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Special Report on Green FinanceSpecial Report on Green Finance Industrial and Commercial Bank of China Limited

All rights reserved. Reproduction without permission is prohibited.
55 Fuxingmennei Avenue, Xicheng District, Beijing, China Post code: 100140
www.icbc.com.cn,wwwiicbc-ltd.com

Industrial and Commercial
Bank of China Limited2019Foreword / 4		

04

Green Operation
Transformative Development

01
Strategic GuidanceGreen GovernanceGreen Operation / 33
Environmental Protection / 38

Strategic Goal / 7
Governance Structure / 805
CONTENTS

Forward-looking ResearchInternational Communication

02
System Guarantee
Process Optimization

Forward-looking Research / 41
International Communication / 48

Policy and System / 11
Risk Management and Process / 13

06

Annual Achievements
Awards and Honors

03

Annual Awards / 52

Innovation-driven Development
Serving the Real Economy
Green Credit / 15
Green Bond / 19
Innovation Cases / 23

07
Appendices
TCFD Framework Content Index / 54
Feedback Form / 55
Instructions / 56

Foreword
At present, as the climate and environmental
issues are getting more and more acute, it has
become the common goal and responsibilityof global financial institutions to promote
the financing for the development of green
economy, so as to achieve the sustainable
development of human beings and nature.
In December 2015, the G20 Financial
Stability Board established the Task Forceon Climate-related Financial Disclosure(TCFD). In June 2017, it released a disclosure
framework covering governance, strategy, risk
management and indicators and goals, in a bid
to help investors, lenders, insurers and otherfinancial institutions assess climate-relatedrisks and opportunities, and reveal the actualand potential financial impact of climate factors
on financial institutions’ income, expenditure,
assets and liabilities, capital, investment andfinancing.
In recent years, China constantly pushedforward the building of a green financial systemthrough “top-down” promotion and “bottom-up”
grassroots exploration. It has continuously madenew breakthroughs in green financial reform
and innovation, and further achieved socialand environmental benefits from green finance.
Following the joint issuance of the Guidelines
on Building a Green Financial System, theseven ministries and commissions, including the
National Development and Reform Commission(NDRC) and the People’s Bank of China (PBC),
4

released the Green Industry Guidance Catalog (Version2019) in 2019, clarifying the standards for defining
green industries, and laying a solid foundation for
financial institutions to practice green finance.
Since 2007, ICBC has insisted on integrating social
responsibilities into its development strategy andbusiness management activities, actively practiced green
finance, and supported the green development of the real
economy through green finance products and services
such as green credit and green bond. It has deeply
conducted forward-looking research on green financial
products, actively participated in international exchanges
and cooperation, and contributed its wisdom andstrength. In 2017, ICBC became the first Chinese-fundedfinancial institution to sign a statement supporting the

TCFD framework proposal. Under the guidance of theGreen Finance Committee of China Society for Financeand Banking, ICBC, as the lead institution in China,
participated in the pilot project of Sino-UK financial
institution environmental information disclosure in
2018. Based on the exploration and practice in thesecond year after launch of the pilot project, this reportfully demonstrates ICBC’s efforts and achievements
made in the building of green finance within 2019 fromperspectives of governance, strategy, risk management,
product and business innovation, green operations,forward-looking research, and international exchanges
and cooperation, in light of the TCFD framework. It
also provides practice samples for Chinese financial
institutions to further carry out voluntary environmental
information disclosure.

TCFD Disclosure Recommendations
Governance

Strategy

Disclose the organization’s
governance around climate -relatedrisks and opportunities.

Disclose the actual and potential
impacts of climate-related risks andopportunities on the organization’s
businesses, strategy, and financial
planning where such information ismaterial.

Risk management
Disclose how the organization
identifies, assesses, and manages
climate-related risks.

Indicators and goals
Disclose the metrics and targets
used to assess and manage relevant
climate-related risks andopportunities where suchinformation is material.

Recommended Disclosures

Recommended Disclosures

Recommended Disclosures

Recommended Disclosuresa) Describe the board’s oversight ofclimate-related risks andopportunities.

a) Describe the climate -related risks
and opportunities theorganization has identified overthe short, medium, and longterm.

a) Describe the organization’s
processes for identifying andassessing climate-related risks.

a) Disclose the metrics used by theorganization to assess climate related risks and opportunities inline with its strategy and risk
management process.

b) Describe management’s role inassessing and managing climate related risks and opportunities.

b) Describe the impact of climate related risks and opportunities on
the organization’s businesses,
strategy, and financial planning.

b) Describe the organization’s
processes for managing climate related risks.

b) Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhousegas (GHG) emissions, and therelated risks.

c) Describe the resilience of theorganization’s strategy, taking
into consideration different
climate-related scenarios,
including a 2°C or lower scenario.

c) Describe how processes for
identifying, assessing, andmanaging climate-related risks
are integrated into theorganization’s overall risk
management.

c) Describe the targets used by theorganization to manage climate related risks and opportunities
and performance against targets.

5Strategic Guidance Green Governance01

In the reporting period, as the only Chinese bank among the sponsors of the Principles
for Responsible Banking (PRB) project of the United Nations Environment Programme
Financial Initiative (UNEP FI), ICBC signed the principles in the first batch. In October
2019, the Bank joined the Global Investors for Sustainable Development (GISD) Allianceof the United Nations and pledged to take six actions to promote investment and financing
business for global sustainable development. Meanwhile, as one of the drafters and the firstcontracted bank, ICBC joined the Belt and Road Green Investment Principles (GIP), the firstinternational principle of sustainable finance that China has participated in and sponsored.
The Bank is deeply aware of the far-reaching impact of climate, resources and environment
on economic and social development. During the reporting period, ICBC actively practiced
the vision of innovative, coordinated, green, and open development that is for everyone, andactively contributed to a model of modernization with humans developing in harmony withnature through its own financial practice.

Strategic Goal

Strategic GuidanceGreen Governance
Strategic Goal / 7
Governance Structure / 8

The Bank earnestly fulfilled the PRB, the commitments made as a GISD Alliance member, and the GIP, continuously
improved sustainable development strategies, effectively supported the sustainable development of the real economy,
especially the green industry, and promoted global sustainable development.
The Bank actively implemented the country’s concept of green development and sustainable development strategy,
deeply fulfilled the CPC Central Committee’s arrangements and requirements for pollution prevention and control,and comprehensively promoted green finance construction. It actively supported the development of green industries,
strengthened the prevention and control of environmental risk, and continued to advance low-carbon operation. It hasrealized the simultaneous improvement of economic, social and ecological benefits, and built the image of a large
responsible state-owned bank that guides the green financial development of domestic peers.

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

Business Philosophy
As the pioneer and leader in green finance, the Bank has always adhered to the business philosophy of promoting
the development of the real economy with green finance.

6

7

Special Report on Green Finance of Industrial and Commercial Bank of China for 2019

Strategic Guidance Green Governance

Implementation Path

Building the Bank’s green
financial strategic systemwith green concept inmind.

Strengthening green
innovation and enhancing
the Bank’s green financial
service capabilities.

Standardizing green
criteria and formulating
the Bank’s green financial
policies and systems.

Promoting green
development
and cultivating
the Bank’s green
financial corporate
culture.

Consolidating risk
management andimproving the Bank’senvironmental risk
prevention and control
mechanism.

Governance Structure
In line with the best social responsibility and sustainable financial practices, the Bank continuously explores thesustainable development path for enterprises, and keeps improving the green financial management system that
integrates strategic planning, division of responsibilities, system improvement, risk management, information
disclosure, capacity building and international cooperation. While highlighting the coordinated leadership of green
finance by the Board of Directors and the Senior Management, the Bank constantly strengthens the role of various
departments and institutions in the development of green finance.
In 2019, new steps were taken in improving the corporate governance system. With corporate governance as animportant cornerstone of business stability and sustainability, we continued to improve the governance structure
whereby the Board of Directors makes strategic decisions, the Board of Supervisors supervises in accordance with thelaw and the Management is responsible for running business under the overall leadership of the Party Committee, andconstantly optimized the operation mechanism featuring “scientific decision-making, effective supervision, and soundoperation”.
In 2019, the Board of Directors of the Bank established the Corporate Social Responsibility and Consumer Protection
Committee, clarifying that the main responsibilities of the committee include studying and reviewing the Bank’s
green finance strategy and making recommendations to the Board of Directors. The Compensation Committee of
the Board of Directors is responsible for assessing the implementation of green finance by the Senior Management
and embodying it in the performance assessment. The Audit Committee of the Board of Directors is responsible for
auditing the Bank’s environmental and social risks.

8

The Social Responsibility
and Consumer Protection
Committee is responsible
for studying andreviewing the Bank’s
green finance strategy andmaking recommendations
to the Board of Directors

Board ofDirectors
The Compensation
Committee is responsible
for assessing theimplementation ofgreen finance by the
Senior Management
and embodying it in theperformance assessment.

The Audit Committee is
responsible for auditing
the Bank’s environmental
and social risks.

The Senior Management is responsible for formulating the Bank’s green finance development strategy and long andmedium-term goals. The Green Finance Committee (GFC) is an auxiliary decision-making body for the Managementof the Head Office to implement coordinated leadership and promotion of green finance. It is responsible forcoordinating and promoting the green finance construction of various business lines and institutions of the Group,
supervising the implementation of green finance strategies and goals, and deliberating on or reviewing the Bank’s
strategic plan for green finance development, important policies and systems on implementation of green financestrategies, and reports on the Bank’s progress in green finance. The Secretariat of the GFC is set up in the Credit andInvestment Management Department of the Head Office.
Relevant business departments, under the leadership of the Credit and Investment Management Department of the
Head Office, are responsible for green finance work within their respective terms of reference. The Green Bond
Working Group is responsible for the Bank’s green bond issuance and other related work.

Senior Management

GFC

The Senior Management is
responsible for formulating
the Bank’s green financedevelopment strategy andlong and medium-termgoals.

The GFC is responsible forcoordinating and promoting thegreen finance construction of various
business lines and institutionsof the Group, supervising theimplementation of green financestrategies and goals, and deliberating
on or reviewing the Bank’s strategicplan for green finance development,
important policies and systems on
implementation of green financestrategies, and reports on the Bank’s
progress in green finance.

Relevant businessdepartments
Relevant businessdepartments, under theleadership of the Credit andInvestment Management
Department of the Head
Office, are responsible forgreen finance work within
their respective terms ofreference.

9

System Guarantee

02

Process Optimization

ICBC actively advocated the green finance principles, continued to energetically optimize
the basic institutional arrangements and processes for green finance, and actively explored
more green finance policy tools. It kept improving the responsibility mechanism andincentive mechanism, effectively identified, prevented and defused risks, and made effective
exploration to ensure there are rules to follow and promote the standardized and healthy
development of green finance.

Policy and System
In 2019, the Bank actively implemented the concept of sustainable development, with green financeas the strategic orientation of green development. Following the “top-down” promotion path, theBank constantly strengthened policy guidance, system standardization and establishment of guarantee
mechanism, and formed an effective positive incentive mechanism to guide its green financedevelopment.

