Second-Party Opinion

Green Bond Framework for Industrial
and Commercial Bank of China
Evaluation Summary
Sustainalytics is of the opinion that the Green Bond Framework for Industrial andCommercial Bank of China (ICBC) is credible and impactful and aligns with the four
core components of the Green Bond Principles 2021. This assessment is based on thefollowing:
USE OF PROCEEDS The eligible categories for the use of proceeds– Renewable Energy, Clean Transportation, Energy Efficiency, andSustainable Water and Wastewater Management – are aligned withthose recognized by the Green Bond Principles 2021. Sustainalytics
considers that investments in the eligible categories are expected tocontribute to a low-carbon economy, primarily in China, and advance
the UN Sustainable Development Goals, specifically SDG 6, 7, 9, and
11.
PROJECT EVALUATION / SELECTION ICBC’s Green Bond Working
Group will oversee the internal process for evaluating and selecting
projects. The Green Bond Working Group is comprised ofrepresentatives from ICBC’s Asset & Liability Management
Department, Credit and Investment Management Department,
Corporate Banking Department and Modern Finance ResearchInstitute and other relevant departments. ICBC’s risk management
mechanism applies to all allocation decisions made under the
Framework. Sustainalytics considers the risk management system
to be adequate and the project selection process in line with market
practice.
MANAGEMENT OF PROCEEDS ICBC’s Asset & Liability
Management Department will oversee the processes for
management of proceeds. The green bond proceeds will bedeposited in ICBC’s general funding account and earmarked forallocation. This process will be tracked using a green bond register.
Pending allocation, unallocated proceeds will be held in accordancewith ICBC’s liquidity management policy in money market
instruments and green bonds issued by non-financial enterprises.
The Bank intends to reach full allocation within 12 months of eachissuance. This is in line with market practice.
REPORTING ICBC intends to report on the allocation and impact ofproceeds on its website on an annual basis until full allocation.
Allocation reporting will include the aggregate amount of proceeds
allocated to eligible projects, the balance of unallocated proceeds,
geographical distribution, and project examples and details where
feasible. In addition, ICBC is committed to reporting on relevant
impact metrics. Sustainalytics views ICBC’s allocation and impact
reporting as aligned with market practice.

© Sustainalytics 2021

Evaluation dateAugust 24, 2021

Issuer Location

Beijing, China

Report Sections
Introduction ........................................... 2
Sustainalytics’ Opinion........................... 3
Appendices ............................................ 9

For inquiries, contact the Sustainable
Finance Solutions project team:
Begum Gursoy (Amsterdam)
Project Manager
begum.gursoy@sustainalytics.com(+31) 20 205 0082
Flora Mile (Amsterdam)
Project Support
Amrita Kaur (Mumbai)
Project Support
Setch Chang (Shenzhen)
Client Relations
susfinance.apac@sustainalytics.com(+852) 3008 2391

Second-Party Opinion

Green Bond Framework for Industrial and Commercial Bank of China`

Introduction
Industrial and Commercial Bank of China (“ICBC”, the “Bank”, or the “Issuer”) is a banking services provider
headquartered in Beijing, China. The Bank was established in 1989 and offers deposits, loans, fundunderwriting, foreign currency settlement and other services to individuals, enterprises and others.
ICBC has developed the Green Bond Framework of Industrial and Commercial Bank of China (the“Framework”) under which it intends to issue green bonds and use the proceeds to finance or refinance, inwhole or in part, existing or future projects that are expected to contribute to a low-carbon economy,
primarily in China. The Framework defines eligibility criteria in four green areas:
1.
2.
3.
4.

Renewable Energy
Clean Transportation
Energy Efficiency
Sustainable Water and Wastewater Management

ICBC engaged Sustainalytics to review the Green Bond Framework for ICBC, dated August 2021, and provide
this Second-Party Opinion on the Framework’s environmental credentials and its alignment with the Green
Bond Principles 2021 (GBP).1 The Framework has been published in a separate document.2
Scope of work and limitations of Sustainalytics’ Second-Party Opinion
Sustainalytics’ Second-Party Opinion reflects Sustainalytics’ independent 3 opinion on the alignment of thereviewed Framework with the current market standards and the extent to which the eligible project
categories are credible and impactful.
As part of the Second-Party Opinion, Sustainalytics assessed the following:•••

The Framework’s alignment with the Green Bond Principles 2021, as administered by ICMA
The credibility and anticipated positive impacts of the use of proceeds; andThe alignment of the issuer’s sustainability strategy and performance and sustainability risk
management in relation to the use of proceeds.

