Green bank of the year 2017
Industrial Bank, headquartered in the eastern city of Fuzhou, had nothing special to set itself apart from other domestic commercial banks a decade ago. But that started to change in 2008 when it became the first Chinese bank to adopt the Equator Principles, the internationally recognized risk management framework for green finance projects.
Now the bank is a big green-credit provider and a fervent believer in international best practices. It has promoted the growth of green finance in China thanks to its green-bond issuance in 2016, the valuable work it has done to assist government agencies with the formulation of guidelines on green finance and its coaching of peers in the banking sector to adopt international best practice in green finance.
Industrial Bank achieved a milestone in 2016 in growing its green finance product portfolio. It was one of the first two commercial banks to place green bonds on the domestic interbank market. During the year, Chinese banks issued a total of Rmb238 billion ($35 billion) in green bonds, making China the world’s largest green-bond market. Industrial Bank accounted for Rmb50 billion, or 21% of that total.
Industrial Bank’s management understands the importance of a sound regulatory framework and international best practices when it comes to ensuring the sustainable development of green finance in China.
Last year, the bank helped China’s central bank and the China Banking Regulatory Commission to draft guidelines on green-credit provision and green-bond issuance. It also assisted them in coming up with methodologies to appraise the environmental benefits for green credit in China.
The bank regularly organizes seminars across the country to share its experience with other domestic banks in developing innovative green-finance products in line with international best practices.
After a decade of sustained efforts in applying international best practices and innovation, Industrial Bank has become a role model for other Chinese banks in the green-finance sector. But China Development Bank, a policy bank, and state-owned commercial banks such as Agricultural Bank of China have already overtaken it in terms of green-credit provision.
To maintain its leadership position in the sector, Industrial Bank plans to increase the balance of its green credit to more than Rmb1 trillion and has set a target for the number of projects funded by its green finance to exceed 10,000 by the year 2020. It is also actively seeking access to the global green bond market through partnership with international financial institutions.