and over
5,000 personnel involved in the construction of the New Area. By the end of 2018, the platform
had granted funds for more than 2,000 times, amounting to over RMB130 million, and strongly
supported the construction of Xiongan New Area through digital finance.

Industrial and Commercial Bank of China Limited

33

Innovating operation mode to promote water
environment protection

The water output meets the national level A standard
30% of the water output after treatment is used
as reclaimed water for local cleaning and greening.

FCR
bioreactor

Precipitation+
Fiber turntablefiltration process

Tuanlin Sewage Treatment Plant project of Huadian Water
Service Qinhuangdao Co., Ltd. in Beidaihe New Area
Tuanlin Sewage Treatment Plant in Beidaihe New Area intends to combine FCR bioreactor,
precipitation and fiber turntable filtration process. The water output meets the national level A
standard. After treatment, 30% of the water output is used as reclaimed water for local cleaningand greening. The project serves Beidaihe New Area of Qinhuangdao. It can effectively reduce
the pollution pouring into the Bohai Sea and meanwhile serve as a proper destination for sludge,
thus protecting the water environment of Beidaihe and Bohai Sea.
As urban infrastructure with the main purpose of serving society, the project not only provides anindispensable production condition for the production sector, but also a necessary living condition
for local residents. ICBC Hebei Branch actively forged ahead to grant loans of RMB66 million
to the first phase of Tuanlin Sewage Treatment Plant. By the end of 2018, RMB33.5 million
had been funded. By supporting the construction of the sewage treatment plant, Hebei Branch
has assisted in improving the ecological environment of Beidaihe New Area and achieved good
ecological and social benefits.

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Special Report on Green Finance 2018

Promoting shared green transport torealize low carbon emissions

ICBC Henan Branch granted loans of
RMB1.7 billion for Zhengzhou
Suburban Railway Project
Suburban railway project of Zhengzhou Metro Group Co., Ltd.
In 2018, ICBC Henan Branch granted loans of RMB1.7 billion for Zhengzhou suburban railway
project, which effectively solved both the enterprise and the project’s problem in accessing funds.
The rail transit of this project is empowered by electricity, without causing pollutants such ascarbon oxides, nitrogen oxides and sulfur smoke particles. It will play a positive role in reducing
air pollution and improving urban environment. After the project is put into service, it will directly
create 1,860 jobs, and convenient, fast and comfortable transportation facilities will effectively
improve the transport status. At the same time, the service level of public transport in Zhengzhou
will be improved. It is of great significance to strengthening the traffic links between the downturnareas of Zhengzhou and the southern airport area.

Industrial and Commercial Bank of China Limited

35

Using clean energy to boost regional
development

Provide project financing
of RMB 400 million

No. 1 and No. 4 projects of Dalad Photovoltaic Power
Application Leading BaseIn September 2018, ICBC Inner Mongolia Autonomous Region Branch provided financing
support for two projects, namely, No. 1 and No. 4 projects of Dalad Photovoltaic Power
Application Leading Base, which were invested and constructed by Narentai New Energy Co.,
Ltd. in Dalad Banner. By the end of the year, a total of RMB400 million had been provided forthe above projects, and RMB300 million of financing will be granted in the near future. Whileutilizing local high-quality solar energy resources, the photovoltaic leading base can increase
regional economic added value and environmental bearing capacity, which is of great significanceto regional economic development. The Branch actively followed up, closely communicated andgave priority to the project, and ultimately achieved a win-win situation in upholding regional
development strategy, supporting key green projects and improving the lending structure. It also
drawn valuable lessons for its ensuing efforts in developing high-quality clean energy power
projects such as photovoltaic power and wind power output base.