For the use of proceeds assessment, Sustainalytics relied on its internal taxonomy, version 1.9.2, which isinformed by market practice and Sustainalytics’ expertise as an ESG research provider.
As part of this engagement, Sustainalytics held conversations with various members of ICBC’s management
team to understand the sustainability impact of their business processes and planned use of proceeds, aswell as management of proceeds and reporting aspects of the Framework. ICBC representatives haveconfirmed (1) they understand it is the sole responsibility of ICBC to ensure that the information provided iscomplete, accurate or up to date; (2) that they have provided Sustainalytics with all relevant information and(3) that any provided material information has been duly disclosed in a timely manner. Sustainalytics also
reviewed relevant public documents and non-public information.
This document contains Sustainalytics’ opinion of the Framework and should be read in conjunction withthat Framework.

The Green Bond Principles are administered by the International Capital Market Association and are available at https://www.icmagroup.org/greensocial-and-sustainability-bonds/green-bond-principles-gbp/.
2
The Green Bond Framework for ICBC is available on Industrial and Commercial Bank of China’s website at www.icbc-ltd.com.
3 When operating multiple lines of business that serve a variety of client types, objective research is a cornerstone of Sustainalytics and ensuring analyst
independence is paramount to producing objective, actionable research. Sustainalytics has therefore put in place a robust conflict management
framework that specifically addresses the need for analyst independence, consistency of process, structural separation of commercial and research(and engagement) teams, data protection and systems separation. Last but not the least, analyst compensation is not directly tied to specificcommercial outcomes. One of Sustainalytics’ hallmarks is integrity, another is transparency.
12Second-Party Opinion

Green Bond Framework for Industrial and Commercial Bank of China`
Any update of the present Second-Party Opinion will be conducted according to the agreed engagement
conditions between Sustainalytics and ICBC.
Sustainalytics’ Second-Party Opinion, while reflecting on the alignment of the Framework with market
standards, is no guarantee of alignment nor warrants any alignment with future versions of relevant market
standards. Furthermore, Sustainalytics’ Second-Party Opinion addresses the anticipated impacts of eligible
projects expected to be financed with bond and loan proceeds but does not measure the actual impact. The
measurement and reporting of the impact achieved through projects financed under the Framework is the
responsibility of the Framework owner.
In addition, the Second-Party Opinion opines on the potential allocation of proceeds but does not guarantee
the realised allocation of the bond and loan proceeds towards eligible activities.
No information provided by Sustainalytics under the present Second-Party Opinion shall be considered as
being a statement, representation, warrant or argument, either in favour or against, the truthfulness,reliability or completeness of any facts or statements and related surrounding circumstances that ICBC has
made available to Sustainalytics for the purpose of this Second-Party Opinion.

Sustainalytics’ Opinion
Section 1: Sustainalytics’ Opinion on the Green Bond Framework for ICBC
Sustainalytics is of the opinion that the Green Bond Framework for Industrial and Commercial Bank of China
is credible, impactful and aligns with the four core components of the GBP. Sustainalytics highlights thefollowing elements of the Framework:•