System Guarantee
Process Optimization
Policy and System / 11

Revising and issuing the industry (green) credit policy on an annual basis according to
the new changes in the statistical standards of relevant national departments
According to the Green Industry Guidance Catalog (Version 2019) jointly issued by the State Development
and Reform Commission and other departments, such green economic fields as transportation and clean
energy were defined as the industries that investment and financing actively or moderately enter, and the Bankis encouraged to give priority to credit business in the field of green economy. The key indicators, such as
corporate process and technology, environmental protection and energy consumption, are incorporated into
the standards for industry and customer classification and project access, and differentiated credit policies are
implemented to effectively guide the “green adjustment” to the Bank’s investment and financing structure, andeffectively ensure the launch and implementation of green finance planning.

Risk Management and Process / 13
Building green finance requirements into the Bank’s business assessment system
Specially setting green credit evaluation indicators in the measures for assessing business performance anddevelopment of domestic branches, and pushing forward the implementation of green financial policies.

1011

Special Report on Green Finance of Industrial and Commercial Bank of China for 2019

Strengthening the top-level design to support the “ecological conservation and green
development” of the Yangtze River Economic Belt
In order to comprehensively improve the green financial services in the Yangtze River Economic Belt, theOpinions on Strengthening Financial Services for Green Development in the Yangtze River Economic Belt
were issued in 2019, aiming to enhance top-level design and organizational leadership, firmly advance thecoordinated development of institutions along the river, and resolutely support the ecological conservationand green development of the Yangtze River Economic Belt.

System Guarantee

Process Optimization

Risk Management and Process
The Bank strictly observes the bottom line of environmental and social risk compliance, resolutely implements
the “one-vote veto system” for environmental protection, and incorporates environmental and social risk factors
into the important evaluation content of customer and project risks as an important basis for credit decisionmaking. It continuously strengthens the management of investment and financing risks in environmentallysensitive areas, providing a strong guarantee for the development of green finance.

Revising due diligence management measures

Providing expense incentives based on assessment results
The Bank implemented the mechanism for linking the marketing expenses allocation with performanceassessment results of domestic branches, and specially set up the account of “marketing expense on
green credit assessment incentives”. It provided marketing expense incentives based on the green credit
assessment and scoring results of branches, so that branches with excellent assessment results can obtain
more marketing expense resources and attain the policy objectives.

The Bank issued the Administrative Measures for Due Diligence of Credit Business for General
Corporate Customers (Version 2019) in 2019 and revised the Measures in 2020, requiring that
corporate credit customer managers should regard environmental and social risks as an important partof due diligence, comprehensively evaluate the willingness, ability and historical records of customers
in management of environmental and social risks.

Comprehensively implementing the one-vote veto system for green credit

Building green finance requirements into the Bank’s procurement system
In the Administrative Measures for Centralized Procurement Suppliers (Trial), the “Social Responsibility”
category is separately listed in the industry qualification list, including product environmental label
certification, energy saving certification, social responsibility standard certification and pollution discharge
permit. In the open recruitment of centralized procurement suppliers, the Head Office put forward therequirements for suppliers’ social responsibilities:

Requirements for providing
social responsibility selfassessment

The briefing materials required for
application put forward the selfassessment requirements for “thecompany’s measures and effects infulfilling social responsibilities forenvironmental protection, energy
saving, occupational health andsafety, etc.”

12

Requirements for providing
social responsibility
qualifications andcertification information

The suggestive requirements in thequalification materials put forward
the content of “environmental
management system certification,
occupational health certification,
product environmental label
certification, energy saving
certification, social responsibility
standard certification, etc.”

Requirements for providing
the information on whether
the product has been includedin the energy saving andenvironmental protection list
for government procurement

In the information registration form
provided by the supplier, it is statedin the requirements for “commodity
information”: “please explain if thereported product has been includedin the government procurement
list of environmental-friendly orenergy-saving products.”

The Bank built green finance requirements into due diligence, project assessment, credit rating, review
and approval, contract signing, fund disbursement and post-lending/investment management andother procedures to strengthen monitoring, identification, mitigation and control of environmental andsocial risks. The one-vote veto system for green finance is implemented throughout the whole process.
In 2019, the Bank issued the Highlights of Green Credit Review and the Administrative Measures for
Due Diligence of Credit Business for General Corporate Customers to tighten requirements for key
areas.

Continuously strengthening risk prevention and control in environmentallysensitive areas
In 2019, the Notice on Strengthening Investment and Financing Risk Management in Environmentally
Sensitive Areas was issued, which puts forward targeted requirements on strengthening investment
and financing risk prevention and control for the key issues, including ecological environmental
protection in the Yangtze River Economic Belt, rectification of the chemical industry, overcapacity
industries’ expansion of production capacity in violation of regulations, increasingly stringent
approval of the right to use the sea areas for sea reclamation projects, pollution prevention and controlof heavy metal industries, and management of pollution discharge permit.

Actively conducting green credit audits and strengthening compliance management
In accordance with the relevant requirements of the Green Credit Guidelines issued by the China
Banking and Insurance Regulatory Commission (CBIRC), the Bank’s Internal Audit Bureau
conducted special audits on green credit on an annual basis. In 2019, it conducted special audits on
the green credit management of four tier-one branches in Liaoning, Shanxi, Anhui and Xinjiang by
offsite analysis and onsite audits. It selected 80 customers with green credits of RMB23.7 billion
as audit samples, and carefully conducted audits on the green credit business management, policy
implementation and major risks of relevant branches. The green credit audits achieved desired results,
and played a positive role in further enhancing the Bank’s green credit compliance management.

13

Innovation-driven Development

03

Serving the Real Economy

The Bank has always adhered to the business philosophy of promoting the development of
the real economy with green finance, focused on core business, innovated and developed
green services and products, and gave full play to the guiding role of finance. In supporting
the development of the real economy, the Bank stays true to the original aspiration andsupports the green development and transformation of the real economy with new concepts,
new finance and new services.

Green Credit
In 2019, the Bank insisted on prioritizing green credit in resource allocation, and organicallyintegrated low carbon, green, and environmental protection into its credit policy and businessphilosophy, to achieve simultaneous improvements in economic, social and ecological benefits.

Green credit scale

Innovation-driven Development
Serving the Real Economy

In 2019, the Bank earnestly implemented the deployment and requirements of the CPC Central
Committee and the State Council on pollution prevention and control, and continued to increase green
credit. The scale of green credit has increased year by year.
As at the end of December 2019, the Bank’s outstanding green credit granted to energy conservation andenvironmental protection projects and services, such as ecological protection, clean energy, energy conservationand environmental protection and resource recycling, reached RMB1,350.84 billion, an increase of RMB113.08
billion or 9.14% over the beginning of the year, 3.34 percentage points higher than the average growth ofcorporate loans.

Green Credit / 15
Green Bond / 19
Innovation Cases / 23
Green credit balance was
RMB

1,350.84

billion

Up RMB113.08
billion or 9.14% overthe beginning of the year14

3.34 percentage

points higher than
the average growth ofcorporate loans

15Special Report on Green Finance of Industrial and Commercial Bank of China for 2019

Green adjustment of credit structure
The Bank actively promoted the resolution of overcapacity contradictions. The Bank carried out classified customer
management for industries with excess capacity, such as steel, mainly supported the financing needs of high-quality
customers in technological transformation, transformation and upgrading, and accelerated the withdrawal of financing
from customers such as customers with backward production facilities and zombie companies.

Innovation-driven Development

Serving the Real Economy

Greenhouse Gas Emissions and Natural Resources Consumption Caused by the Bank’s
Investment and Financing Activities (Scope 3)

Green credit balance
Green credit balance（ RMB 100 million）

13508.38
12377.58
10991.99

As at the end of December 2019,
on- and off-balance sheet financing
of five industries with excess

decreasedby RMB11.94 billion from
capacities

the beginning of the year

2019

2018

2017

Comprehensively implementing regulatory requirements.
Organizing the green credit self-assessment. In 2019, the Head Office organized 23 departments of the Bank
to earnestly conduct green credit self-assessment. In 2018, the Bank won the title of excellent bank in the overall
evaluation of green banks, ranking first among major state-owned banks in terms of score. In 2019, the green credit selfevaluation score further increased over the previous year.
Implementing the green credit statistics system. The Head Office of ICBC has specially set up statistical fields in the
Global Credit and Agency Investment Management System (GCMS), and regularly counts and reports to the CBIRC andthe PBC the Bank’s financing in the green sector. In order to accurately reflect the Bank’s green industry loans, the Bank
completed the upgrading of the green loan statistical identification in the GCMS, in accordance with the requirements of
the PBC’s revised special statistical system for green loans.

Emissions reduced by changes in green credits
Equivalent to reduced emission of carbon
dioxide equivalent (10,000 tons)

Equivalent to reduced emission ofstandard coal (10,000 tons)

8985.968598.797561.874627.234643.974247.26

2019

16

2018

2017

2019

2018

2017

17

Special Report on Green Finance of Industrial and Commercial Bank of China for 2019Equivalent to reduced emission of COD(10,000 tons)

26.85

2019

23.31

2018

Innovation-driven Development

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

4.91

3.93

15.83

2017

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

2019

2018

1.61

2017

Equivalent to reduced emission of
nitrogen oxide (10,000 tons)

12.43
3.94

4.33

3.34

3.72

6.15

Green Bond
In 2019, the Bank thoroughly implemented the country’s decision and deployment on thedevelopment of green finance to support the building of beautiful China and the constructionof the green Belt and Road. By developing green bond issuance, investment, underwriting
and over-the-counter (OTC) bond business, the Bank channeled the funds to green industries.
While practicing the concept of green development, the Bank explored path to the innovationand development of green finance, ranked first in many areas in the country, and promoted thesustainable development of Chinese economy and global greening process.
Green Bond Issuance
In 2019, the Bank continued to make innovations and breakthroughs in the field of green bonds.
Through domestic and overseas branches, the Bank issued three green bonds in the regions, including
Singapore and Hong Kong, which are denominated in RMB, USD, euro and HKD. The proceeds will be
used to support the construction of green projects in the countries and regions along the Belt and Road.
These bonds include a Chinese-funded leasing green bond which was issued for the first time.

The total
amount is
equivalent to
USD

2.2

billion

2019

2018

2017

2019

2018

Serving the Real Economy

2017

In April 2019, the Bank, through Singapore Branch, issued
the world’s first green bond in RMB, USD and euro under the“Belt and Road” routine interbank cooperation mechanism,with an amount of USD2.2 billion.

All the proceeds will be used to support green projects along
the Belt and Road, including renewable energy, low-carbon
and low-emission transportation, and sustainable water
resources management.

Equivalent to saved water (10,000 tons)

The total
amount is
equivalent toUSD

5903.64

billion4290.42
3286.45

2019

18

2018

3.15

2017

In September 2019, the Bank, through Hong Kong Branch,issued the first global financial institution green bond withthe theme of “Guangdong-Hong Kong-Macao Greater Bay
Area”. The bond is denominated in USD, HKD and RMB,
with total proceeds of USD3.15 billion, the largest issue of all
green bonds of commercial banks in the world.