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Special Report on Green Finance 2018

Promoting ecological governance and protecting urban
water from the sources

The project will effectively solve urban inland standing
water and repair damaged roads and bridges

Water ecosystem governance project of 100-li Yitong Riverin Changchun
Yitong River is the secondary tributary of Songhua River and the mother river of Changchun.
In order to comprehensively renovate the whole basin of Yitong River and solve the problems
surrounding the basin, water ecosystem governance, water ecological maintenance, flood control
transformation, river-crossing roads and bridges, greening and other infrastructure and public
services were all taken into consideration to design the PPP project of the 100-li Yitong River
water ecosystem governance project in Changchun. ICBC Jilin Branch, as ICBC in charge and thecorrespondent bank, and China Development Bank, as the participating bank, granted a syndicatedloan of RMB21.5 billion to the project. Among which, ICBC Jilin Branch undertakes to provide
a total of RMB7.5 billion loans, and has so far granted RMB7.2 billion to the project. The projectwill effectively solve urban inland standing water, improve hygienic conditions of the city, repair
damaged roads and bridges, and promote the construction of urban unblocked projects. Moreover,
it is expected to effectively solve the current situation of water pollution in the Yitong River basin
and protect the urban ecological environment in the future.

Industrial and Commercial Bank of China Limited

37

Building a green, beautiful capital so thatits benefits are shared by all

The total investment of the three projects
is about RMB1,321 million
Project of Beijing Environmental Sanitary Engineering Group
Co., Ltd.
As a local state-owned enterprise in Beijing, Beijing Environmental Sanitary Engineering Group
Co., Ltd. is the largest and most professional industrial group in the field of environmental
sanitation in Beijing. It has been working on garbage collection, transportation and disposal, so as
to ensure that Beijing functions well. In 2018, Beijing Environmental Sanitary Engineering Group
Co., Ltd. applied to ICBC Beijing Branch for loans for its three projects, which are to guarantee
the comprehensive treatment of domestic garbage, excrement and kitchen garbage in Dongcheng,
Xicheng, Chaoyang, Changping and Pinggu districts, and the disposal of garbage leachate. The
total investment of the three projects is RMB1,321 million and the construction period is 15
years. Beijing Branch actively responded to the call of protecting the environmental, successfully
assisted Beijing Environmental Sanitary Engineering Group Co., Ltd. to issue three-year offshorebonds of USD225 million, and provided financial support for its environmental protection
projects, helped provide better treatment of domestic garbage in Dongcheng, Xicheng, Chaoyang,
Changping and Pinggu districts of Beijing, and contributed its share to Beijing domestic garbage
disposal.

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Special Report on Green Finance 2018

Bank-government cooperation promotes regionalsustainable development

Signing RMB100 billion worth ofStrategic Cooperation Agreement
on Clean Energy Developmentwith the Development and Reform
Commission of the Tibetan
Autonomous Region

Supporting the autonomous
region to build a national
clean energy base, a “westto-east power transmission”
relay base and an energy
base radiating South Asia

Strategic Cooperation Agreement on Clean Energy Development
Given the rich clean energy, such as water, light, heat and wind, in Tibet, ICBC Tibet Autonomous
Region Branch has closely followed up the plan of building a national clean energy base, a “westto-east power transmission” relay base and an energy base radiating South Asia, and actively
supported clean energy projects such as hydroelectric power, wind power and photovoltaic power.
By the end of 2018, the balance of loans to clean energy projects reached RMB5.62 billion, an
increase of RMB1.24 billion or 28.3% over the year beginning, 20.2 percentage points higher than
the average growth of total loans. On October 26, 2018, ICBC Tibet Autonomous Region Branch
and the Development and Reform Commission of Tibetan Autonomous Region signed a Strategic
Cooperation Agreement on Clean Energy Development, with a total financing of RMB100 billion.
The signing of this strategic cooperation agreement laid the foundation for Tibet in building anational clean energy base, a “west-to-east power transmission” relay base and an energy baseradiating South Asia in the future.

Industrial and Commercial Bank of China Limited

39

Green BondICBC entered the field of bonds in 2007. Since then, after more than
10 years of accumulation, it has gained a leading edge in green
strategy, policy system, processes, rules, talent cultivation, researchand innovation, ranking first in many areas of the green bond market
of China and the world.

2017
ICBC issued the first Belt and Road green climate bondworth USD 2.15 billion equivalent in Luxembourg.
On September 28, 2017,
ICBC issued its first Beltand Road green climatebond worth USD2.15
b i l l i o n e q u iva l e n t i n
Luxembourg, whichranked first in terms ofissuance criteria, issuanceamount and investment
theme. The green bond
was awarded the “BestESG Deal” of Finance
Asia, “SRI Bond” of IFR Asia, and “Best Green Bond” of The Asset in 2017, and the“Green Bond Fund Usage Innovation Award” of the Environmental Finance and the“Asia Pacific Green/SRI Bond Deal of the Year” of GlobalCapital in 2018, achieving
good results. The experience we learned from this issuance in product positioning,bond design, road show and other aspects can serve as an important reference for
Chinese issuers in issuing green bonds overseas.

