China Merchants Bank Co., Ltd.

RATING

SECTOR

Banking

WEBSITE

CONTACT

Merchants Bank Tower, No. 7088 Shennan Boulevard, Shenzhen, Guangdong 518040

Tel: 0755-83198888
Fax: 0755-83195555
Email: office@cmbchina.com

STOCK EXCHANGE

LISTING

EMPLOYEES

70,000

CHIEF SUSTAINABILITY OFFICER

No CSO or equivilent found.

 

AWARDS

  • “The Bank of the Year” award for 2020 from The Banker
  • “Most Respected Enterprise in Asia,” “Best CEO,” “Best Investor Relations,” and “Best ESG” by Institutional Investor
  • “Best Bank in China” by Euromoney
  • “Best Retail Bank in Asia Pacific,” “Best Wealth Management Bank in Asia Pacific,” “Best Retail Bank in China,” “Best Joint-stock Retail Bank in China,” “Private Bank of the Year in China,” and“Achievement in Credit Risk Management Award” by The Asian Banker
  • “Best publicly-listed Chinese company in the financial industry,” “Best corporate and investment bank in China,” “Best national joint-stock bank,” “Best bank for financial advisory,” and “Best bank for credit cards” by Asiamoney
  • “Tianji National Bank Award,” “Tianji Bond Underwriting Bank Award,” “Tianji Asset Custody Bank Award,” “Tianji Private Bank Award,” and “Tianji Bill Financing Bank Award” by Securities Times
  • “Financial Innovation Enterprise of the Year” and “Credit Card Center of the Year” by ThePaper.cn
  • “Outstanding Asian Commercial Bank in 2020” and “Bank of Brand Building in 2020” by 21st Century Business Herald
  • “Best Joint-stock Bank of the Year” by The Chinese Banker
  • “Best Private Bank in China” by Financial Times
  • No.1 in the 2020 China Customer Satisfaction Index by the China Customer Satisfaction Index Awards Organizing Committee
  • No.1 in the 2020 China Net Promoter Score by the China Customer Satisfaction Index Awards Organizing Committee
  • “Achievement Award for Implementing “Belt & Road Initiative” by China Banking Association
  • “Anti-Pandemic Leader in 2020” by Southern Weekly
  • “Best ESG” by Zhitongcaijing.com, 10jqka.com.cn
  • “Best Bank for Corporate Social Responsibility” by Global Finance
  • “Review and Communication Cases during the 20th Anniversary of Poverty Alleviation Work” were selected as the 2019-2020 Excellent Cases for Targeted Poverty Alleviation by China’s Insurance Quote
  • “Add Red to China” marketing campaign that celebrated the 70th anniversary of PRC was selected as an Innovative Brand Marketing Case for the year 2019-2020 by China’s Insurance Quote
  • “Leading Enterprises Paying Tribute to the 40th Anniversary of Shenzhen Special Economic Zone” by The Economic Observer
  • “Financial Institution with Special Contribution to Shenzhen Special Economic Zone in Past 40 Years,” “Financial Institution with Special Contribution to Initiative of Stabilizing Enterprises and Projecting Jobs,” and “Bank of the Year for Financial Innovation” by the Shenzhen Economic Daily, “Duchuang” app
  • “Employer with Outstanding Achievements in China,” “Top 3 Employers in China,” “Most Socially Responsible Employer,” “Best-performing Employer in Fighting Pandemic,” and “Employer Most Favored by Female Employees” by Zhaopin, The Institute of Social Science Survey of Peking University

CONTENT SOURCE

FURTHER READING

Report created by Maribel Sabino

 

China Merchants Bank Co., Ltd.

SECTIONS :  Sustainability Targets    Evaluation  •  Key Points  •  Overview

Company Activity

China Merchants Bank (CMB) is a Chinese bank headquartered in Futian District, Shenzhen, Guangdong, China. Founded in 1987, it is the first share-holding commercial bank wholly owned by corporate legal entities in China. CMB has over five hundred branches in mainland China and one in Hong Kong. 

CMB is China’s first joint-stock commercial bank wholly owned by corporate legal entities and the first pilot bank as China promoted reform in the banking industry with endeavors outside the government.

CMB has evolved into a comprehensive banking group equipped with financial licenses of commercial banking, financial leasing, fund management, life insurance and overseas investment banking.

By the end of 2018, with over 70,000 employees, CMB has set up a service network that consists of more than 1,800 branches worldwide, including six overseas branches, three overseas representative offices, and service outlets located in more than 130 cities of mainland China.

In mainland China, CMB has two subsidiaries, CMB Financial Leasing and China Merchants Fund, and two joint ventures, CIGNA & CMB Life Insurance and Merchants Union Consumer Finance Company.