Use of Proceeds:- The eligible categories – Renewable Energy, Clean Transportation, Energy Efficiency,
Sustainable Water and Wastewater Management – are aligned with those recognized by the
GBP. Sustainalytics notes that investments in the eligible categories is expected to contributeto a low-carbon economy, primarily in China.
- ICBC has disclosed to Sustainalytics that only CAPEX will be financed and/or refinanced under
the Framework.
- Under the Renewable Energy category, ICBC intends to invest in solar, wind, tidal, largehydropower, biomass, energy generation and transmission projects according to the following
eligibility criteria:▪
Hydropower projects are limited to those with lifecycle emissions below 100
gCO2e/kWh or power density above 5 W/m2. ICBC has confirmed to Sustainalytics
that for all new hydropower projects, an environmental and social impact assessment
will be carried out by a credible external body. Additionally, the Bank has confirmed to
Sustainalytics that: (i) ICBC will ensure that there is no significant risk or expected
negative impact identified by the environmental impact assessment and (ii) ICBC will
not invest in any projects with significant controversy.
▪
Biomass projects are limited to those with life-cycle emissions below 100
gCO2e/kWh. ICBC has confirmed to Sustainalytics that feedstock is limited toagricultural residues.
▪
Sustainalytics considers the above eligibility criteria in line with market practice.
- Within the Clean Transportation category, ICBC may invest in zero direct emission
transportation assets, systems, infrastructure and components including metro, rail, tram, bus
rapid transit systems and electric vehicles. Regarding the manufacturing of components, ICBC
has confirmed to Sustainalytics that financing will be limited to specialized parts that arededicated towards zero direct-emission transportation applications. In addition, in case of3

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Green Bond Framework for Industrial and Commercial Bank of China
`

•

•

•

providing loans to manufacturing facilities, financing will be limited to facilities that arededicated towards the production of equipment and components for zero direct-emission
transportation. Sustainalytics notes that ICBC excludes assets used for the transportation offossil fuel and mining products. This is in line with market practice.
- As part of the Energy Efficiency category, ICBC intends to invest in energy-efficient equipment,
products or technology, including energy-efficient lighting, chillers, smart grids and electricity
storage (battery and pumped hydro). Sustainalytics notes the following:▪ ICBC has confirmed that products and technology under this category will be electricor non-motorized; this is in line with market practice.
▪
For investment in energy-efficient products or technologies, ICBC is targeting projects
that result in at least 30% energy efficiency improvement. Sustainalytics views
positively the Framework’s inclusion of a defined energy efficiency threshold for the
installations of energy-efficient systems, equipment and technologies.
- Under the Sustainable Water and Wastewater management category, ICBC may invest in watercollection and treatment systems and facilities that improve water quality or water efficiency
through the collection, treatment, recycling or reuse of water and wastewater. ICBC has
confirmed to Sustainalytics that the Bank excludes treatment of waste from fossil fueloperations under the Framework. This is in line with market practice.
Project Evaluation and Selection:- ICBC has established a Green Bond Working Group comprised of representatives from various
Bank departments, including Asset & Liability Management Department, Credit and Investment
Management Department, Corporate Banking Department, the Modern Finance ResearchInstitute and other departments. The Working Group will meet annually to ensure the selected
projects are in line with the Framework’s eligibility criteria, facilitate reporting and managing
future updates to the Framework. Sustainalytics considers this process to be in line withmarket practice.
- ICBC has in place a risk management mechanism that incorporates environmental and social
risk factors in its risk assessment procedure and applies to all allocation decisions madeunder the Framework. Sustainalytics considers these environmental and social risk
management systems to be adequate and aligned with market expectation. For additional
detail, see Section 2.
Management of Proceeds:- The proceeds of the green bond will be deposited in the Bank’s general funding account andtracked using a separate Green Bond Register. ICBC’s Asset & Liability Management
Department will be responsible for overseeing this process. In the event that proceeds cannot
be fully allocated immediately after issuance, unallocated proceeds will be held in accordancewith the Bank’s liquidity management policy. The remaining unallocated proceeds will behandled in a manner complaint with relevant green bond standards of the issuing location andmay be held in instruments including money market instruments or green bonds issued by
non-financial enterprises. ICBC intends to reach full allocation within 12 months afterissuance.
- Based on the disclosure on management process and allocation timeframe, Sustainalytics
considers this process to be in line with market practice.
Reporting:- ICBC intends to report on the allocation and impact of proceeds on its website on an annual
basis until full allocation. Allocation reporting will include the allocated amounts per category,balance of unallocated proceeds, geographical distribution and project examples.
- In addition, subject to the nature of eligible green assets and availability of information, ICBC iscommitted to reporting on relevant impact metrics, including the amount of power generated
from renewable energy in kWh, GHG avoided in tCO2e, length of new tracks built in kilometers,
number of passengers, number of electric vehicles purchased, energy saved per year in kWh,percentage of energy efficiency achieved, amount of water saved, and amount of wastewater
treated.
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Green Bond Framework for Industrial and Commercial Bank of China`-

Based on the commitment to both impact and allocation reporting, Sustainalytics considers
this process to be in line with market practice.

