China Development Bank, ICBC Both See Green Loan Balances Exceed 2 Trillion Yuan

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Two of China’s leading state-owned lenders have just seen their green lending balances breach the two trillion yuan threshold amidst a push from Beijing for more environmentally conscious financing.

China Development Bank (CDB) currently has a green loan balance of over 2.3 trillion yuan – the largest amongst Chinese domestic banks, according to a report from 21st Century Business Herald.

CDB has issued a total of 80 billion yuan in yuan-denominated green bonds, as well as made 292.2 billion yuan in green loans in the first half of the year.

The Chinese central government has pushed hard for growth in green financing since the start of 2021, after setting the emissions reductions targets of achieving peak carbon by 2030 and carbon neutrality by 2060.

“In order to satisfy the funding needs of green development, it’s far from enough to just rely on government funds,” said CDB president Ouyang Weiming (欧阳卫民).

“For this reason, it is necessary to guide the financial system to actively undertake the responsibility of providing finance, and vigorously develop green finance.”

Ouyang stressed CBD’s role in providing medium and long-term low-cost financing to green projects, as a policy bank whose role is to support China’s national policy.

“For many years CBD has upheld the concepts of green and sustainable development and actively supported the establishment of an ecological civilisation,” said Ouyang.

Liao Lin (廖林), president of the Industrial and Commercial Bank of China (ICBC), said that at the end of June the lender’s green loan balance exceeded 2 trillion yuan, including the issuance of nearly USD$10 billion in green bonds.

According to Liao ICBC is one of the leaders in the Chinese banking sector when it comes to green loans, green bond issuance and green bond underwriting, while ICBC has actively participated in national green industry funds and supported green financing reform trials.

With regard to achieving China’s carbon reduction targets, Liao said that in future ICBC would play a “guiding role” in four areas including:

  1. Deepening the establishment of a green financing system. Incorporating peak carbon and carbon neutrality targets in the formulation of financial standards, as well as product innovations, risk control, performance assessments and research forecasts.
  2. Increasing environmental risk management capability. Exploring the inclusion of climate change-related risk in comprehensive risk management systems. Using big data and other advanced technologies to raise environmental risk identification and management capability, and undertaking environmental risk stress tests.
  3. Driving green and low carbon operation. ICBC actively undertakes carbon emissions inspections for its own operations, drives carbon cost calculations, optimises emissions reductions, and establishes a low carbon management system.
  4. Strengthening international cooperation and information sharing. ICBC has comprehensively improved ESG information disclosures, and deepened cooperation with international peers.

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