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Special Report on Green Finance 2018

2018
ICBC kept making innovations andbreakthroughs in the field of green bonds
ICBC issued two Belt and Road green-themedbonds to boost the green bond market
On June 5, 2018, ICBC, through London Branch, issued Belt and Road green
bonds in both USD and EUR, with an issuance amount of an equivalent of USD1.6
billion. The bonds were officially listed on the London Stock Exchange and werethe largest of its kind. The issuance and listing of green bonds reflects the outcomesof the 2017 China-UK Economic and Financial Dialogue in respect of the Beltand Road Initiative, green finance and infrastructure and energy. The proceeds ofthe bonds will be used to support green asset projects such as clean transportation
along the Belt and Road, land renewable energy and offshore wind energy. The
offshore wind energy project, as a clean energy project in the UK, embodies
the philosophy of ICBC that combines the implementation of its green financecommitments with in-depth exploration of local markets. The bonds continue tofollow the green framework established by ICBC in 2017 and have obtained the“climate bond” certificate issued by the Climate Bond Initiative (CBI), which isin line with international and domestic best practices in green finance. The bonds
were awarded the “Largest Emerging Market Certified Bond” by CBI in 2018.
On June 13, 2018, ICBC, through ICBC (Asia), issued Belt and Road green bonds
in both USD and HKD, with an issuance amount of an equivalent of USD730
million, which were officially listed on the Stock Exchange of Hong Kong Limited.
The bonds continue to follow the green framework established by ICBC in 2017,and meet the latest domestic and international standards for green bonds. Besides,
the bonds were awarded the Pre-issuance Stage Certificate issued by Hong Kong
Quality Assurance Authority (HKQAA). It is the first batch of green bonds issued
by a financial institution and certified by the agencies of Government of the Hong
Kong Special Administrative Region and also the first of its kind that is issued by abank registered and licensed in Hong Kong.

June 5, 2018

June 13, 2018

ICBC, through London Branch,issued Belt and Road green bonds
in both USD and EUR

ICBC, through ICBC (Asia), issued Beltand Road green bonds in both USD
and HKD

The final issuance amount isequivalent to USD 1.6 billion

The final issuance amount isequivalent to USD 730 million

Industrial and Commercial Bank of China Limited

41

Actively underwriting green bonds to meet green
financing demands
In 2018, ICBC underwrote 16 overseas green bonds in USD, EUR, HKD and CNY,
with a total proceeds of USD6,741 million, contributing to the participation ofChinese issuers in the international green bond market.
In 2018, ICBC, on behalf of Chinese-based institutions, issued six green bonds
as the lead underwriter, with a total proceeds of RMB65.51 billion, actively
contributing to the development of China’s green bond market. The proceeds of thegreen bonds underwritten by ICBC were mainly used in the construction of projects
that meet the requirements on green environment and ecology, strongly supporting
the development of green undertakings. Meanwhile, ICBC strengthened cooperation
with relevant institutions in the interbank market to jointly push for further
improvements in China’s green financial system.

List of overseas green bonds underwritten by ICBC in 2018
IssuerCurrency Trading amount (USD)CGNPC International Limited
EDP Finance BV
China Everbright Bank/Hong Kong
ICBC (Asia)
ICBC (Asia)
ICBC (Asia)

EUR

578,990,000

EUR

688,818,000

USD

300,000,000

USD

200,000,000

HKD

331,279,000

USD

200,000,000

Beijing Capital PolarisInvestment Co., Ltd.

CNY

99,511,650

Agricultural Development Bank of China

EUR

572,885,000

Capital Environment Holdings Limited
Beijing Capital Polaris
Investment Co., Ltd.
Industrial Bank Co., Ltd./Hong Kong
ICBC London Branch
ICBC London Branch
ICBC London Branch
ICBC London Branch
Industrial Bank Co., Ltd./Hong Kong

USD

250,000,000

USD

500,000,000

USD

600,000,000

USD

500,000,000

USD

500,000,000

EUR

585,760,000

EUR

495,652,000

EUR

338,367,000

In 2018, ICBC, on behalf of Chinese-based
institutions, issued six green bonds as thelead underwriter, earning a total proceeds of
RMB65.51 billion.