Alignment with Green Bond Principles 2021
Sustainalytics has determined that the Green Bond Framework for ICBC aligns with the four corecomponents of the GBP. For detailed information, please refer to Appendix 1: Green Bond/Green Bond
Programme External Review Form.

Section 2: Sustainability Strategy of ICBC
Contribution of framework to ICBC’s sustainability strategy
ICBC is committed to promoting green finance through its business value of “green financing serving thereal economy”.4 In conjunction with its business value, the Bank set up a Green Finance Committee whichaims to contribute to the development of green finance products.
At the end of 2020, ICBC has granted RMB 1.85 trillion (USD 284.62 billion) of green credit in the areas ofenergy savings, environmental protection, clean energy, and infrastructure upgrades.4 Of the total loans
given to the power generation industry, 35% were provided for wind and solar power projects. 4 To support
China’s pollution control and ecological restoration measure, the Bank invested RMB 8 billion (USD 1.23
billion) in the national green development fund during 2020.4 The Bank will be financing the ecologicalrestoration of the right bank area of the Ba River, which upon completion will have restored an area of 3.23
km2. ICBC will be financing this project for 15 years with a total investment of RMB 2 billion (USD 307.69
million) to improve local environment and ecological development.4
Sustainalytics is of the opinion that the Green Bond Framework for ICBC is aligned with the Bank’s overallsustainability initiatives and will further ICBC’s actions on its key environmental priorities. Sustainalytics
recognizes the importance of the above-outlined ambitions and encourages ICBC to develop quantifiable
and time-bound sustainability targets, as well as a companywide sustainability strategy, to strengthen its
sustainability performance.
Well positioned to address common environmental and social risks associated with the projects
While Sustainalytics recognizes that the net proceeds from the bonds and loans issued under the
Framework will be directed towards eligible projects that are expected to have positive environmental
impact, Sustainalytics is aware that eligible projects financed under the Framework could lead to negativeenvironmental and social outcomes. Some key environmental and social risks associated with the eligible
projects could include occupational health and safety, community relations, land-use change andbiodiversity loss associated with infrastructure development. Furthermore, banks are exposed to risks offinancing environmentally and socially harmful businesses while offering lending services.
Sustainalytics is of the opinion that ICBC is able to manage and/or mitigate potential risks throughimplementation of the following:

4
5•

According to China’s Environmental Impact Assessment Act 5 , companies must perform anenvironmental risk assessment for all construction, reconstruction, expansion or refurbishment
projects during the initial phase of project design and feasibility analysis. The same Chinese law
also mandates that companies undergo an independent and certified environmental impact
assessment by an external agency to avoid a potential conflict of interest, including the interest of
local communities.

•

To regulate community relations and social risks, the Bank engages in communication with thestakeholders in matters concerning green credit and risk management. The Bank has interviewed

ICBC, “Corporate Social Responsibility Report”, (2020), at: http://v.icbc.com.cn/userfiles/Resources/ICBCLTD/download/2021/2020shzrEN202103.pdf
Law of the People’s Republic of China on Environmental Impact Assessment, at: https://www.waizi.org.cn/law/11686.html
5Second-Party Opinion

Green Bond Framework for Industrial and Commercial Bank of China`
customers, investors, shareholders, suppliers, peers and members of the public to identify key
topics for its sustainable development strategies.6 The Bank also meets the Chinese government’s
mandatory risk disclosure requirements and additionally discloses voluntary information to its
investors and stakeholders.
•

ICBC has a risk management committee, which continually improves the Bank’s risk management
framework and issues early warnings of risks. Additionally, the Bank issued the revised
requirements for administrative measures for due diligence of credit business for general
corporate customers in 2020, which requires that corporate credit customer managers should
regard environmental and social risks as an important part of the due diligence process.7•

In 2019, ICBC joined the United Nations Global Investors of Sustainable Development (UN GSID)
initiative.7As part of this initiative, all members pledged to take actions to promote global
investment and financing for sustainable development. The Bank is also a signatory to the
Principles for Responsible Banking of the United Nations Environment Programme Financial
Initiative. Following the Principles for Responsible Banking, the Bank must: (i) conduct impact
analysis on socio-economic and environmental impacts of its activities, (ii) set at least two targets
addressing the most material impacts aligned with the SDGs and Paris Climate Agreement, and (iii)publicly report on its progress.8•

For eligible green assets under the Framework, ICBC excludes all activities, assets, products andtechnologies that are associated with fossil fuel and nuclear technology.