All the proceeds will be used to support green projects
along the “Guangdong-Hong Kong-Macao Greater Bay
Area”, including renewable energy, and low-carbon and lowemission transportation.

19

Special Report on Green Finance of Industrial and Commercial Bank of China for 2019

The Bank
successfully
issued600

USD
million overseas
green bondInnovation-driven Development

In November 2019, ICBC Leasing successfully issued
USD600 million worth of overseas green bond, the first
Chinese-funded leasing green bond in the international capital
market.

ICBC Leasing, as a wholly-owned subsidiary of ICBC,
actively practices the concept of green finance. As of the firstquarter of 2019, the company’s existing green assets exceeded
USD3.5 billion.

Green Bond Underwriting
The Bank actively engaged in green bond underwriting, guided various institutions to invest in green bonds, and actively
served the financing needs of international multilateral development institutions, financial institutions and non-financial
enterprises.

From 2016 to 2019, the Bank, as thelead underwriter, accumulatively
underwrote 32 green bonds, with a
total lead underwriting amount of
RMB61.36 billion, staying ahead in
the industry. Among them, six green
bonds were underwritten in 2019, withtotal proceeds of RMB34.4 billion. The
total lead underwriting amount was
RMB7.8 billion, of which the Bank, as
the lead underwriter, underwrote fourgreen bond financing instruments forcorporate customers in the interbank
market, with total proceeds of RMB4.4
billion.

6,166,900 tons of standard
coal is saved annually

China General
Nuclear Power
Corporation’s
USD600 million
green bond project
was awarded the“Best Green Bond in
China” by The Assetin 2019

Green Bond Investment and Sales

In 2019, the Bank, as the leadunderwriter, underwrote
six green bonds, with total

The Bank steadily supported the development of green finance through bond investment. It actively participatedin green bond investment under the premise that credit risk was controllable, and supported green projects, such asenergy saving, pollution prevention and control, resource conservation and recycling, clean transportation, clean
energy, ecological protection and adaptation to climate changes. As at the end of 2019, the balance of green bonds in
the Bank’s RMB banking book reached RMB27.07 billion. The Bank effectively channeled funds to resource-saving
technology development and ecological environment protection industries, and drew manufacturers’ attention to green
and environmental protection.

34.4

proceeds of RMB
billion16,055,700 tons of carbon dioxide
emission is reduced annually

All were used in clean transportation, clean energy, resource conservation and recycling, pollution
prevention and other green fields, saving 6,166,900 tons of standard coal and reducing 16,055,700 tons ofcarbon dioxide emission annually. Among them, “19 nuclear and wind power GN001” is the “first green
corporate perpetual note” in the interbank market. While meeting the financing needs of green enterprises,
it helps green enterprises reduce their debt ratios and optimize their financial structure.

20

Cases

ICBC International, as the joint global
coordinator or the joint book runner, has
successively completed the issuance of
ICBC Leasing USD green bond, filling thegaps in overseas green bonds in China’s
leasing industry; it assisted Wuhan Metroto successfully price the first overseas green
bond in China’s rail transport industry in
2019; it helped China General Nuclear
Power Corporation issue the first USD
green bond in China’s power industry, andcompleted a number of green bond projects
for financial institutions, such as China
Construction Bank Luxembourg Branch, andHong Kong Branch and Singapore Branchof ICBC. In 2019, the Bank accumulatively
underwrote green bonds of more than USD7
billion, an increase of 45% over the previous
year, and continued to maintain its industryleading position in the field of green bondunderwriting.

Serving the Real Economy

As at the end of 2019, the balance of green
bonds in the Bank’s RMB banking bookreached RMB27.07 billion

27.07
billionThe Bank steadily made foreign currency investment to meet enterprises’ fund demand. While ensuring its liquidity
was safe and risks were controllable, the Bank prudently made investment in foreign currency green bonds to promote
the development of energy-saving and environment-friendly enterprises. As at the end of 2019, the balance of investment
in foreign currency green bonds in the Bank’s banking book was approximately USD244 million, mainly including
the bonds issued by policy banks, commercial banks and central enterprises, in an effort to meet the fund demand fordeveloping domestic and global green industry.

21

Special Report on Green Finance of Industrial and Commercial Bank of China for 2019

The Bank actively developed OTC green financial bond business. Under the premise that risks were

controllable, the Bank actively participated in the implementation of the concept of green finance,
motivated institutional and individual customers to invest in and trade green bonds, guided them toenhance the awareness of green investment, and broadened the sources of green finance funds. From2017 to 2019, the Bank sold RMB green finance bonds, with a total amount of RMB1.2 billion todomestic customers through the OTC channel, maintaining a leading position in the industry. Amongthem, RMB800 million worth of “Bond Connect”, the first green finance bond with the theme ofsustainable development, was issued through the OTC channel in 2019, which effectively cultivated the
public’s awareness of responsible investment and helped expand the social effect of green finance.

800

RMB
million worth of “Bond Connect”, thefirst green finance bond with the theme of sustainable
development, was issued through the OTC channel in
2019

Link: Shandong Branch independently
underwrote Shuifa Group’s green
finance bond
In January 2019, RMB400 million
green medium-term note (MTN) of
Shuifa Group Co., Ltd. independently
underwritten by Shandong Branch of
the Bank was successfully issued. All
the raised funds were invested in thewater conservancy projects of such
categories as resource conservation
and recycling and pollution prevention
specified in the Green Bond Support
Project Catalog. This bond was thefirst green bond of a provincial stateowned enterprise in Shandong, which
not only effectively reduced thefinancing cost of the bond issuer, butalso demonstrated ICBC’s support forgreen environmental protection andassumption of social responsibility.

22

Link: Beijing Branch actively promoted green
bond marketing

In recent years, the Bank’s Beijing Branch focusedon promoting the development of green bondunderwriting, actively undertook green bond projects,
supported the construction of corporate green
environmental protection projects, and innovated bondunderwriting cooperation methods. In 2019, Beijing
Branch participated in the underwriting of the first
perpetual MTN issued by CGN Wind Power Co., Ltd.
in the interbank market. The proceeds of RMB1 billion
were used in the field of green and clean energy. The
branch actively underwrote multiple products, such as
green corporate bonds, green MTN, green perpetualbonds and green asset-backed notes, and established
a comprehensive direct financing service system forgreen finance. On the one hand, Beijing Branch closely
followed the innovation of the competent authorities,
carefully sorted out potential customers for green bondissuance, delivered product advantages in a timely
manner, looked for target customers, and strengthened
the promotion of green bonds at the earliest opportunity
after the launch of policies. On the other hand, it deeply
analyzed the actual needs of customers, effectively
integrated the demands of green bond and green energy
enterprises for “reduction of inventory and receivables,and deleveraging”, and timely raised suggestions on
issuance of personalized innovative products in a “oneto-one” manner.

Innovation-driven Development

Serving the Real Economy

Innovation Cases
In practice, the Bank strictly implements the industry’s green credit policy, explores
financial service support for comprehensive green credit products through multiple channels,
and actively provides financing support for ecological protection, clean energy, energy
conservation, environmental protection, resource recycling and other green economic fields
through various innovative green credit projects, in an effort to meet the diversified financing
needs of customers in technological transformation and upgrading, and green and low-carbon
development, and give a new impetus to China’s ecological advancement.

Clean Energy
Many institutions of ICBC actively support wind power construction projects
Wind energy is known as one of the most valuable green and environment-friendly new energy sources in the 21st
century. As a clean and renewable energy source supported by China, it meets the country’s energy industry policies,
local development plans and environmental protection requirements. The construction of wind farms can reducethe consumption of conventional energy, especially coal resources, and the emission of harmful gas, and protect theecological environment. It has obvious economic, social and environmental benefits.

Guangdong Branch
The Zhanjiang Wailuo Offshore Wind Farm project is the first large
megawatt-level offshore wind power project in Guangdong Province.
It was also the first time for China to apply a large-capacity antityphoon wind generating set of more than 5MW on a large scale.
After the project is completed, it can save about 148,100 tons ofstandard coal consumption annually. Guangdong Branch actively
promoted cooperation in wind power projects, which will help fully
tap the advantages of Guangdong’s marine resources, optimize theenergy structure, and quicken the development of the new energy
industry.

It can save about

148,100 tons ofstandard coal consumption
annuallyHenan Branch
The branch granted a loan for Huadian Fuxin Henan Branch’s Yiyang Zhangwu 50MW wind power project.
The project has a total investment of RMB410 million, including a loan of RMB309 million with a term of
15 years. The interest rate was set at the benchmark loan rate of the same period. The loan is an unsecured
credit, and the electricity fee charging right is pledged during the operation period. The project started
construction in October 2019 and was scheduled to be completed and put into operation in October 2020.

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Special Report on Green Finance of Industrial and Commercial Bank of China for 2019

Innovation-driven Development

Heilongjiang Branch
After the Ning’an Jingbo 49.5MW wind power project is put into operation, it is expected to save about
56,902 tons of natural coal, greatly reduce the emission of soot and discharge of waste water and waste
residue, which has obvious economic and social significance and can effectively promote the sustainable
development of the energy industry.

Serving the Real Economy

Karachi Branch conscientiously offers financial services for clean energy enterprises. First, in 2019, the branch
granted a total of USD40.5 million financing for Gezhou Dam’s SK Hydropower Project, assisted the customer
to make more than 300 payments, and smoothly helped the project achieve dam interception. After the project iscompleted, it can provide 3.2 billion kWh clean energy every year. Furthermore, it also has the comprehensivefunctions such as irrigation and flood control. Second, in 2019, the branch applied to the central bank for paying
guarantee fee and credit insurance fee 12 times and three times respectively and issue three L/G for three subsidiaries
of ZTE Energy (Photovoltaic) ABC. In the whole year, the project generated 490 million kWh electricity, solved thedaily electricity demand of 200,000 households in Pakistan, and created more than 3,000 jobs in the country. Besides,
it also trained a large number of local technicians.

ICBC (Argentina)
ICBC (Argentina) actively serves the launch of new energy projects of Chinese-funded enterprises.
It leveraged core advantages of wide coverage and deep penetration in the power industry to provide
intellectual and resource support for Goldwind Technology to open up the market. Meanwhile, when it
learned that the customer needed a letter of guarantee (L/G) during the project construction, the branch
actively cooperated with Xinjiang Branch to follow up the customer’s project progress and constructionneeds, and accumulatively issued USD117 million L/G for the customer, ensuring the smooth implementationof the wind power project and gaining customer recognition with efficient and high-quality services. It also
provided customers with integrated financial services, such as cash management, tax payment, and foreignexchange settlement and sales, assisted Chinese-invested new energy enterprises to take root in Argentina,
and promoted the development of Argentina’s new energy industry.