In Hong Kong, CMB has two wholly-owned subsidiaries, CMB Wing Lung Bank and CMB International Capital.

Company Sustainability Activity

China Merchants Bank Co., Ltd. is committed to disclosing non-financial and socially responsible goals since 2007. CMB has published 14 corporate social responsibilities (CSR) reports. In 2020, CMB began renamed its CSR report to Sustainability Report to better communicate with stakeholders on sustainability topics and its CSR measures and achievements. The Report features CMB’s efforts in promoting sustainable development of the economy, society, and environment.

In 2020, CMB continued with the efforts of protecting the environment and has made contributions to an ecological civilization. The bank is strengthening its research on climate change-related risks and opportunities and has fully implemented the Guidelines on Promoting Investment and Financing to Tackle Climate Change that were promulgated by the Ministry of Ecology and Environment.

CMB introduced the CMB Green, Social Responsibility and Sustainability Bond Framework, considered investees’ ESG performance in its investment decision-making process, and guided and encouraged more investors to invest in sustainability-related investment and financing activities. These efforts allowed CMB to mitigate, deal with and adapt to climate changes.

In 2021, CMB will embark on a new development stage, adopt new development concepts, actively listen to stakeholders, strengthen sustainability management, and implement sustainability practice, in order to provide strong support to help achieve a good start in the “14th Five-Year Plan”.

CMB adhered to the concept of green development and studied the risks and opportunities brought about by climate change to achieve the development goals of attaining peak carbon and reaching carbon emission neutrality. The bank conducted in-depth research in environmental protection and energy conservation industries closely related to climate risks and deepened its efforts in green finance such as green credit, green bonds and green investment to help build an eco-friendly society.

CMB made further progress in green finance development by building a sound climate change risk management system covering green credit, green bonds and green investment. In 2020, CMB’s green loan balance reached RMB 207.133 billion, representing an increase of RMB 30.36 billion from the prior year. CMB issued US $1.1 billion green and sustainability bonds, and actively underwrote green bonds.

Highlights

Poverty Alleviation

  • CMB has built a multifaceted poverty alleviation system, and kept innovating the methods for poverty alleviation. In 2020, CMB pushed continued poverty alleviation through education, cultural development, industrial support, and consumption.

Customer Experience

  • CMB uses artificial intelligence, big data, cloud computing and other fintech to innovate financial products and reform its service procedures. CMB actively popularized financial knowledge and carried out various investment education activities to ensure sound protection of customers’ rights and interests.

Serving the Real Economy

  • CMB is focused on inclusive finance, national regional development strategy, social & livelihood construction and “Belt & Road” initiative and actively promoted industrial transformation and upgrade, and consistently injected impetus to drive development of the real economy.

Green Finance Development

  • CMB utilizes the role of finance in coping with climate change, and built a sound climate change risk management system covering green credit, green bonds and green investment.

Success with Employees

  • CMB possesses great importance to talent cultivation, retention and development, and expanded channels for introducing talents. CMB fully protects employees’ rights and interests and strives to build an inclusive and diversified workspace where employees can achieve healthy and upward personal development. 

Charitable Activities

  • CMB continues to develop its “More Pleasure from Monthly Donations” plan and “Points for Micro Charity” platform. CMB encourages its employees to participate in various volunteering activities in charitable areas such as poverty alleviation, education and environmental protection.
 

Targets

Battle Against Poverty

  • Formulate the CMB 2020 Poverty Alleviation Work Plan to improve the systems and build an institutional foundation for successful poverty alleviation
  • In the Yunnan Province, CMB works to eliminate local poverty through education, consumption, and healthcare.
  • Encourage local organizations to support poverty alleviation.

Green Development & Ecological Construction

 

Progress

Battle Against Poverty

  • Both counties in the Yunnan Province, Yongren and Wuding, were lifted out of poverty. Yongren county on April 30, 2019, and Wuding County on May 16, 2020.
  • In the past 21 years, CMB has invested a total of 213 million RMB ($33.7 million) in financial assistance to the Yunnan Province, and 139 million RMB ($21.9 million) to the Yongren and Wuding counties alone.
  • CMB has helped 26,000 students and 168 teachers that have lived in poverty.
  • In 2020, CMB bought 12.506 million RMB (~$2 million) in agricultural products from poverty-stricken areas, helping the areas sell 3.9307 million RMB (~$600K) worth of agricultural products.