Based on these policies, principles and assessments, Sustainalytics is of the opinion that ICBC has
implemented adequate measures and is well positioned to manage and mitigate environmental and social
risks commonly associated with the eligible categories.

Section 3: Impact of Use of Proceeds
All four use of proceeds categories are aligned with those recognized by the GBP and GLP. Sustainalytics
has focused on two where the impact is specifically relevant in the local context.
The Importance of financing renewable energy generation
China currently has a total installed renewable energy capacity of 895 GW.9 As of 2021, renewable sources
make up 42.4% of the total capacity and the country has set a target for renewable power to account forover half of total installed capacity by 2025. China is headed towards a low-carbon economy and aims toachieve carbon neutrality by 2060. From 2021 until 2025, China aims to reduce energy intensity by 13.5%
and carbon intensity by 18%.10 To move towards sustainable power generation in 2020, China generated an
additional 136 GW of wind and solar energy.11 In 2018, Chinese carbon emissions from energy generation
amounted to almost 10 gigatons of CO2.12 In the same year, 23.5% of particulate matter came from power
generation.13 The development of low-carbon electricity may decrease the carbon intensity and reduce
absolute GHG emissions. In 2019, fossil fuels accounted for 67.9% of the power generation in China.
Between 2019 and 2020, renewable energy output rose by 8.4% and steady growth is expected in the

ICBC, “Corporate Social Responsibility Report”, (2020), at: http://v.icbc.com.cn/userfiles/Resources/ICBCLTD/download/2021/2020shzrEN202103.pdf
ICBC, “ Special Report on Green Finance”, ( 2019), at: http://v.icbc.com.cn/userfiles/Resources/ICBCLTD/download/2020/lvseEN20201116.pdf
8 UNEP FI, “About the Principles”, at: https://www.unepfi.org/banking/bankingprinciples/more-about-the-principles/
9 Renew.biz, “China dominates installed renewable energy capacity”, at: https://renews.biz/69346/china-dominates-installed-renewable-energy-capacity/
10
Hill + Knowlton Strategies, “China’s 14th Five-Year Plan (2021-2025) Report” (2021), at: https://www.hkstrategies.com/en/chinas-14th-five-year-plan2021-2025-report/
11 IRENA, “ World Adds Record New Renewable Energy Capacity in 2020” (2021), at: https://www.irena.org/newsroom/pressreleases/2021/Apr/WorldAdds-Record-New-Renewable-Energy-Capacity-in-2020
12 Samantha, W., “CO emissions in China 2001-2019” (2021), at: https://www.statista.com/statistics/239093/co2-emissions-in-china/
2
13 Ling, T., “Air pollution emissions from Chinese power plants based on the continuous emission monitoring systems network” (2020), at:https://www.nature.com/articles/s41597-020-00665-1
6
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Green Bond Framework for Industrial and Commercial Bank of China`
coming years.14 Despite the growth, coal accounted for 64.7% of electricity production, following an increaseof 1.85% between 2018 and 2019, contrasting with investments to increase the share of renewables in
China’s energy mix.15
Based on the above, Sustainalytics notes that by financing electricity generation from renewable sources,
ICBC could further assist China in meeting its renewable energy added capacity targets and reduce its GHG
emissions.
Importance of supporting clean transportation practices in China
Emissions from the transportation sector accounted for more than 24% of global CO2 emissions in 2016 andare expected to grow at a faster rate than that of any other sector, which poses a major challenge toreducing emissions in line with the Paris Agreement.16 In China, the transportation sector accounts for 9% of
CO2 emissions. As of 2014, the transportation sector was the third-largest source of China’s energy-related
emissions.17 In 2019, 84.1% of China’s transportation emissions came from road traffic, which includes
freight transport and private vehicles.18 China aims to achieve carbon neutrality by 2060, having madesignificant strides in improving the overall efficiency of vehicles. However, such efficiency gains have been
offset by increased travel volumes. Decarbonizing the transportation sector to meet global and Chinese
climate targets requires placing the electrification of vehicles and the use of clean fuel sources as priorities
to achieving higher energy efficiency, GHG emissions reduction and air quality improvements.
Sustainalytics notes that the projects financed under the Framework, such as those aiming to promoteelectric or hydrogen-powered transportation assets, could assist China in establishing a low-carbon
transportation system.
Alignment with and contribution to SDGs
The Sustainable Development Goals (SDGs) were set in September 2015 by the United Nations General
Assembly and form an agenda for achieving sustainable development by the year 2030. The ICBC green
bond advances the following SDG goals and targets:
Use of Proceeds
Category