490 million kWhelectricity, solved the daily electricity demand of

200,000 households in Pakistan, and createdmore than 3,000 jobs in the country
Serving and supporting the phase-2 expansion project of EFELER geothermal power
project with the largest installed capacity in Turkey

Sydney Branch
The branch completed four new energy projects: Muniushan Wind
Farm, with an installed capacity of 144MW, which is expected tobe completed and put into operation in 2020. It is an important
breakthrough made by Sydney Branch in the development of renewableenergy projects. The branch provided a project loan without recourse
and another project with recourse; merger and acquisition (M&A) of
MacArthur Wind Farm, with an installed capacity of 420MW; M&A of
Xuezhen Phase II Wind Farm, with an installed capacity of 270MW;
AUD350 million financing for the AUD1.6 billion refinancing projectof State Power Investment Corporation’s Pacific Hydro. Following
many years of local operation, Sydney Branch has successfully
developed green finance into its competitive business. Since its opening,
the branch has successfully implemented a number of green financeprojects, benefiting customers, the society and enterprises.

In 2019, the project generated

Geothermal energy is a pollution-free and renewable clean energy. The project’s shareholder is a leading renewableenergy power supplier, with a total installed capacity of 828MW in operation. After the expansion, the installedcapacity of the EFELER geothermal project will increase to 259.9MW. Geothermal power generation has thefollowing advantages: Generally it does not need fuel, the cost of power generation, in most cases, is lower thanthat of hydropower, thermal power and nuclear power, equipment has a long service life, the investment in plant
construction is generally lower than that of hydropower stations, and power generation is stable. It does not produce
greenhouse gases, and can greatly reduce environmental pollution. ICBC (Turkey) participated in the EUR350
million syndicated loan for the project to facilitate the construction of renewable energy.

Project financing of
AUD

350million wasprovided

Financial support for hydropower clean energy projects
As a high-quality power source in new energy, pumped storage power stations can be used as important powersources to balance power grids, regulate the peak and fill the valley of electricity. It plays a very important rolein ensuring the safe and stable operation of power grids. At present, China has ranked first in the world in termsof the scale of installed capacity of pumped storage power stations under construction and in operation. In 2019,
Beijing Branch of the Bank energetically supported the construction of many pumped storage projects of State Grid
Xinyuan Co., Ltd. in Weifang of Shandong, Hami of Xinjiang, Qujiang of Zhejiang, Jurong of Jiangsu, and reached acomprehensive strategic partnership with them. It has effectively practiced the concept of green finance by providing
priority support for quality customers and key projects in the field of clean energy.

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Special Report on Green Finance of Industrial and Commercial Bank of China for 2019

Innovation-driven Development

Green upgrading of infrastructure

Serving the Real Economy

Energy saving and environmental protection industry

Providing a project loan for the “Phase-1 Project of the National Building Energy-saving
Technology International Innovation Park”
Hebei Green Building Technology Co., Ltd.’s national building energy-saving technology international innovation
park project (Phase 1) has a total investment of RMB1,280,299,600. The project covers an area of 700 mu and has
a total construction area of 300,000 square meters. After completion of the project, it will further establish Hebei
Province as a major province in the passive ultra-low energy construction industry, and will play a positive role inpromoting the transformation and upgrading of the traditional construction industry in the province and even thewhole country. In December 2019, Hebei Branch of the Bank went through the approval formalities for a RMB1
billion project loan, and granted RMB390 million for the project on December 23, 2019.

RMB

390million out ofServing major emerging industry projects and advanced manufacturing
As the largest foreign-invested manufacturing project ever in Shanghai, Tesla’s Shanghai Gigafactory project was
the first wholly foreign-owned new energy vehicle project in China, and also a typical project of China’s advanced
manufacturing industry that promotes high-level opening up and high-quality development. After the factory is fullycompleted and put into operation, its annual production capacity will gradually increase to 500,000 pure electricvehicles. In the future, Tesla will set up service centers in most parts of China. Since the start of the project, the Bank
has attached great importance to it and listed it as a major project of the Shanghai Branch in 2019. Through the indepth coordination of multiple lines of the Head Office and branches, the Bank has become a major financial service
provider of the project, relying on its advantages such as comprehensive structure design, reasonable financing
conditions, tailored bank-enterprise direct link, integrated and convenient settlement at home and abroad, and onepoint-to-country supply chain financial services, to serve the country’s new energy strategy and facilitate the green
economy to serve the advanced manufacturing industry.

the RMB 1 billion project
loan was granted upon
approval

A number of institutions assisted with local metro and rail transportation projects
Rail transportation projects have good social benefits and promote local people’s livelihood, economic and social
development. Qingdao Branch of the Bank participated in the syndicated loans for Qingdao’s metro lines 1, 4, 8 and
13, and Blue Silicon Valley intercity rail transportation project and other projects. It has approved a preliminary loan forthe metro line 6 project, and provided a credit line of RMB 13 billion for the construction of urban rail transportationin Qingdao. So far the branch has accumulatively granted RMB 3,168 million of project financing, providing a strong
financial guarantee for the city’s construction of urban rail transportation. The RMB 2 billion perpetual debt businessof Ningbo Branch gave an impetus to green travel in cities. It not only broadened financing channels for promoting
urban green and low-carbon development, but also helped companies effectively reduce debt ratios, met the demands
for business interests and stabilization of leverage, anddemonstrated ICBC’s capability and determination topromote urban green development and serve the real
economy. Guangdong Branch granted approximately
RMB 7 billion loans for the Guangzhou railtransportation project of Guangzhou Metro Group
Co., Ltd. Xiamen Branch recorded outstanding loansof RMB1,486 million for the city’s rail transportationgroup as at the end of 2019.

The first wholly foreignowned new energy vehicle
project in China

Annual production
capacity will gradually

500,000pureincrease to500,000

pure electric vehicles

Qinghai Branch worked with Aviation Services
Branch of Qinghai Airport Co., Ltd. of Western Airport
Group to jointly establish a “Senseless Passage”
smart parking project that meets the green travelneeds of C-end customers, and provide the customers
parking in the airport with greener, and more efficient,
diversified and convenient passage services. It isalso convenient for parking lot owners to enhance
management capabilities and reduce operating costs.
Shanxi Branch integrated Internet technology, smart
travel scenarios and banking services in an in-depth
and organic manner. In September 2019, it createda new senseless payment product system, which has
been put into service in 36 parking lots in the province
to improve the efficiency of green transportation ofvehicles.

26

27

Special Report on Green Finance of Industrial and Commercial Bank of China for 2019

Innovation-driven Development

Serving the Real Economy

Ecological environment governanceColumnProtecting the Erhai Lake for the benefit of the people-environmental governance of
the Erhai Lake basin
The Erhai Lake is the second largest freshwater lake in Yunnan Province, and the management of its ecologicalenvironment has a significant influence on the region’s ecological environment. In recent years, the environmental
carrying capacity and water quality of the Erhai Lake kept declining for various reasons. At present, the lake is at an
early stage of eutrophication and the “turning point” of protection and governance. It has been imperative to embark
on the protection and governance of Erhai Lake. The implementation of the second phase of the Erhai Lake Pollution
Interception Project in Dali City undertaken
by Dali Ecological Environment Investment
Co., Ltd. can effectively control and reduce thepollution load of the river basin, improve theenvironmental sanitation of the villages along
the Erhai Lake, quicken the pace of ecologicalprotection in the river basin, and promote thevirtuous cycle of the ecological environment of
the river basin. It is of great significance to thesustainable economic, social and environmental
development in the basin. The borrower
withdrew RMB420 million in September 2018,
and RMB128 million in March and September
2019 to replace the previous project loan.
The approval and granting of loans for thisproject has made a positive contribution to theenvironmental governance of the Erhai Lake
Basin in Dali City.

Supporting waste treatment in Ningbo through investment banking innovation projects
In the development of investment banking business, ICBC thoroughly implemented the concept of green finance,and strove to help enterprises improve the environment, reduce pollution, and promote the saving and efficient useof resources. The Bank actively expanded project investment and financing business in the fields of environmental
protection, energy conservation, clean energy, green transportation, green building, etc., promoted debt replacement
and optimization of large and medium environmental protection and energy saving enterprises through non-standard
debt financing and exchange asset securitization consulting services, and reduced debt ratios; it supported theacquisition and reorganization of superior environmental protection and energy saving enterprises through M&A
and restructuring consulting business, to eliminate the backward enterprises; it supported a number of environmental
protection and energy saving start-up enterprises and encouraged innovation through equity financing and direct
investment. With the vigorous advocacy and active promotion of the investment banking line, the Bank completed
a number of debt financing, M&As, direct equity investment and other boutique green investment banking projects,
greatly supporting green finance customers and winning a good social reputation. Nuoke Environmental Technology
Co., Ltd., established in April 2017, is a one-stop service provider for hazardous waste, integrating investment,
design, construction and operation. It mainly uses cement kilns to co-process waste, including hazardous waste
and contaminated soil. At present, the company has led more than 10 cement kilns to co-process hazardous waste
projects. Compared with the traditional professional incinerator and landfill process, the co-processing of hazardous
waste in cement kilns has less initial investment and lower operating costs, and is environmentally friendly. It plays
an important role in quickly filling in the gap of harmless disposal capacity of hazardous waste and accelerating such
harmless disposal in China. It is a sub-project of the Bank’s investment fund. In January 2019, a fund participated by
the Bank made an equity investment of RMB50 million in it.

28

Green finance innovation practice of institutions in
the National Green Finance Reform and Innovation
Pilot Zone
On June 14, 2017, the executive meeting of the State Council of China decided to build green finance reform
and innovation pilot zones with their respective roles and characteristics in five provinces (regions), namely,
Zhejiang, Jiangxi, Guangdong, Guizhou and Xinjiang. In terms of system and mechanism, they will explore
the experience that can be replicated and promoted to seek effective paths to further development of green
finance in China. Following the establishment of the first batch of green finance reform and innovation pilot
zones, in November 2019, Gansu Lanzhou New District was approved as a green finance reform and innovation
pilot zone. The establishment and expansion of the pilot zones indicates that China’s green finance has entereda new stage of development in which the top-down top-level design and the bottom-up regional exploration
promote and complement each other. It aims to effectively promote the development of green credit, explore
the establishment of the trading markets of pollution emission right, water right, energy use right and otherenvironmental rights, build a green credit system, and help financial institutions attain objectives, including
establishment of green finance business units or green sub-branches.
ICBC firmly supports the decision and deployment of the CPC Central Committee and the State Council, andactively participates in the development of green finance and the ecological advancement in the pilot zones.
Besides, ICBC has established financial strategic partnerships with the governments of various pilot zones,
continuously strengthened the construction of green credit guarantee system, and actively innovated green
finance products and services. It played the role of a major bank in the green development of the regional
economy.