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Special Report on Green Finance 2018

RMB 65.51
billionActively participating in green bond investment and providing
financial support for green industry
By the end of 2018, the balance of RMBdominated green bond investment in thebanking book of the Head Office and branches
of ICBC amounted to about RMB30.18
billion, covering all kinds of bonds issued
by financial institutions and non-financial
institutions; the balance of foreign currency
green bond investment in the banking bookof ICBC was about USD95.7 million, mainly
focusing on the bonds issued by policy banks
and commercial banks, in an effort to meet thefund needs for development of domestic andglobal green industry.

RMB-dominated green bonds in
ICBC Head Office and branches

The investment balance was about
RMB 30.18 billion

Foreign currency green bonds
in ICBC

The investment balance was about
USD 95.7 million

Continuing to properly engage in green bond trading andpromoting market liquidity
By the end of 2018, ICBC had steadily carriedout green bond trading in the interbank
and over-the-counter bond markets, with acumulative amount of about RMB760 million.
This will enhance the activity of the green
bond market, thus arousing the enthusiasm ofinstitutions and individual investors in trading
green bonds and guiding them to enhancegreen investment awareness.

By the end of 2018, ICBC had steadily
carried out green bond trading in theinterbank and over-the-counter bondmarkets

The cumulative investment
balance was about

RMB 760 million

Being devoted to green bond innovation and improving
the green financial product system
In 2018, ICBC successfully underwrote a
number of new green bonds for customers
in the interbank market, playing an excellent
exemplary role. For example, on behalfof an electric power enterprise, ICBC
successfully underwrote a green assetbacked note (ABN), which is the first clean

energy green ABN of an enterprise under
the central government in the interbank
market. Also, on behalf of a transportationgroup, ICBC underwrote a green debt
financing instrument, which is the first bondin the interbank market directly used forpurchasing clean energy buses.

Industrial and Commercial Bank of China Limited

43

44

Special Report on Green Finance 2018

04

Green Operation

Industrial and Commercial Bank of China Limited

45

Harmony, openness
and reciprocity

ICBC has been practicing the concept of green operation, advocating green
office, and continuously enriching the connotation of office information
system. During operation, ICBC actively promotes paperless office, conducts
research and promotes paperless meetings, strictly implements rules on caruse, strengthens energy consumption control, advocates water conservationand other environmental protection measures, and achieves remarkable
results.

46

Special Report on Green Finance 2018

Continuously launching new electronic channels and transaction functions to
respond to the advocate for environmental protection and energy conservation
In 2018, ICBC deeply implemented andPersonal transfer and remittance andconveyed the concept of environmental
wealth management product transactions
protection and advocated low-carbon
that were conducted via online banking
operation. For example, it continued toand mobile banking
enhance the IT application of financial
market business, and cut energy
accounted for more than 60%
consumption by reducing documents printedof the total
on paper and business trips, etc. In addition
to over-the-counter transactions required
The amount of fund transactions
by regulators, non-cash transactions ofaccounted for more than 80%
personal customers can now fully beof the total
handled online. In 2018, agency settlement
Online paper investment
and sale of foreign exchange that weretransactions
handled via electronic channels accounted
for 21% of the total, four percentage
accounted for more than 99%
points up compared to the previous year;of the total
personal transfer and remittance and wealthmanagement product transactions that wereconducted via online banking and mobile banking accounted for more than 60% of the total,and fund transactions accounted for 80% of the total. Almost all transactions related to paper
precious metals, crude oil, futures and agricultural products were closed online, accounting for
more than 99% of the total amount of transactions. Meanwhile, ICBC accelerated research on
and the development of the e-trading platform for corporate customers in financial market andthe settlement and sale of foreign exchange function of the corporate mobile banking, further
enhanced the ability of electronic channels to serve its customers, and continued to improve thegreen financial service system.