SDG

SDG target

Renewable Energy

7. Affordable and Clean
Energy7.2 By 2030, increase substantially the share of
renewable energy in the global energy mix

Clean Transportation

11. Sustainable Cities andCommunities

11.2 By 2030, provide access to safe,
affordable, accessible and sustainabletransport systems for all, improving roadsafety, notably by expanding public transport,with special attention to the needs of those invulnerable situations, women, children, persons
with disabilities and older persons

Argus, “China’s 2020 renewable energy output rises”, (2021) at: https://www.argusmedia.com/en/news/2182487-chinas-2020-renewable-energyoutput-rises
15 BP, “Statistical Review of World Energy 2020”, (2020), at: https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energyeconomics/statistical-review/bp-stats-review-2020-full-report.pdf
16 WRI, “Everything you need to know about the fastest growing source of global emissions: transport”, (2019), available at:https://www.wri.org/blog/2019/10/everything-you-need-know-about-fastest-growing-source-global-emissions-transport
17 Sebastian, I., “Decarbonising Transport in China”, at: https://www.changing-transport.org/project-kick-off-china-component-ndc-transport-initiative-forasia/
18 Beijing Review, “Decarbonizing China's transportation sector” (2021), at:
http://www.bjreview.com/Opinion/Voice/202103/t20210304_800238327.html
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Energy Efficiency

9. Industry, Innovation andInfrastructure

9. By 2030, upgrade infrastructure and retrofit
industries to make them sustainable, withincreased resource-use efficiency and greater
adoption of clean and environmentally soundtechnologies and industrial processes, with allcountries taking action in accordance with
their respective capabilities

Sustainable Water andWastewater
Management

6. Clean Water andSanitation

6.4 By 2030 substantially increase water-use
efficiency across all sectors and ensuresustainable withdrawals and supply offreshwater to address water scarcity andsubstantially reduce the number of people
suffering from water scarcity

Conclusion
ICBC has developed the Green Bond Framework for ICBC under which it may issue green bonds and use theproceeds to finance or refinance renewable energy, clean transportation, energy efficiency, and sustainable
water and wastewater management projects. Sustainalytics considers that the projects funded by the green
bond proceeds are expected to contribute to a low-carbon economy, primarily in China.
The ICBC Green Bond Framework outlines a process by which proceeds will be tracked, allocated, andmanaged, and commitments have been made for reporting on the allocation and impact of the use ofproceeds. Furthermore, Sustainalytics believes that the ICBC Green Bond Framework is aligned with theoverall sustainability strategy of the company and that the green use of proceeds categories will contributeto the advancement of the UN Sustainable Development Goals 6, 7, 9, and 11. Additionally, Sustainalytics isof the opinion that ICBC has adequate measures to identify, manage and mitigate environmental and social
risks commonly associated with the eligible projects funded by the use of proceeds.
Based on the above, Sustainalytics is confident that Industrial and Commercial Bank of China is wellpositioned to issue green bonds and that the Green Bond Framework for ICBC is robust, transparent, and inalignment with the four core components of the Green Bond Principles 2021.