Improving the allocation of green finance resources and supporting the green
development of the local economy
According to the actual development situation of each region, branches in the pilot zones strengthened the allocation ofand support for green finance resources by prioritizing the scale of green loans, implementing preferential interest rates
for green loans, and strengthening the performance assessment on green finance, which greatly supported the green
development of the local economy.
According to the economic structure, industrial characteristics and future development directions of the three pilot zones
in Hami City, Changji Prefecture and Karamay, Xinjiang Branch clarified the key points of support for the three pilot
zones. Hami Branch explored and supported the green transformation and upgrading of pillar industries such as newenergy, traditional industrial transformation and upgrading, and ecological agriculture; Karamay Branch seized the main
opportunities for the transformation and upgrading of resource-based cities, and vigorously promoted the innovationof green finance concept, models, products, services and management; Changji Branch focused on supporting green
transformation demonstration projects in three national parks, leading and key enterprises, and agricultural ecologicaldemonstration zones. Green finance of Guizhou Branch has spread to many regions in the province. First, in orderto leverage the high-quality tourist resource advantages of Huangguoshu and Wanfenglin to drive regional economic
development, the branch worked with ICBC Financial Asset Investment, a licensed institution of the Bank, to conduct
debt-for-equity swaps of Guizhou Huangguoshu Tourism Development Co., Ltd. and Xingyi City Wanfenglin Tourism

29

Special Report on Green Finance of Industrial and Commercial Bank of China for 2019

Group Co., Ltd., which are another measure to promote the important work deployment of “de-capacity, de-stocking,de-leveraging, cost reduction and improvement of underdeveloped areas”, and also the vivid practice of Guizhou Branchin the field of green finance. Second, for the Renhuai City’s domestic waste incineration power generation project, thebranch formed a syndicate with Shanghai Branch to jointly grant loans by pre-project loans and project loans, in order toprovide strong capital guarantee for the implementation of circular economy and ecological economy.

Optimizing the green finance service guarantee mechanism and strengthening themanagement of green operations throughout the whole process
First, optimizing the organization and management system. The Bank established green finance working groups or
green credit service providers in pilot zone branches, and green finance business departments in relevant tier-two
branches. Second, optimizing the credit process. Differentiated credit processes were adopted for green financeprojects.
The Bank has accumulatively approved
a total of RMB7,959 million onbalance sheet loans for green financebusiness in Gui’an New Area
Guizhou Branch set up the Green Finance Department of Gui’an Branch, and continuously followed up green
finance projects in light of relevant green finance policies of Gui’an New District Management Committee. It has
accumulatively approved on and off-balance sheet loans of RMB7,959 million for various green finance services in
Gui’an New District. The branch strengthened the differentiated resource guarantee for green loans in Gui’an pilot
zone by optimizing organizational management, reinforcing the allocation of green finance resources and improving
the management of green finance processes. So far it has basically attained the goals of green credit balance growthand business innovation. Besides, Guizhou Branch also assigned personnel to participate in the formulation of theGreen Finance Project Standards and Assessment Measures of Guizhou Province (Trial) led by Gui’an Management
Committee, and prepared the project demand reserve in a timely manner by connecting with the Gui’an Green Project
Library irregularly. The department has visited Gui’an Branch many times to conduct surveys on green projects, better
guided Gui’an Branch to carry out green finance-related investment and financing business, and specifically supported
the construction of Gui’an New District’s green finance reform and innovation pilot zone.
Zhejiang Branch applied to the Head Office for identifying Huzhou Branch as the first Head Office-level green financepilot bank of ICBC in China and obtained its approval. The branch established a green finance pilot bank contact
mechanism, focused on assistance and guidance, and carried out pilot and promotion work. It provided policy supportand resource guarantee in terms of credit scale, approval channel, green finance product innovation, risk management
indicators, and system construction. The branch supported the construction of green finance pilot zones, and continued
to urge Huzhou and Quzhou pilot branches to strengthen construction in respects of establishing and improving thegreen credit system and mechanism, bettering the green finance management structure, promoting the establishment ofgreen finance system standards, and innovating and optimizing green products and business models.
Guangzhou Branch continued to improve its system and mechanism. Huadu Sub-branch was officially upgraded to“Guangzhou Huadu Branch in Guangdong Green Finance Pilot Zone”. It set up a green finance development leadinggroup headed by the general manager of the branch and the Green Finance Department, formulated the measures forassessment of green credits, and pushed forward the development of green finance inan all-round way based on the priority allocation of green loans and preferential interest
rates. Additionally, the branch still paid more attention to credit risk and implemented
post-lending management requirements for outstanding credits. It strictly implemented
risk control measures throughout the entire process of green credit, including customer
access, investigation, examination, approval, loan review, and post-lending management,so as to ensure the quality of green credit assets.

30

Innovation-driven Development

Serving the Real Economy

Innovating green finance services and products and supporting the reform andinnovation of green finance in the pilot zones.
Relevant institutions in the green finance reform pilot zone gave full play to the Bank’s comprehensive advantages andenhanced financial product innovation on the basis of traditional on- and off-balance sheet business. Zhejiang Quzhou
Branch established an equity investment fund, mainly investing in high-quality enterprises in the fields of industrial
transformation and upgrading, environmental protection and energy conservation, resource recycling, new energy, etc.;
Jiangxi Branch established green industry orientation funds in cooperation with state-owned enterprises in Ganjiang
New District and its jurisdictions; Guangzhou Branch has launched, in an innovative way, Credit Guarantee Loan,
Quick Lending for Operation (online settlement microfinance and Shui Yi Tong), purchase and construction loans,business property loans, small business turnover loans, online revolving loans, quick loans for personal operations andother business varieties tailored to the needs of enterprises, in accordance with the green credit policy. It supported
the development of green enterprises, and increased green customers, with a total loans of over RMB2.7 billion. In
the future, the Bank will strengthen the promotion and publicity of online products, flexibly use various standardized
products, and provide financing for more inclusive small and micro enterprises. It launched supply chain financing in an
innovative way, and innovated product processes to provide supply chain financing for Dongfeng Nissan’s downstream
distributors across the country. It saved a large amount of financial costs for enterprises, thereby greatly stimulating
terminal sales, and promoting the healthy and stable development of Dongfeng Nissan’s green industry.

Green finance boosts poverty alleviation
Lucid waters and lush mountains are invaluable assets. Green finance has a close internal connection and diverse link
paths with poverty alleviation. The Bank effectively combined green finance with poverty alleviation, gave full play
to the advantages of green finance, and continuously innovated products and services. Based on the environmental
resources advantages of poverty-stricken areas, the Bank provided support for industries in accordance with local
conditions, and transformed the ecological advantages of impoverished mountainous areas into industrial advantages.
It exerted financial power to promote poverty alleviation and assist with the beautiful countryside construction. It has
explored a new sustainable model of green finance for poverty alleviation.
In light of China’s poverty alleviation strategy, the Bank continued to increase the input of financial resources into key
fields and weak links in rural areas, and did a good job in industrial support, customer cultivation and credit reserves tomeet the diversified and multi-level financial needs of rural revitalization and promote the integrated development ofurban and rural areas. The Bank actively helped modern agriculture grow bigger and stronger, provided financial support
for rural infrastructure connectivity, promoted the financing for the primary, secondary and tertiary industries in the rural
areas, vigorously expanded agricultural supply chain financing, and rendered agro-related customer services throughcorporate-private banking linkages.
In 2019, Guizhou Branch selected the thorn pear industry that could best lift the region and farmers out of poverty andintroduced government-led industrial poverty alleviation funds in conjunction with Guizhou Hongcai Investment Group
Co., Ltd., a strong local platform. It granted RMB100 million inclusive poverty alleviation industry loans through thecooperation model of “platform company + cooperatives + base + farmers”, participated in the development of the entire
industrial chain of the project, and facilitated the province’s poverty alleviation and ecological advancement. Guizhou
Green Industry Poverty Alleviation Investment Fund funded by the government invested RMB15.88 million, the branch
granted loans of RMB317 million, and the inclusive poverty alleviation industry loan reached RMB35 million.
Platformcompany

Cooperatives

Base

Farmers

Investment
+
Loan

31

Green Operation Transformative Development

04

Relying on financial technology, the Bank continued to explore, innovate and fuel green
development with cutting-edge technology. Through the deep integration of finance andtechnology, green operation, green office and green services have been realized. The Bankis actively pushing forward green transformation. Meanwhile, the Bank practiced thegreen concept, continuously enhanced awareness of environmental protection, insisted onorganizing and carrying out greening and environmental protection activities and related
public welfare activities, and earnestly fulfilled social responsibilities.

Green Operation
The Bank promoted green office, established the work style of diligence and thrift, strengthened the awarenessof saving, and achieved green and sustainable development. During the operation, the Bank strengthened
energy saving and emission reduction, paid close attention to energy management and control, optimized theoperation mode of important energy-consuming equipment through technology upgrading and equipment
transformation, and deeply widened the space of energy saving. The Bank actively implemented relevant policies
on energy saving and environmental protection, did a good job in implementing carbon emission right trading ofinstitutions in Beijing, honored commitment to energy saving and emission reduction, and continued to promote
the construction of “green bank”.

Green Operation
Transformative Development
Green Operation / 33
Environmental Protection / 38

At the same time, the Bank actively promoted the implementation of ECOS results of the smart banking
ecosystem, applied innovative technologies, integrated cutting-edge technologies with business scenarios,
conducted intensive operations, intelligent management and digital services, and promoted the green
transformation of bank operating models.

A green operation system was structured by online office relying on cutting-edge
technology.
With “paperless” office as an important means to promote green development and advocate green and low-carbon office,the Bank actively promoted paperless meeting and training, and established regular statistics system for green office.
In 2019, 22 domestic institutions of the Bank launched paperless conference systems, and PAD devices were used in
all the specialized meetings of the Head Office, saving nearly one million sheets of paper which weigh about 4.5 tons
throughout the year. The energy saving effect is obvious. Electronic, scenario-based and intelligent office iteration
has accelerated. New applications such as office building management, employee health management, and attendance
management have been developed, mobile office functions have been optimized, technology applications have beenstrengthened, and office efficiency has been continuously improved.

In 2019, the Bank saved nearlya million pieces of paper
weighing about

32

4.5 tons

33

Special Report on Green Finance of Industrial and Commercial Bank of China for 2019

Transmitting the concept of green finance through technology-based smart
banking.
In the reporting period, the Bank held the smart bank ecosystem ECOS launch conference, opening a new chapter inthe building of smart bank. Following the trend of financial technology development, the Bank focused on the Group’s
cross-border, cross-industry and cross-sector transformation and development, and pushed forward the building of asmart bank in light of the concept of “development driven by technology and innovation”. It made a blueprint of “ABCDI”(artificial intelligence, blockchain, cloud computing, big data and Internet of things) and other cutting-edge technologies,
developed a series of independent financial technology platforms with core intellectual property rights, and built a “dualcore” IT architecture with equal emphasis on host and open platform. The Bank provides customers with intelligent anddigital online financial services, which can save paper, save energy and reduce emissions, and transmit green financeconcepts to customers through smart banking.