Green Development & Ecological Construction

  • CMB’s green loan balance reached 207.133 billion RMB ($32.7 billion), an increase of 30.36 billion RMB ($4.8 billion) from the previous year.
  • Green loan projects helped reduce the water consumption of 8.9365 million tons, consumption of 9.7522 million tons of standard coal, and emission of 21.858 million tons of carbon dioxide.  
  • CMB supported 69 energy conservation and environmental protection projects, with RMB 8.227 billion in outstanding loans for these projects, up 109.13% year on year.  
  • CMB issued US $1.1 billion worth of green and sustainable bonds as well as other similar bonds.  
  • CMB underwrote five green bonds, with a total issuance amount of RMB 8.3 billion. CMB was the lead underwriter for RMB 5.4 billion worth of green bonds.
  • From 2018 to 2020, CMB conducted in-depth research on green and eco-friendly industries, such as water pollution treatment, new energy vehicles, biomass power generation, wind power, air pollution, solid waste treatment, soil pollution prevention and control.
  • At the end of 2019, CMB’s subsidiary China Merchants Fund officially joined the United Nations-supported Principles for Responsible Investment, becoming one of the first groups of Chinese mutual fund managers to sign on to the principles and pledge to practice the six major Principles for Responsible Investment.
  • In 2020, the Harbin Branch vigorously supported the development of a green circular economy in the province, providing RMB 488 million worth of green loans throughout the year.

Customer Experience

  • 145 million customers have downloaded the CMB App. Monthly active users reached 61.2638 million, and CMB App transaction volume hit RMB 40.91 trillion.  
  • Total users of CMB Life hit 110 million. Monthly active users of CMB Life reached 46.0317 million.  
  • Average queuing time across all CMB branches was 2.26 minutes shorter than the year-beginning level, significantly boosting customer satisfaction.  
  • CMB organized 11,170 publicity activities, reaching out to 1,041.076 million consumers. The bank distributed 359.419 million pieces of promotional materials.  
  • No major information security or customer privacy leakage took place within the year.

Serving the Economy

  • CMB provided inclusive finance loans for 480,100 small and micro-sized businesses. 
  • Balance of its inclusive finance loans to small and micro-sized businesses amounted to RMB 530.65 billion.  
  • The balance of loans made by CMB to small and micro-sized businesses has reached RMB 474.528 billion, increasing 17.12% from the end of the prior year 
  • Balance of loans made to small businesses (defined as per domestic banking industry’s standards) has reached RMB 113.412 billion, increasing 71.03% from the end of the prior year.  
  • From February to December 2020, CMB cut a total of RMB 54.80025 million in fees for small companies. The banks loans made to strategic and emerging industries have increased 33.24% year on year to RMB 201.315 billion.  
  • CMB issued over 13 million “electronic social security cards” throughout the year. 

Tech

  • The investment in information technology amounted to RMB 11.912 billion, representing an increase of 27.25% year on year and 4.45% of operating income.  
  • During the year, CMB submitted 618 applications for the fintech innovation project fund. Among these applications, 495 were approved, and 401 have been put into operation.

Employees

  • CMB hired 9,072 new employees, and the total number of its employees (including contractors) reached 90,867.  
  • Female employees accounted for 55.6% of all permanent employees that have signed labor contracts with CMB.  
  • CMB organized 7,452 training sessions. 75,244 employees accepted training, and per-capita learning time hit 85.11 hours.

Charity

  • CMB has built an online charitable platform. Using its strong platform and channels, and through the “More Pleasure from Monthly Donations” and “Points for Micro Charity” programs, CMB has supported charitable projects in terms of targeted poverty alleviation, disaster relief, child care and environmental protection.
  • RMB 3.6295 million was donated via the “More Pleasure from Monthly Donations” platform throughout the year.  
  • 88,800 people took part in the “Points for Micro Charity” platform and donated 24.17 million points.

Certificates

UN Sustainable Development Goals

UN SDGs Compliance

SDG 1: No Poverty

  • CMB formulated the CMB 2020 Poverty Alleviation Work Plan to improve the poverty alleviation system and lay a solid institutional foundation for the successful completion of alleviation work.
  • CMB helped Wuding and Yongren counties in Yunnan Province for 21 years. By constantly adjusting its measures in poverty alleviation, CMB helped Wuding and Yongren counties eliminate poverty as scheduled.
  • Using its strong platform and channels, and through the “More Pleasure from Monthly Donations” and “Points for Micro Charity” programs, CMB has supported charitable projects in terms of targeted poverty alleviation, disaster relief, child care and environmental protection.  
  • Upholding the responsibility concept of “Gaining from society and contributing to society“, CMB paid attention to charitable fields such as poverty alleviation, education, the disabled and handicapped, and environmental protection, among others. CMB actively participated in volunteering activities.