Creatively promoting the development of smart banking to convey
the concept of green financial services to customers
In light of the e-ICBC 3.0 strategy, ICBC pushed forward theintelligent transformation of traditional financial services, and I C B C ’ s o n l i n eestablished an open, cooperative and win-win financial service banking businessecosystem. ICBC strengthened infrastructure, and significantly accounted forenhanced the platform as the underpinning. During the reporting
97.7%
period, ICBC’s online transactions accounted for 97.7% of the totalof totalamount of transactions, effectively promoting physical outlets toachieve energy conservation and emission reduction, and reduce
operational consumption. ICBC provided customers with annual statements of accounts,
specifically counted the number of transactions conducted by customers via ICBC Mobile, andestimated the amount of carbon emissions saved based on traveling, outlet manpower, voucher
printing and other costs. With these data, it disseminated the concept of energy conservation andenvironmental protection to its stakeholders.

Building an open, cooperative and win-win financial service ecosystem

Industrial and Commercial Bank of China Limited

47

Table 1 Greenhouse Gas Emissions and Natural Resource
Consumption Caused by ICBC’s Operation
Environmental
indicator

Directgreenhousegas emission

Indirectgreenhousegas emission

Sub-item

Unit

2018

2017

2016

Oil consumption of official
cars (Head Office)Liter

76,69986,10986,532

Water consumption in
offices (Head Office)Ton

172,377

170,196

156,324

Power consumption in
offices (Head Office)KWh

18,394,080

19,408,280

19,867,300

Paper consumption in
offices (Head Office)one million
pieces

8.72

8.73

7.71

Proportion of domestic
e-banking businessvolume

%

97.7

94.86

92

6.6

6.6

——

——

943

——

——

Among 28
categories ofcentralized
procurement file,
21 of them in
online electronic
form

——

Developing
Developing
new modes of new modes ofenergy saving energy saving
and emission and emission
reduction
reduction——

Voluntary afforestation fee
RMB10,000of the Head Office
Green food enterprises
settled in ICBC Mall

NumberIT application in
procurement file
management

Environmental
protection
measures——

Other environmental
protection measures

48——

Special Report on Green Finance 2018——

Paperlesscounter
operation

Paperlesscounter
operation————

Promotingresponsible
procurement

Promotingresponsible
procurement————awarenessof greenoperation————

Figure 1 Greenhouse Gas Emissions of ICBC’s Institutions in Beijing(Unit: Tons)
60000

50648.72

50000

49518.32

50769.94

40000
30000
20000
10000

3281.252955.55

2878.66

0

2018

2017

Direct greenhouse gas
emission (carbon dioxide)2016

Indirect greenhouse gas
emission (carbon dioxide)

Table 2 Statistics of Waste from Business Activities of ICBC’s Beijingbased Institutions

Item

2018

2017

2016

Microcomputer (host)

524

642

1541

Display

320

304

1331

Laptop

158

496

749

Printer

195

148

251

Server0

28

3

Others

82

37

118

Note: ICBC’s Beijing-based institutions include the Head Office, the Business Research andDevelopment Center and the Software Development Center.

Industrial and Commercial Bank of China Limited

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50

Special Report on Green Finance 2018

05
Green Studies

Industrial and Commercial Bank of China Limited

51

GreenEnvironmental protection
Finance

52

Special Report on Green Finance 2018

Assuming important duties as a member of theGreen Finance Committee of China Society for
Finance and Banking
ICBC is the deputy director unit of Green Finance Committee (GFC) of China
Society for Finance and Banking, and is also among the first member units joining
the GFC. Since ICBC joined the GFC, it has spared no effort to support the workof the GFC and taken the initiative to undertake various tasks. Under the guidanceof the GFC, ICBC completed a number of global leading researches, including
stress testing and ESG index, thus making sure that China stays ahead in the area ofenvironmental risk analysis. ICBC cooperated with other members of the GFC tojointly complete the first series of books relating to global green finance. Covering
topics such as international green finance, Chinese green finance, environmental
risk analysis and management, the books provide the first systematic theoreticalresearch and case analysis concerning green finance. As a member of the Green
Finance Working Group (the predecessor of GFC), ICBC, together with othermembers, jointly put forward 14 proposals to improve China’s green finance system,
most of which have been adopted by policy-makers and built into the Guidelines
on Building a Green Financial System issued by seven ministries and commissions,
including the PBOC and the National Development and Reform Commission
in 2016. Within the framework of China-UK green finance cooperation, ICBC
organized China’s pilot financial institutions to conduct environmental information
disclosure, and effectively promoted international cooperation regarding green
finance, demonstrating its ability and willingness to undertake responsibilities as a
global leading bank and the largest state-owned commercial bank in China.

