OREANDA-NEWS. April 25, 2011. Earlier, ICBC issued the Implementation Outline of Green Credit Framework to all branches to underscore green credit is one important long-term strategy of the Bank, and stated out the development goal of turning ICBC into a leading green financial institution in the country and top-class in the world as well, reported the press-centre of ICBC.

Being a large publicly traded bank with international influence, ICBC recognizes the far-reaching role of resources and environment to economic and social development. In 2007 ICBC was the first bank in China to advocate and implement "Green Credit" policy. Since then, the Bank has a strict policy of "a veto with only one vote" to support companies engaged in energy-saving or reduction emission and dedicated to be a resource-saving, eco-friendly "green bank". ICBC's balance of loans to green companies surpassed RMB 500 billion by the end of 2010. The number of eco-friendly or eco-certified companies receiving ICBC loans and the loan balance were both over 99.9% among ICBC's all corporate clients and all loan balance. The remaining less than 0.1% of the customers and loans were also in the process of getting eco-certification. Not only this has achieved the purposes of economic growth pattern transformation and the goal of energy-saving, emission reduction stated in the "11th Five-Year" Plan, but underpinning sustainable development of ICBC's loan business.

"Green" Initiatives
In the announcement of Implementation Outline of Green Credit Framework, ICBC further clarified the principles of green credit. Loans should be focused on six areas. First, ecological protection. Customers should adopt effective measures to protect biodiversity, prevent the damages to important habitat, statutory conservation zone and ecological vulnerable areas. Second, pollution prevention and control. Customers should reach or above the applicable standard for pollution emissions, and take necessary measures to reduce pollution emissions as much as possible in a bid to prevent the pollution of soil and underground water. Third, greenhouse gas emission control and reduction. Customers should adopt effective measures to control or reduce greenhouse gas emission and are encouraged to go for carbon neutral. Fourth, efficient resource utilization.

All resource consumption of customers must reach or above the applicable standard. Customers are encouraged to use energy-saving, recycling or renewable resources. Fifth, safety, health and resettlement of people. Customers should meet the standard or requirement of production safety, occupational health and protection. Issues involved in the projects such as resettlement, community safety and health should be properly addressed. Lastly, historical and cultural preservation. Customers should fully respect the local folk customs and traditions during the project design or implementation. All cultural relics and heritages involved should be protected.

More "Green" Supply
ICBC was the earliest bank in the country to advocate "green credit" philosophy. In the last few years ICBC saw over the horizon focusing on boosting its loan portfolio and took the lead to extend loans to green companies based on the carbon emission level in different sectors and companies. ICBC grants extensive credits to national key energy saving projects, environmental protection projects and projects that involve technological upgrade in energy saving or environmental protection. Customers engaging in new energy, energy saving/ environmental protection and resource comprehensive utilization are given priority to receive ICBC loans. This has justified the lending target of ICBC to green companies.

By the end of 2010, balance of ICBC loans to green companies reached RMB 507.452 billion, lending intensive support on projects related to ecological, historical and cultural protection, clean energy development and utilization, energy saving/emission reduction and Resource Comprehensive Utilization. Among the clean development mechanism (CDM) projects approved by National Development and Reform Commission, 257 were backed by ICBC loans with a balance totaling RMB 63.386 billion. It is expected that CO2 emission will be reduced by another 71,801,900 tons every year, which is significant as a result.

The next move of ICBC is to continue nurturing the emerging green credit market in line with the requirements stated in the Outline. ICBC will offer great support to the growth of green economy - clean energy, energy saving & environment protection, recycling economy, low-carbon economy. Companies in advanced manufacturing sector, modern service industry are the target recipients of ICBC loans. Based on this, ICBC is going to scale up its efforts to sustain the growth of financial services in order to better meet the needs of the customers.

Tighten "Green" Threshold
While extending more credit to green companies, ICBC enforces strict "green" threshold in the management of loans to ensure the "green" allocation of loan resources. ICBC embeds the national environment protection standard into the whole process of credit management. All corporate loans of ICBC are classified according to the extent of "green", which means companies or projects supported by ICBC loans are classified into 4 levels, 12 categories based on the impact caused to the environment and the environmental risk faced. Corresponding credit principles and management requirements are laid out for different categories of green loans.

From the perspective of "green credit" ICBC also draws up the management requirements and major concern for loan investigation, review, approval, contract signing and post-lending management, covering green credit management in the whole process. Especially in the approval of loan, ICBC strictly enforces "a veto with only one vote" to reject any application from enterprises that fail to meet the eco standards regardless of how best they performed financially, how high the economic benefits they bring. Companies that fail to meet the eco-friendly standards are all devoid of money. The goal is to prevent any environmental risk arising from non-compliance, project location, pollution emission and resources consumption.

In the announcement of Outline, ICBC also stated that more efforts will be spent on the environmental and social risk management in key sensitive projects and sensitive industries. Strict credit standard will be enforced in lending to high-pollution, high-emission sectors in line with the industry restructuring across the world. Loans to companies using pollution technology or in backward production will be withdrawn as soon as possible. Besides, ICBC will leverage its domain expertise in green credit to guide customers to adopt and reach the environmental and social standard in order to promote the green development, sustainable growth of economy, society and customers.