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Appendices
Appendix 1: Green Bond / Green Bond Programme - External Review Form
Section 1. Basic Information
Issuer name:

Industrial and Commercial Bank of China

Green Bond ISIN or Issuer Green Bond Framework
Name, if applicable:

Green Bond Framework for ICBC

Review provider’s name:

Sustainalytics

Completion date of this form:

August 24, 2021

Publication date of review publication:

Section 2. Review overview
SCOPE OF REVIEWThe following may be used or adapted, where appropriate, to summarise the scope of the review.
The review assessed the following elements and confirmed their alignment with the GBP:☒

Use of Proceeds☒

Process for Project Evaluation and
Selection☒

Management of Proceeds☒

Reporting

ROLE(S) OF REVIEW PROVIDER☒

Consultancy (incl. 2nd opinion)☐

Certification☐

Verification☐

Rating☐Other (please specify):
Note: In case of multiple reviews / different providers, please provide separate forms for eachreview.

EXECUTIVE SUMMARY OF REVIEW and/or LINK TO FULL REVIEW (if applicable)
Please refer to Evaluation Summary above.

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Section 3. Detailed review
Reviewers are encouraged to provide the information below to the extent possible and use the comment
section to explain the scope of their review.
1. USE OF PROCEEDS
Overall comment on section (if applicable):
The eligible categories for the use of proceeds – Renewable Energy, Clean Transportation, Energy
Efficiency, and Sustainable Water and Wastewater Management – are aligned with those recognized by theGreen Bond Principles 2021. Sustainalytics considers that investments in the eligible categories are
expected to contribute to a low-carbon economy, primarily in China, and advance the UN Sustainable
Development Goals, specifically SDG 6, 7, 9, and 11.

Use of proceeds categories as per GBP:☒

Renewable energy☒

Energy efficiency☐

Pollution prevention and control☐

Environmentally sustainable management ofliving natural resources and land use☐

Terrestrial and aquatic biodiversity
conservation☒

Clean transportation☒

Sustainable water and wastewater
management☐

Climate change adaptation☐

Eco-efficient and/or circular economy
adapted products, production technologies
and processes☐

Green buildings☐

Unknown at issuance but currently expected
to conform with GBP categories, or othereligible areas not yet stated in GBP☐

Other (please specify):

If applicable please specify the environmental taxonomy, if other than GBP:

2. PROCESS FOR PROJECT EVALUATION AND SELECTION
Overall comment on section (if applicable):
ICBC’s Green Bond Working Group will oversee the internal process for evaluating and selecting projects.
The Green Bond Working Group is comprised of representatives from ICBC’s Asset & Liability Management
Department, Credit and Investment Management Department, Corporate Banking Department and Modern
Finance Research Institute and other relevant departments. ICBC’s risk management mechanism applies to10Second-Party Opinion

Green Bond Framework for Industrial and Commercial Bank of China`
all allocation decisions made under the Framework. Sustainalytics considers the risk management system
to be adequate and the project selection process in line with market practice.
Evaluation and selection☒

Credentials on the issuer’s environmental
sustainability objectives☒

Documented process to determine thatprojects fit within defined categories☒

Defined and transparent criteria for projects
eligible for Green Bond proceeds☒

Documented process to identify andmanage potential ESG risks associatedwith the project☒

Summary criteria for project evaluation andselection publicly available☐

Other (please specify):

Information on Responsibilities and Accountability☒

Evaluation / Selection criteria subject toexternal advice or verification☐

Other (please specify):☐

In-house assessment

3. MANAGEMENT OF PROCEEDS
Overall comment on section (if applicable):
ICBC’s Asset & Liability Management Department will oversee the processes for management of proceeds.
The green bond proceeds will be deposited in ICBC’s general funding account and earmarked for allocation.
This process will be tracked using a green bond register. Pending allocation, unallocated proceeds will beheld in accordance with ICBC’s liquidity management policy in money market instruments and green bonds
issued by non-financial enterprises. The Bank intends to reach full allocation within 12 months of eachissuance. This is in line with market practice.
Tracking of proceeds:☒

Green Bond proceeds segregated or tracked by the issuer in an appropriate manner☒Disclosure of intended types of temporary investment instruments for unallocatedproceeds☐

Other (please specify):

Additional disclosure:☐

Allocations to future investments only☒

Allocations to both existing and future
investments☐

Allocation to individual disbursements☒

Allocation to a portfolio of11

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Green Bond Framework for Industrial and Commercial Bank of China`
disbursements☒

Disclosure of portfolio balance of
unallocated proceeds☐

Other (please specify):