Studying the building of a strategy system
for green finance of commercial banks
In 2015, ICBC studied the building of a strategy system for green finance.
Based on comprehensive analysis of green finance strategies, rules, methods
and products of international and domestic leading commercial banks, ICBC
put forward the overall framework for China’s commercial banks to build
their own strategic systems for green finance. This study is foresighted, andprovides reference for the establishment of a strategic framework for green
finance by Chinese commercial banks.

Industrial and Commercial Bank of China Limited

53

Writing green finance-themed monograph, which
was highly recognized by the industry

ICBC, in conjunction with the GFC and other institutions, jointly compiled the Case Studies ofGreen Finance in China (Version 2016), the Case Studies of International Green Finance (Version2017), and the Environmental Risk Analysis by Financial Institutions (Version 2018). The Case
Studies of Green Finance in China was awarded the “Book of the Year” by China BusinessNetwork. The Case Studies of International Green Finance was selected as one of the “Top 10
Financial Books in 2017” by the China Banking Development Forum. The Environmental Risk
Analysis by Financial Institutions was highly recognized by regulatory authorities and regarded
as an important achievement made by the G20 sustainable finance study group. The three casestudies analyze and sort out the typical cases of green finance in China and the world, introduce
the environmental risk analysis theories, models and methods, and contribute to the building ofgreen finance capacity in China and other countries. ICBC has also prepared the China Green
Finance Development Research Report with China Renmin University. Gu Shu, President of
ICBC, and Liu Wei, President of China Renmin University, served as senior academic advisors of
the report. This report brings together the wisdom of the banking industry and academia. It is not
only a comprehensive summary of the latest developments in China’s green finance, but also an indepth analysis of hotspots and issues of focus, providing important references for policy-making
departments, financial institutions, enterprises, and the academia.

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Special Report on Green Finance 2018

Taking the lead in environmental information
disclosure pilot and actively participating in thesetting of global standards for green financeAs the concept of green finance is moreembraced by the people, the disclosureof environmental information of financial
institutions has drawn more attention.
At the 9th China-UK Economic andFinancial Dialogue held on December 15,
2017, the two governments encouraged
Chinese and British financial institutions
to jointly conduct pilot disclosure ofenvironmental information. As the
Chinese institution in charge, ICBC
organized other chinese pilot institutions
to jointly carry out pilot work with the UK. ICBC took the lead in conducting pilot disclosureof environmental information. It not only blazed a trail for domestic financial institutions indisclosing such information, but also provided practical support for international peers.
Since 2018, ICBC has organized Chinese pilot institutions to conduct in-depth research on theframework, principles and practices of international climate and environmental information disclosure,developed the Plan for Environmental Information Disclosure pilot of Chinese Financial Institutions
considering China’s conditions, and issued a three-phase action plan. It developed the Target
Framework for Environmental Information Disclosure of Chinese Financial Institutions, clarifying thequalitative information and quantitative indicators for disclosure. It urged all pilot institutions to carryout environmental information disclosure independently based on the pilot action plans and target
framework. On November 30, 2018, ICBC, on behalf of China’s pilot institutions, jointly released
the Report on the Progress of Pilot Disclosure of Climate and Environmental Information of Chineseand British Financial Institutions in 2018 (available on www.greenfinance.org.cn/displaynews.
php?id=2381) with the UK, revealing the progress and achievements made in pilot work to date. Pilot
institutions from China and the UK introduced their improvements made in environmental information
disclosure in the form of case study.