Domestic e-banking
business volume
accounted for

98.1%

Link

The Bank strove to build the “No.1 Personal Mobile Bank” and launched the mobile banking
version 5.0, which provides customers with convenient, efficient, safe and green financial
services, relying on new technologies such as voice recognition, big data, artificial intelligence,and senseless authentication. In order to facilitate green finance to better serve small and microenterprises, the Bank launched corporate mobile banking version 2.0, which improved services
through smart customer service, smart interaction, smart reminders, and smart marketing. It
launched small and micro financial service platforms, e-Financial Security and other products toserve millions of small and micro customers. The Bank implemented the revision and upgradingof ICBC Mall Version 2.0, launched a new version of the mall and mobile merchant center, andcomprehensively improved the customer experience and intelligence level. Focusing on the main
entrance of the scenario and the positioning of the customer information service center, the Bank
launched ICBC Link Version 4.0 that has optimized and improved page layout and customer
services.
The Bank actively practiced the concept of green finance, and continuously improved the online
and intelligent financial services relying on cutting-edge technologies. It promoted paperlessfinancial operations and services, energy saving and emission reduction through online and mobile
services, and vigorously supported epidemic prevention and control while promoting the rapid
development of green finance.

Green Operation Transformative Developmentwith the outdoor environment; it adopted intelligent building control, time controller and LED energy-saving lightsources to continuously improve energy saving. The Bank gradually built a corporate transportation security modelthat mainly uses its own vehicles and is supplemented by social vehicles, such as online hailed cars; it effectively
reduced vehicle energy consumption and steadily improved overall vehicle utilization efficiency. Meanwhile, the Bank
educated and guided employees to enhance awareness of energy saving and environmental protection, innovated energy
saving and emission reduction mechanisms, and carried out various kinds of in-depth propaganda of energy saving andconsumption reduction. It built up and practiced green development concepts, and steadily promoted the implementationof various energy saving measures in work. It tapped potential and reduced consumption through rigorous management.

Cases
The Bank’s data center adopted a series of energy saving
measures, such as energy saving transformation ofchilled water pumps by frequency conversion operation,energy-saving technology for free cooling intelligent
operation, loop network transformation of cooling tower
balance pipe, cold/hot aisle enclosed technology, andonline energy-saving operation model of computer room
air-conditioning, which comprehensively saved energy
consumption of 1,667,900 kWh, equivalent to reductionof 1,662,900 kilograms of carbon dioxide emissions.

Some computer rooms of the Bank’s Data Center adopt LED lighting
sources, which can further reduce energy consumption

Technicians are adjusting the online air conditioners to reduce energy
consumption

Strengthening energy consumption control and adding green development
momentum with energy saving and emission reduction
The Bank furthered in-depth research on energy management and system transformation, and implemented a numberof energy saving transformation projects, such as non-negative pressure water supply transformation, low-nitrogentransformation of direct-fired engines and gas boilers, integration and transformation of equipment rooms andequipment and facilities, and closed-end cold channel transformation in the equipment room. The Bank improved theenergy management system, strengthened the operation management and maintenance of equipment with large energy
consumption, and improved the ventilation efficiency and ensured the optimal operation status and efficiency of units
by descaling the cooling tower ventilation windows and replacing air filters; it used fresh air technology to balance
the heat distribution in the building, and adjusted the units’ blast pressure and outlet water temperature in accordance

34

The Data Center actively studied the innovativetechnologies of computer room infrastructure, and put
forward 18 new technologies suitable for constructionof data center computer room infrastructure in termsof refrigeration system, power system, lighting system,
operation management, etc. The new technologies are
expected to greatly increased the natural cooling timeof the refrigeration system to more than six months
from three months, and save the overall cooling energy
consumption by over 15%; the energy efficiency of thepower supply and distribution system has been further
improved, and the energy saving of the lighting system
is expected to reach 70%. When the IT equipment is
put into production at full capacity, the Data Centeris expected to save up to 30 million kWh electricity
based on PUE, which is equivalent to saving of about
10,000 tons of standard coal per year and reduction of
30,000 tons of carbon dioxide emissions. It can greatly
improve the energy saving and intelligent level of theData Center, and achieve green, intelligent and efficient
operation of the Data Center.

The Data Center’s cold source station adopts color code
management to improve equipment operation and management
efficiency

35

Special Report on Green Finance of Industrial and Commercial Bank of China for 2019

Green Operation Transformative Development

Improving online smart finance

Environmental and Social Key Performance Indicators
Environmental indicators

Unit

2019

2018

2017

Domestic green credit balance

RMB100 million

13,508.38

12,377.58

10,991.99

Proportion of domestic e-banking business volume

%

98.10

97.70

94.86

Office paper consumption

1 million pieces

10.26

8.72

8.73

Office power consumption1

kWh

19,667,324

18,394,080

19,408,280

Office water consumption1

Ton

177,550

172,377

170,196

Oil consumption of official cars2

Liter

67,796

76,69986,1092

As of the end of thereporting period, theBank’s personal App
users reached492

millionCovering

57.4%

of mobile Internet
users nationwide

Notes:
1. Coverage of the disclosure of office water and electricity consumption: ICBC Head Office and kindergartens;
2. Coverage of the disclosure of office paper consumption and fuel consumption of official vehicles: ICBC Head Office.

Upgrading of ICBC

146 million ICBC

Greenhouse gas emission map of the institutions headquartered in Beijing(Scope 1, Scope 2)

Direct greenhouse gas emission
Emission（tons ofcarbon dioxide）

Natural gas
consumption（10,000cubic
meters148.440）

Main source

3,209.65

Mall e-business users

According to Beijing’s carbon emission management
requirements, information on the institutions headquartered in
Beijing includes the information related to the Head Office, theData Center（Beijing）and Beijing Branch of the Software
Development Center.The relevant energy consumption
information is measured according to the Guide to the
Measurement and Reporting of Carbon Dioxide Emission ofEnterprises（Entities）in Beijing｛

Indirect greenhouse gas emission
Emission（tons ofcarbon dioxide）

Main source

46,868.36

The Bank improved customer experience and intelligence in an all-round way, organically combined installment products with online consumption scenarios.

Launch of ICBC
Link Version 4.0

Link instant messaging
users

The Bank built a scenario number cloud platform integrating functions, services and contents to support flexible and rapid expansion and operation of scenarios. A scenario service
ecosystem featuring online government affairs, service messengers, sharing centers and enterprise-specific service numbers has been initially established. It established 14,000 public
accounts and pushed more than 60 million pieces of scenario-based service information.

Building an open online
account service ecosystem

During the reporting period, the Bank established a panoramic view of accounts forcustomers through ICBC Mobile, enabling customers to sign, register, query, manage
and maintain accounts of other banks through the Internet banking connectivity function, so as to meet customers’ needs for various accounts under the “one-stop” management name. The Bank launched the innovative “ICBC e Wallet”, and improved
various connectivity services with various Internet companies. With accounts as a vehicle, it established a cooperation model of open account, payment, financing, clearing, wealth management and deposit integration and output based on API and H5.

167

million ICBCElectricity
consumption（mMh）

Office waste statistics of the Bank

Mall Version 2.0

Electronic information products (2019)
Quantity
Waste statistics:Item36

Microcomputer (host)

519

Display280

Laptop494

Printer132

Server7

Others292

37

Special Report on Green Finance of Industrial and Commercial Bank of China for 2019

Environmental Protection

5,500 young
volunteers

Green Operation Transformative Development

More than
17,000 college
students

Hebei branch held a voluntary tree planting activity (Season 2) in Shijiazhuang, and devoted itself to planting
and environmental protection with actions.

During the reporting period, the Bank strengthened publicity and education on green environmental protection toemployees, and cultivated employees’ awareness of saving and environmental protection, in order to build a green
corporate culture, and deeply rooted the concepts of green environmental protection and sustainable development in
the hearts of employees. During the reporting period, while actively practicing the concept of green environmental
protection in operation and management, the Bank also insisted on carrying out various environmental protection
volunteer activities, such as tree planting and afforestation, and protection of biodiversity, to effectively improve theecological environment, publicize the knowledge of ecological environmental protection, energy saving and emission
reduction to the public, and fulfill social responsibilities.
On the occasion of the 48th “6•5” World Environment Day, the Bank launched the Plogging youth volunteer charity
activity. 5,500 young volunteers of the Bank and more than 17,000 college student ran across time and space. This
activity covered more than 300 colleges and universities in 32 provinces, municipalities and autonomous regions
across the country. It organically integrated environmental protection with the activity, and achieved good results.
ICBC Argentina practiced the green concept through various public benefit activities to promote the improvement of
the ecological environment. Including: training on the sorting of waste products, drawing a map of Argentina’s existing
recycling cooperation institutions, participating in the “Earth Hour” activity, cleaning beaches, recycling glasses, andreducing plastic products. The Bank provided online courses on annual resource recovery for employees to let themunderstand the process and progress of resource recovery.

Hebei Branch launched a tree planting activity

Dalian Branch organized nearly 40 young volunteers to carry out the spring voluntary tree planting activity”Greening Bincheng”. During the activity time of nearly an hour, nearly a hundred trees were planted, adding
planting areas in the south part of Liaoning.

Dalian Branch organized nearly 40 young volunteers to carry out the “Greening Bincheng” spring volunteer tree planting activity

ICBC Argentina carried out glasses recycling activities

ICBC (Asia) worked with the Hong Kong Agriculture,
Fisheries and Conservation Department and the Green
Earth, an environmental protection organizationin Hong Kong, to launch a five-year “Plantation
Enrichment Project” to help improve the ecologicalvalue and biodiversity of Hong Kong’s planting
areas; in conjunction with the Hong Kong Women’sFederation, a Hong Kong social service organization,and the Green Earth, an environmental protection
organization, ICBC (Asia) held a green-themed charity
activity; it actively participated in the “Earth Hour”
activity, deeply carried out green finance training, andorganized the “Green Donation Program” activity. In
2019, the Bank won the Platinum Award of the “Charteron External Lighting” conferred by the Environmental
Bureau of the Hong Kong Special Administrative
Region Government, in recognition of its contribution
to the reduction of light nuisance and energy wastecaused by outdoor lighting in Hong Kong.

38

ICBC Argentina carried out beach cleaning activities

Qingdao Branch actively carried out the Plogging charity activities. Volunteers went to well-known local
universities to display green finance booths, publicize green finance knowledge in the class, and organize green
finance knowledge quiz and games and other educational activities to arouses the strong interest of college
students. It is aimed to popularize green finance knowledge in the friendly and active atmosphere of bank-school
friendship, publicize the Bank and facilitate the concept of green development to take root in college students’hearts.

ICBC (Asia) Planting Optimization Plan
On June 2, 2019, on the eveof World Environment Day,
Qingdao Branch actively
launched the Plogging charity
activity39

Forward-looking Research

05

International Exchanges

While actively practicing the concept of green development, ICBC has vigorously
promoted research on green finance, and has achieved fruitful research results.
It has led the world in terms of green finance research, such as the research on
environmental analysis stress testing. Meanwhile, the Bank actively participated in
global sustainable governance and contributed to the development of global green
finance.