4. REPORTING
Overall comment on section (if applicable):
ICBC intends to report on the allocation and impact of proceeds on its website on an annual basis until full
allocation. Allocation reporting will include the aggregate amount of proceeds allocated to eligible projects,
the balance of unallocated proceeds, geographical distribution, and project examples and details where
feasible. In addition, ICBC is committed to reporting on relevant impact metrics. Sustainalytics views ICBC’s
allocation and impact reporting as aligned with market practice.
Use of proceeds reporting:☐

Project-by-project☒

On a project portfolio basis☐

Linkage to individual bond(s)☐Other (please specify):

Information reported:☒

Allocated amounts☐

Other (please specify): balance of
unallocated proceeds☐

Green Bond financed share of total
investment☐

Semi-annual

Frequency:☒

Annual☐Other (please specify):

Impact reporting:☐

Project-by-project☒

On a project portfolio basis☐

Linkage to individual bond(s)☐Other (please specify):

Information reported (expected or ex-post):☒

GHG Emissions / Savings☒

Energy Savings☐

Decrease in water use☐

Other ESG indicators (please
specify): length of new tracks
built in (kilometersm),
number of passengers,
12Second-Party Opinion

Green Bond Framework for Industrial and Commercial Bank of China`
amount of water saved, andamount of wastewater
treated.
Frequency☒

Annual☐Other (please specify):☐

Semi-annual

Means of Disclosure☐

Information published in financial report☐

Information published in sustainability
report☒Information published in ad hoc
documents☐

Other (please specify):☐

Reporting reviewed (if yes, please specify which parts of the reporting are subject toexternal review):

Where appropriate, please specify name and date of publication in the useful links section.
USEFUL LINKS (e.g. to review provider methodology or credentials, to issuer’s documentation, etc.)
www.icbc-ltd.com.

SPECIFY OTHER EXTERNAL REVIEWS AVAILABLE, IF APPROPRIATE
Type(s) of Review provided:☐

Consultancy (incl. 2nd opinion)☐

Certification☐

Verification / Audit☐

Rating☐Other (please specify):

Review provider(s):Date of publication:

ABOUT ROLE(S) OF INDEPENDENT REVIEW PROVIDERS AS DEFINED BY THE GBPi.

Second-Party Opinion: An institution with environmental expertise, that is independent from the issuer may
issue a Second-Party Opinion. The institution should be independent from the issuer’s adviser for its Green
Bond framework, or appropriate procedures, such as information barriers, will have been implemented
within the institution to ensure the independence of the Second-Party Opinion. It normally entails anassessment of the alignment with the Green Bond Principles. In particular, it can include an assessment of
the issuer’s overarching objectives, strategy, policy and/or processes relating to environmental
sustainability, and an evaluation of the environmental features of the type of projects intended for the Use ofProceeds.
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Green Bond Framework for Industrial and Commercial Bank of China`
ii.

Verification: An issuer can obtain independent verification against a designated set of criteria, typicallypertaining to business processes and/or environmental criteria. Verification may focus on alignment withinternal or external standards or claims made by the issuer. Also, evaluation of the environmentally
sustainable features of underlying assets may be termed verification and may reference external criteria.
Assurance or attestation regarding an issuer’s internal tracking method for use of proceeds, allocation offunds from Green Bond proceeds, statement of environmental impact or alignment of reporting with the
GBP, may also be termed verification.

iii.

Certification: An issuer can have its Green Bond or associated Green Bond framework or Use of Proceeds
certified against a recognised external green standard or label. A standard or label defines specific criteria,
and alignment with such criteria is normally tested by qualified, accredited third parties, which may verify
consistency with the certification criteria.

iv.

Green Bond Scoring/Rating: An issuer can have its Green Bond, associated Green Bond framework or a key
feature such as Use of Proceeds evaluated or assessed by qualified third parties, such as specialised
research providers or rating agencies, according to an established scoring/rating methodology. The output
may include a focus on environmental performance data, the process relative to the GBP, or anotherbenchmark, such as a 2-degree climate change scenario. Such scoring/rating is distinct from credit ratings,
which may nonetheless reflect material environmental risks.

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Green Bond Framework for Industrial and Commercial Bank of China`

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About Sustainalytics, a Morningstar Company
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