Industrial and Commercial Bank of China Limited55

Joining the UNEP FI core task force to deeply
participate in global governance
In April 2018, the United Nations Environment Programme Financial Initiative (UNEP
FI), entrusted by UNEP, announced the launch of the Principles for Responsible
Banking. ICBC, as the only Chinese bank invited by UNEP FI, joined the core task
force together with other 27 banks worldwide for the drafting of the Principles. The
Draft Principles for Responsible Banking were already published worldwide at the
UNEP FI Global Roundtable held in Paris, France on November 26, 2018, and will
formally become effective in September 2019. Then, the Principles, together with
the Principles for Responsible Investment (PRI) and the Principles for Sustainable
Insurance (PSI), will become an important reference for the financial industry to fulfill
the 2030 Sustainable Development Goals of the UN and the Paris Climate Agreement.
In the formulation of the principles, ICBC actively publicized the latest improvements
made by China’ banking industry in green finance. ICBC’s studies on ESG rating andgreen index have been included in the “Implementation Guidance” of the Principles as
excellent cases, fully demonstrating the image of ICBC as a large responsible bank in
the fields of sustainable development and green finance.

Developing the Belt and Road green finance(investment) index
Green development is an important principle under the Belt and Road Initiative. How
to proceed with green investment and green development under the Belt and Road
Initiative is an important subject that all parties involved need to work together tosolve. In response to this, ICBC and the Oxford Economics formed a research group
to develop the Belt and Road green finance (investment) index based on extensive
data of sample countries along the Belt and Road. As one of the major achievements
made at the 2nd Belt and Road Forum, the index is important in the following senses:
first, it will provide a set of assessment methods and quantitative tools to measure
the green development level and capacity of the countries along the Belt and Road
in a rule-based manner, help investors explore green investment opportunities andpromote international cooperation; second, the indicators set by the index have a big
coefficient of variation, indicating that the index is highly sensitive and distinctive,
and can better distinguish the level of green economic and financial development indifferent countries; third, it pools the collective wisdom of the Belt and Road regularinterbank cooperation mechanism, with ICBC, ICBC Standard Bank and EBRD
providing advanced experience and rich case studies of green finance, the Oxford teamcontributing its share of academic vision and research methods, the Export-Import
Bank of China, the Mizuho Bank, the Commerzbank, the UniCredit Bank, the Calyon
Bank, the ING Bank, etc. providing feedback and suggestions. The index was formallyreleased in 2019.

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Special Report on Green Finance 2018

Completing the “Study of Green Finance Policy
on Advancing the Green Development of theBelt and Road”
Since 2018, ICBC Urban Finance Research Institute and Tsinghua University
have jointly conducted the “Study of Green Finance Policy on Advancing theGreen Development of the Belt and Road”. The mid-term results of this study
have been published at the 2018 Global Climate Conference COP24. This report
has won the top prize of the Green Finance Paper Contest sponsored by GFC and
CFA in 2019. Based on the comprehensive analysis of the experience accumulated
by international organizations, governments and financial institutions in theirlong-term pursuit of green finance, this report has refined and generalized such
experience, and specially analyzed and illustrated those that can be used as areference for countries along the Belt and Road in developing green finance, andput forward targeted policy recommendations from different perspectives.

In terms of international exchanges and cooperation,
ICBC is committed to building itself into aninternational leading green bank, by drawing on
advanced international experience, advocating
and actively adopting international standards forsustainable development.
In 2012, ICBC was the first among Chinese commercial banks to join the UN
Global Compact. In 2014, it joined the UNEP FI. Besides, ICBC has maintainedsound communication and interaction with domestic and foreign financial
institutions, academic institutions and NGO organizations.

Industrial and Commercial Bank of China Limited

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Special Report on Green Finance 2018

06

Awards and Honors

Industrial and Commercial Bank of China Limited59

Caixin Media
Caixin - SGCX ESG50 Index Enterprise

Global Compact Network China
Best practice of the year in“realizing sustainable development goals”

Caijing
Evergreen Award for “Green Sustainable Development”

Asiamoney (Hong Kong)Best Green Commercial Bank in China

FinanceAsia (Hong Kong)Award for Best Green Bond in China

60

Special Report on Green Finance 2018

Jointly conferred by four ministries and commissions,
including the Ministry of Environmental Protection