Forward-looking Research

New breakthroughs were continuously
made in the green index research

Forward-looking ResearchInternational Exchanges
Forward-looking Research / 41
International Exchanges / 48

40

In April 2019, the Bank and Oxford Economics set upa joint research group, which develop and preliminarily
released the Belt and Road green finance (investment)
index based on comprehensive collection and sortingof the data of sample countries along the Belt andRoad. The index aims to scientifically measure thegreen economic and financial development level ofthe countries along the Belt and Road, and provide
a set of evaluation methods and quantitative tools to
promote the green and sustainable development ofthese countries, and advance international cooperationin related fields. The green economic performanceand green development capabilities of 79 countries
along the Belt and Road were measured. The index
properly distinguishes the green development status of
the countries along the Belt and Road, and provides asignificant quantitative tool for identifying the green
investment potential of each country along the Belt andRoad.

The index aims to scientificallymeasure the green economic andfinancial development level of thecountries along the Belt and Road.

It has a good degree of distinguishing
the green development of countries
along the Belt and Road, and provides
a breakthrough quantitative tool for
identifying the green investment
potential of countries along the Beltand Road.

41

Special Report on Green Finance of Industrial and Commercial Bank of China for 2019

S t re s s t e s t i n g re s e a rc hremains a global leader

Impact of carbon trading on the credit
risk of commercial banks

Forward-looking ResearchInternational Exchanges

Study and advancement of the preparation of the standards forenvironmental information disclosure of financial institutions—based on the stress test research on the thermal
power industry

In April 2019, the stress test jointly conducted by ICBC
and Beijing Environmental Exchange on the credit
risk incurred by carbon trading to commercial banks
was officially released at the GFC’s annual meeting,indicating that ICBC’s environmental risk stress test
research system has become increasingly complete.
It has now covered the three major areas, i.e. policy,
disaster and price. The research on environmental
risk stress testing fills the gaps in the research on theenvironmental risk quantification and transmission
mechanism of Chinese commercial banks, and stays
ahead in the world.

The subject of the “research on the green finance policy ofadvancing the green development of Belt and Road won the first
award in CFA Association Essay Contest
Since 2018, the Modern Finance Research Institute of ICBC and Tsinghua University have jointly carried out the“research on the green finance policy of advancing the green development of Belt and Road (supported by the Natural
Resources Defense Council). Based on the comprehensive summarization and analysis of the experience accumulated
by international organizations, governments and financial institutions in the long-term development of green finance,
this report has refined and generalized the experience, and specially analyzed and described the part applicable to thedevelopment of green finance in countries along the Belt and Road, and put forward targeted policy recommendations
from three perspectives. The mid-term results of the research were released at the 2018 Global Climate Conference
COP24, and the final version of the research report was officially published in August 2019. This research also won thefirst award in the first green finance essay contest hosted by the Chartered Financial Analyst (CFA) Association.

The first award
in the first green
finance essay
contest42

In January 2018, the Research Bureau of the PBC took the lead in establishing a green finance standard working groupto organize relevant domestic organizations to conduct researches on the green finance standard system. In December
2018, the PBC determined the first batch of green finance standards and implementation plans to be developed basedon the principle of “urgent need first” and the completeness of basic conditions. In view of the status and role of
ICBC in the field of green finance and the positive progress made in the pilot environmental information disclosureof financial institutions in China and the UK, the PBC has authorized ICBC to formulate the Guidelines for financial
institution environmental information disclosure in conjunction with the Industrial Bank and China Emissions
Exchange. As a recommended standard for the financial industry, it was formally approved in September 2019. The
Guidelines for financial institution Environmental information disclosure (Exposure Draft) has been drafted andis under consultation. The preparation of the Guidelines will provide Chinese financial institutions with prevailingenvironmental information disclosure indicators and standards, effectively guide the rational allocation of funds, andoffer important practical guidance for promoting the green transformation of China’s economy and society. Based on
the practice, the Bank continued to carry out an in-depth comparative research on domestic and foreign environmental
information disclosure standards and research on global green finance classification standards, and formed research
results with strong practical guidance.

Institutions continued with green finance researches according
to their own characteristics

In 2019, Gansu Branch of ICBC completed the project report- Research on the Green Finance Innovation andDevelopment Strategy with Gansu Characteristics Based on Domestic and Foreign Practical Experience, which
deeply analyzes the development status, “three challenges” and “five bottlenecks” of green finance in Gansu. Given
the branch’s work conditions, the research puts forward measures and suggestions to Gansu Branch for promoting
the development of green finance, from the perspectives of establishing a green concept, improving the development
mechanism and credit funding, and promoting self-improvement of enterprises.
As a member of the GFC of Guizhou Province, Guizhou Branch actively participated in the research of the GFC,
continuously explored green finance development, and completed the Case Study on Innovation of Green FinanceBusiness from the perspective of actual research on Guizhou Province. This article collects and sorts out the bestpractice cases of green finance in many regions and different fields across the country. Given the actual conditions ofGuizhou, it puts forward measures and suggestions on green finance innovation that can be conducted subsequently,
and provides a certain reference for financial institutions to innovate and develop green finance business, focusing on“financing model innovation, guarantee system innovation, product service innovation, and collaborative mechanism
innovation”, in consideration of the actual operations of financial institutions.

43Special Report on Green Finance of Industrial and Commercial Bank of China for 2019

Forward-looking Research

1
ColumnContinuously promoting the innovation of environmental
risk management tools: Take the Bank’s stress test ofcarbon trading on the thermal power industry as an
exampleIn 2019, ICBC worked with Beijing Environment Exchange to conduct a stress test of carbon trading on the thermal
power industry of commercial banks. The research content and main conclusions are as follows:

01

04
44

02

Selectionof stress
factors andderivationof stress
indicators

Setting of stressscenario andmain parameters

Resultsof stress
testing

Impactof stress
indicatorson the credit
risk ofbanks

Selection of stress factors and derivation of stress indicators

After systematic analysis and expert surveys, the research team selected the following four main stress factors in viewof the stress brought by carbon trading to the emission control enterprises in the thermal power industry:
First, the carbon price, which directly determines the carbon purchase cost of enterprises; second, the industry
benchmark, which defines the average emission reduction cost of the industry, and is an important basis for the
allocation of quotas; third, the proportion of paid allocation. In the early period of initiation of domestic and foreign
carbon trading mechanisms, quota was generally allocated for free. Subsequently paid allocation methods, such as
auction, were gradually introduced, and the level of paid allocation directly determines the cost of enterprises; fourth,
application of emission reduction technology. The cost pressure brought by different emission reduction technology
routes and application levels will be quite different. Among them, the factors of application of emission reduction
technology can be described by two indicators: emission reduction technology cost and emission reduction effect. The
former refers to the operating costs brought by enterprises’ R&D and application of emission reduction technology, andthe latter refers to the effect of emission reduction brought by emission reduction technology to enterprises. Moreover,carbon trading will also bring about corresponding management costs, including human resource costs, transaction
costs and carbon verification costs. However, because these cost factors are either difficult to quantify, or relatively
small, this stress test study should be put aside for the time being.
“Added value of electricity cost per kWh” is finally derived by measuring the impact of the above four stress factors(quantified carbon price, industry benchmark, paid quota ratio, and application of emission reduction technologies) on
enterprises. It is a key stress indicator of the stress test.

Calculation logic of added value of electricity cost per kWhof thermal power enterprises

Industry
benchmark

Carbon price

+

+

03

International Exchanges

Added value ofelectricity cost
per kWh++－

Emission reduction
technology cost

Effect of emission
reduction

Application of emission
reduction technoloy

Paid quota ratio!

45

Special Report on Green Finance of Industrial and Commercial Bank of China for 20192

Forward-looking Research

4

Setting of stress scenarios and main parameters

According to the “carbon trading stress test model” and the situation of the industry and the Bank’s customers in thethermal power industry, the research team has set three stress scenarios, mild, moderate and severe, corresponding
to the expected price (RMB50 per ton) where the thermal power industry fully participates in the carbon trading, theinternational level (RMB160 per ton) of the medium-term carbon pricing of the thermal power industry, and the thermal
power industry’s more ambitious forward carbon price (RMB200 per ton) under the scenario of enhanced emission
reduction, as well as the corresponding industry benchmark, paid quota ratio, technology cost and emission reduction
effect of different generating sets.

Major parameters of stress testing scenario
Stress Testing Scenario

Recent (mild)

Medium-term (moderate)

Forward (severe)

Carbon price, RMB/ton of CO2

50

160

200

Extremely
supercritical

0.825

0.8066

0.744

Supercritical

0.865

0.861

0.7954

Subcritical

0.9236

0.89280.8155

Paid quota ratio

3%

10%

30%

Technology cost, RMB/kWh

00.000198

0.000396431

Greenhouse gas reduction(emission reduction effect)

0

0.02%

0.04%

Industry
benchmark,
ton
Major
of
CO2/MWhpara-

meters3

Results of stress testingFirst, carbon trading has a significant impact on corporate financial performance. Under the three scenarios, theincrease in unit cost of customers in the thermal power industry was 0.23 cent/kWh, RMB1.89 cents/kWh and 6.7
cents/kWh respectively. As the cost of electricity increases, enterprises’ operating costs also show an upward trend.
The ratio of operating cost to operating income under mild, moderate and severe stress scenarios were 86.1%, 91.5%
and 108.2% respectively. Under the severe scenario, the average cost of the thermal power industry has been higher
than income. In addition, the number of enterprises with a negative newly added net profit also grows under the three
scenarios.
Second, carbon trading will increase the credit risk of commercial banks. Due to the increase in carbon emission
reduction costs, the credit ratings of some thermal power enterprises have been downgraded. In the mild and moderatescenarios, only a small number of enterprises have their credit ratings downgraded by one notch. In the severe scenario,a few enterprises have their credit ratings downgraded by two notches. Finally, the carbon trading risk of ICBC’s asset
portfolio is controllable as a whole. Although carbon trading will increase the credit risk of ICBC’s asset portfolio, theoverall risk is controllable. The reason is that since 2003, the Bank has adjusted the customer structure and reduced thecredit scale for high-pollution, high-energy consumption, and high-emission industries. In the current asset portfolio,
almost all the enterprises in the thermal power industry are large-scale high-quality enterprises, and their overall
environmental performance is good in the industry. Therefore, the impact of carbon trading on ICBC’s credit risk iscontrollable. In mild and moderate scenarios, there are about 150 and 50 enterprises that can profit from carbon quota
trading in the secondary market.

Impact of stress indicators on the credit risk of banks
Calculating the increasein enterprises’ operating
costs

Updating enterprises’
financial statements

Main indicators of the income
statement and the balance sheet
are calculated based on thechanges in the amount of main
operating costs, in accordancewith the articulation relationshipof the financial statements andbasic processing specifications.

Using the customer
rating model
更新企业财务报表

更新企业财务报表

The amount of electricity
generated within a year
is reckoned based on theenterprise’s main operating
income and grid-connected
electricity prices, and then theenterprise’s cost of per kWhelectricity increased under the
stress scenario and the increasein the main operating cost of theenterprise are calculated basedon different generating units.

46

International Exchanges

The assessment model consists of twoparts: quantitative assessment andqualitative assessment. Quantitative
assessment indicators include sevenperspectives, i.e. scale, solvency,
leverage ratio, liquidity, profitability,
operating capability and development
capability. From a prudent perspective,
the hypothetical prescriptive
assessment score and the quantitative
assessment score decrease in the same
proportion. Meanwhile, for customers
whose operating costs fall under stressscenarios, their credit ratings remainunchanged.

Zhejiang Huzhou Branch conducted stress tests on theenvironmental risk of the household products industry
and won wide acclaim
Following the stress test on the textile industry, ICBC Huzhou Branch actively explored the impact of environmental
factors on the credit risk of the household product industry, and enhanced its ability to assess and analyze theenvironmental risk. The branch selected the household product industry with a large amount of samples within its
jurisdiction, adopted the stress test method, and followed the path of transmitting the change in the cost of enterprises
affected by the environment to the banks’ credit risk, and measured the degree of credit risk impact brought byenvironmental factors to commercial banks. The Analysis of Huzhou Branch on Stress Test of Household ProductIndustry was selected as a key research project of the Huzhou Urban Finance Society in 2019, and was evaluated as
qualified and praised by the society.

47

Special Report on Green Finance of Industrial and Commercial Bank of China for 2019

Forward-looking ResearchInternational Exchanges

International Exchanges
Actively joining the Global Investors for Sustainable
Development (GISD) of the UN
On October 16, 2019, President Gu Shu, at the invitation of the SecretaryGeneral of the UN, attended the inaugural meeting of the GISD at the UN
Headquarters in New York and delivered a keynote speech. He joined as
the only representative of Chinese-invested institutions and issued the Joint
Statement by GISD. All the members pledged to take six actions to promote
global investment and financing for sustainable development, including
promoting a long-term, inclusive and sustainable economic growth model;
expanding investment opportunities in developing countries throughmultilateral cooperation; adopting long-term performance indicators andrecognizing long-term value creation; unifying relevant international
standards for sustainable development and strengthening information
disclosure; enhancing sustainable investment and information sharing inemerging markets; innovating financing methods and tools to enhance therisk and return expectations of sustainable development investment.

President Gu Shu was invited to attend theinaugural meeting of the Global Investors
for Sustainable Development (GISD) anddelivered a keynote speech

Deeply promoting the Belt and Road green finance cooperation
On the eve of the Second Belt and Road Forum for International Cooperation in 2019, the Bank successfully held
the second “Belt and Road” Bankers Roundtable in Beijing. At the meeting, the Bank and the members of the
BRBR mechanism jointly released the Belt and Road Green Finance (Investment) Index Framework and the BRBR
Mechanism to Support the Belt and Road Green Investment Principles (GIP) Initiative to further urge financial
institutions to strengthen the reciprocal cooperation in the field of green finance.
The Bank successfully issued the world’s first green Belt and Road interbank regular cooperation bonds (BRBR green
bonds) worth USD2.2 billion in the international market, with the proceeds used to support the construction of “Beltand Road” green projects. The Bank urged the BRBR mechanism to issue the first BRBR green bond and release
the Belt and Road Green Finance (Investment) Index. The BRBR policy training course organized by the Bank was
included in the official results list of the Second Belt and Road Summit in 2019, making it a commercial financial
institution with the most results included in the summit. The Dubai solar thermal power station financed by the Dubai
International Financial Center (DIFC) Branch of ICBC won the 2017-2018 Best Cooperation Project Award of theinterbank regular cooperation mechanism.

48

Deeply participating in global governance as the originating bank and one of the firstbatch of contracted banks of the “Principles for Responsible Banking”of UNEP FI
On September 22, 2019, the United Nations Environment Programme and representatives of the global banking
industry issued the Principles for Responsible Banking at the United Nations Headquarters in New York. Under
the guidance of the PBC and the CBIRC, the Bank, as a member of the core working group of the Principles for
Responsible Banking and the only Chinese-invested financial institution out of the originating banks, participated in
the drafting of the principles and first signed the principles.

49Special Report on Green Finance of Industrial and Commercial Bank of China for 2019

Promoting significant progress in the pilot program of climate
and environmental information disclosure of Chinese and British
financial institutions
Since China and the UK launched the pilot program on environmental
information disclosure of financial institutions in December 2017, under thejoint promotion of the GFC and the City of London, the Bank and UNPRI haveacted as the pilot lead agencies of China and the UK to organize and promote
the pilot financial institutions to conduct fruitful exploration and practice, andachieve a series of research results such as work plans, target frameworks
and action plans. The pilot work of China and the UK continues to develop
in depth, and the demonstration and leading role of the pilot institutions isgradually emerging. As at the end of 2019, the number of pilot institutions
for the disclosure of climate and environmental information of Chinese andBritish financial institutions has increased to 13 from originally 10. Ping An
Group, AVIC Trust and PICC Property and Casualty have joined the pilot
working group. The pilot work has covered such industries as banking, asset
management and insurance. As at the end of October 2019, the total assets of
the Chinese pilot institutions were approximately RMB50,296,053 million, andthe scope and influence of the pilot institutions were further expanded.

UK-China Climate andEnvironmental Information
Disclosure Pilot
2019 Progress Report

In 2019, as a pilot lead agency of China, ICBC organized several exchanges and studies among China’s pilot
institutions to strengthen their quantitative capacity building; ICBC and UNPRI jointly organized the pilot institutions
to prepare and publish the Report on the Progress of the Pilot Disclosure of Climate and Environmental Informationof Chinese and British Financial Institutions in 2019; ICBC prepared and issued the Special report on Green Financein the form of an independent report for the first time, to provide practical guidance and demonstration for pilot
institutions; ICBC conducted researches on the topic of Environmental Information Disclosure of Local Commercial
Banks in Huzhou City and form research results, providing guidance for local commercial banks in Huzhou City todisclose environmental information.

06

Extensively carrying out researches and cooperation on international multilateral platform green financeAs the Chinese member of the BRICS Business Council and the Chinese leader of the financial services working
group, the Bank actively participated in green finance exchanges and cooperation within the BRICS cooperation
framework, and deliberated and collaborated with the BRICKS partners in the fields of financial support for thedevelopment of clean energy industry, environment, society and governance (ESG), and carbon emissions trading, inan effort to jointly promote the sustainable economic and social development and the information sharing and mutually
beneficial cooperation in the field of green finance among the BRICS countries.

Actively participating in international climate-related academic exchanges
In September 2019, at the invitation of the Central Bankof Malaysia, ICBC sent staff to Malaysia to attend the first“Climate Change Regional Conference” and delivereda special speech on international green classification
methodology and China’s practice. At the meeting, therepresentative of ICBC introduced China’s explorationof green classification methodology to the experts at themeeting. So far, a green standard system composed of national
standards, local standards and corporate standards has been
formed. It is suggested that China should promote national
standards to be integrated with international standards assoon as possible, and encourage all regions, provinces andcities to issue green standards in line with local development
characteristics.

50

Annual Achievements
Awards and Honors
Annual Awards / 52

51

Special Report on Green Finance of Industrial and Commercial Bank of China for 2019

AnnualAwardsMedia: Global Compact Network China
Award: Best practice of the year in “realizing
sustainable development goals”
Media: AsiamoneyAward: Best Green Commercial Bank in ChinaMedia: FinanceAsia
Award: Award for Best Green Bond in China
Institution: China Central Depository & Clearing
Co., Ltd.,Award: Award for ChinaBond Green Bond Index
Component Bond Outstanding Underwriting
Institution

07

Media: Caixin MediaAward: SGCX ESG50 Index EnterpriseMedia: Finance.sina.com.cn
Award: Annual sustainable development award
Media: Caijing
Aw a r d : E v e rg r e e n a w a r d f o r s u s t a i n a b l edevelopment outcomes in 2019
Institution: Social Responsibility and Sustainable
Development Committee of Chinese Institute ofBusiness Administration
Award: Outstanding enterprise for sustainable
compliance management

52

Appendices
TCFD Framework Content Index / 54
Feedback Form / 55
Notes to the Report / 56

53

Special Report on Green Finance of Industrial and Commercial Bank of China for 2019

Appendices

TCFD Framework Content Index

Feedback Form

◆ Governance:
Content

Pagea)Describe the board’s oversight of climate-related risks and opportunities.
b)Describe management’s role inassessing and managing climate-related risks and opportunities.

8-9
8-9

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 the Bank’s philosophy of green operation, and fulfill our
responsibility and mission of promoting green transformation of the real economy with green finance, we earnestly hope thatyou can make valuable comment on the report and provide it to us by:
Tel: 010-66105355
Fax: 010-81013544
Email: CEIR@icbc.com.cn◆ Strategy:

Address: 121 C Xuanwumen West Street, Xicheng
Contenta)Describe the climate-related risks and opportunities the organization has identified over the short, medium,and long term.
b)Describe the impact of climate -related risks and opportunities on the organization’s businesses,strategy, andfinancial planning.
c)Describe the resilience of the organization’s strategy, taking into consideration different climate-related
scenarios, including a 2°C or lower scenario.

District, Beijing

Page

Post code: 100031

13
11-13
8-9、45-47

1.Your overall comment on this report
Excellent 〇 Good 〇 Average 〇 Poor 〇2.Which of the following stakeholders you belong to?
◆Government 〇 Regulator 〇 Shareholder or investor 〇 Customer 〇 Partner 〇 Staff 〇 Others 〇Risk Management:
Contenta)Describe the organization’s processes for identifying and assessing climate-related risks.
b)Describe the organization’s processes for managing climate-related risks.
c)Describe how processes for identifying, assessing, and managing climate-related risks are integrated into theorganization’s overall risk management.

Page
11
11
11-13

3.To what extent do you think this report can meet your reading needs?
Very good 〇 Good 〇 Average 〇Poor 〇

4.How clear, accurate and complete do you think the information, data and indicators disclosed in thisreport are?

◆High 〇 Relatively high 〇 Average 〇 Low 〇Indicators and goals:
Contenta)Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its
strategy and risk management process.
b)Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the relatedrisks.
c)Describe the targets used by the organization to manage climate -related risks and opportunities andperformance against targets.

Page
17-18、36
17-18、36

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?
Very good 〇 Good 〇 Average 〇Poor 〇

11-13

6.To what extent do you think the layout and design of this report are suitable for reading?
Very good 〇 Good 〇 Average 〇 Poor 〇7.Your suggestions on the Bank’s green finance work and this report54

55

Special Report on Green Finance of Industrial and Commercial Bank of China for 2019

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, 2019, and some contents are beyond this timeframe.

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 andguidelines.

Data:
Data used in this report is mainly from 2019, most of which is excerpted from thestatistical data of the Bank’s internal systems and branches. Unless otherwise provided,
figures involved in this report shall be in RMB.

Format:This report is released in hard and soft copies. The soft copy is available on the websiteof the Bank. 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 Modern Finance Research Institute
Address: 121 C Xuanwumen West Street, Xicheng District, Beijing
Post code: 100031
Tel: 010-66105355
Fax: 010-81013544
Email: CEIR@icbc.com.cn

56