Leading Enterprise in Energy Conservation during
the 11th Five-year Plan Period

Most Responsible Financial Institution

Most Respectable Enterprise in China

Low-carbon Role Model in China

Green Finance Award for Chinese Listed Companies

Award for Leading Environmentally Responsible
Chinese Listed Financial Company

Leading Enterprise in Realizing Sustainable
Development Goals

Industrial and Commercial Bank of China Limited

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TCFD Framework Content Index
GovernanceItema）Content
The Board of Directors’ monitoring on climate-relatedrisks and opportunities 		

b）

Page

10

The responsibilities of the Management in assessing
and managing climate-related risks and opportunities

11

Strategy
Itema）Content
The short, medium and long-term climate-related risks and			opportunities identified by organizations and institutions
b）

14-15

The impact of climate-related risks and opportunities on			business,strategy and finance of organizations and institutions
c）

Page

14-15

The strategic adaptability of organizations and institutions,taking into account various climate-related scenarios, including			
scenarios with a temperature of 2°C or lower

8-9、22

Risk management
Item		a）Content

Page

The process of identifying and assessing climate-related risks byorganizations and institutions
			

17-18

The process of managing climate-related risks by organizationsb）		
and institutions
			
c）

16-17

Description of how the process of identifying, assessing andmanaging climate-related risks can be integrated with the overallrisk management of organizations and institutions
			

16-18、20

Indicators and goals
Itema）Content

Page

Indicators used by organizations and institutions in assessing
climate-related risks and opportunities according to theirstrategies and risk management processes			b）Greenhouse gas emission and related risks in scopes 1 and 2(if applicable) and 3			c）26-29、48-49

Goals used by organizations and institutions in managing climate-

related risks and opportunities and the fulfillment of such goals			62

17-18		

Special Report on Green Finance 2018

16-17

Feedback Table
Thank you for reading the Special Report on Green Finance. In order to better
meet your reading needs, provide you and all stakeholders with more valuable
information, effectively implement ICBC’s philosophy of green operation, andfulfill our responsibility and mission of promoting green transformation of thereal economy with green finance, we earnestly hope that you can make valuablecomment on the report and provide it to us by:
Telephone: 010-66105355
Facsimile: 010-81013544
Email: CEIR@icbc.com.cn
Address: 121 C Xuanwumen West
Street, Xicheng District, Beijing
Zip code: 100031

1.Your overall comment on this report
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2.Which of the following stakeholders you belong to?

Government ○Regulator ○Shareholder or investor ○Partner ○Staff ○

Others ○3.To what extent do you think this report can meet your reading needs?

Very ○

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Average ○		 Poor ○4.How clear, accurate and complete do you think the information, data and indicators

disclosed in this report ?
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Relatively high ○Average ○Low ○5.To what extent do you think this report can effectively demonstrate the environmental

and social influence and contributions of ICBC’s green finance work?
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6.To what extent do you think the layout and design of this report are suitable for reading?

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7.Your suggestions on ICBC’s green finance work and this reportIndustrial and Commercial Bank of China Limited

63

Notes to the Report
Scope of the report:
Organization scope: This report covers the whole Group, focusing on the Industrial andCommercial Bank of China Limited.
Time frame: January 1-December 31, 2018, and some contents are beyond this time frame.

Principles for report preparation:
This report refers to the Recommendations of the Task Force on Climate-related Financial
Disclosure issued by the TCFD of the United Nations Financial Stability Board, theenvironment-related principles of the UN Global Compact, and the SDG of the UN, andmeets the Green Credit Guidelines issued by the CBRC, the Guidelines for Environmental
Information Disclosure of Listed Companies on Shanghai Stock Exchange issued by
Shanghai Stock Exchange, the Environmental, Social and Governance Reporting Guide
issued by the Stock Exchange of Hong Kong Limited and other relevant opinions
and guidelines.

Data:
Data used in this report is mainly from 2018, most of which is excerpted from the statistical
data of ICBC’s internal systems and branches. Unless otherwise provided, figures involvedin this report shall be in RMB.

Format:This report is released in hard and soft copies. The soft copy is available on the website of
ICBC. This report is published in Chinese and English. In the case of discrepancy between
the two versions, the Chinese version shall prevail.
Contact information:
ICBC Urban Finance Research Institute
Address: 121 C Xuanwumen West Street, Xicheng District, Beijing
Zip code: 100031
Telephone: 010-66105355
Facsimile: 010-81013544
Email: CEIR@icbc.com.cn

64Special Report on Green Finance 2018