SDG 3: Good Health and Well-being

  • CMB advocates work-life balance and cares about the mental and physical health of employees. CMB also organized a variety of recreational and sports activities for employees and strived to build a bank with the best employee experiences.
  • CMB safeguarded the health and safety of its employees in a holistic manner by strengthening sanitization in public facilities and spaces. Through working remotely, staggered work schedules and shift-based working hours, its employees’ health was protected. 
  • CMB strengthened its financial support for sectors related to pandemic prevention and control and offered differentiated financial services with preferential terms to businesses and individuals that were heavily impacted. CMB boosted the efficiency of financial services.
  • In Wuding and Yongren Counties in Yunnan Province where CMB is designated to help eliminate local poverty, a multi-layer and full-coverage poverty alleviation model was established to eliminate poverty through education, consumption, and healthcare.

SDG 4: Quality Education

  • CMB helped around 26,000 students (including students from primary schools, secondary schools, and universities) and 168 teachers that lived in poverty.
  • CMB implemented dual career paths for employees. One path is for employees who pursue managerial roles, while the other is for employees who look to develop in-depth technical expertise. 
  • CMB built strong backup talent pools, and introduced “Young Eagle Plan”, “Seal Plan”, “Seashell Plan” and other talent development programs, in order to promote mobility and specialized development of employees.  
  • CMB established a complete training system, providing various learning resources and training programs that fit employees at different development paths and stages.

SDG 5: Gender Equality

  • CMB insists on equal hiring, expanded hiring channels, implemented the “six stability” and “six guarantees” policies, and extensively recruited excellent talents.
  • Female employees accounted for 55.6% of all permanent employees that have signed labor contracts with CMB.

SDG 7: Affordable and Clean Energy

  • Improving the green credit policy system, and increasing support for industrial energy conservation, transportation energy conservation, and clean energy sectors; carrying out classified management over existing customers in sectors that CMB plans to exit or reduce exposure to; minimizing exposure to or terminating dealings with enterprises that have poor environmental performance and huge social risks, and applying a one-vote veto mechanism to these enterprises.
  • CMB supported 69 energy conservation and environmental protection projects, with RMB 8.227 billion in outstanding loans for these projects, up 109.13% year on year.

SDG 8: Decent Work and Economic Growth

  • CMB has lowered financing costs for businesses and promoted innovation in inclusive finance products and services. CMB is focused on supporting those small and medium-sized tech startups and has introduced comprehensive measures to lessen operating difficulties faced by medium, small and micro-sized enterprises.  
  • CMB served the national strategy for coordinated regional development, focused on and tilted its financial resources to Guangdong-Hong Kong-Macao Greater Bay Area (GBA) and the Yangtze River Delta. The company has also provided financial support for quality regional development.
  • Provided 110 pandemic prevention loans for a total amount of RMB 5.231 billion.  
  • Underwrote 33 pandemic prevention bonds, with a total issue amount of RMB 20.65 billion. CMB acted as the lead underwriter for RMB 12.51 billion worth of bond issues.  
  • Invested a total of RMB 5.106 billion into 43 pandemic prevention bonds.  Provided 1,275 loans to customers by remote lending, with a total amount of RMB 28.7 billion.

SDG 9: Industry, Innovation and Infrastructure

  • CMB launched the 9.0 version of CMB App and further enhanced service experiences on CMB Life. By developing fintech apps, it makes affordable and low-cost financial services accessible to all walks of life.  
  • CMB promoted the digitalization of outlets and further advanced the integrated development of online and offline services.
  • CMB supported the development of transportation infrastructure, big data centers, 5G and other new infrastructures, strategic emerging industries, as well as other “new momentum” sectors. CMB helped the economy shift to new growth drivers from the old ones.
  • CMB increased investment in information technology, promoted the application of fintech innovation projects, continued to cultivate new capabilities in digital management, and built an agile IT infrastructure.
  • CMB established the fin-tech innovation ecosystem fund, sought excellent partners that have the potential to develop ecosystem synergy with its businesses, and built medium to long-term strategic cooperative relations with such partners.

SDG 11: Sustainable Cities and Communities

  • CMB actively donated money and materials, and provided volunteer services, sending its help to the key regions and people that were hardest hit. 
  • CMB served the national strategy for coordinated regional development, focused on and tilted its financial resources to Guangdong-Hong Kong-Macao Greater Bay Area (GBA) and the Yangtze River Delta. CMB provided financial support for quality regional development.

SDG 13: Climate Action

  • CMB established a climate change risk management framework based on proposals of the Task Force on Climate-Related Financial Disclosure (TCFD), covering governance, strategy, risk management, metrics, and targets. 
  • CMB improved the green credit policy system, and increasing support for industrial energy conservation, transportation energy conservation, and clean energy sectors; carrying out classified management over existing customers in sectors that they plan to exit or reduce exposure to; minimizing exposure to or terminating dealings with enterprises that have poor environmental performance and huge social risks, and applying a one-vote veto mechanism to these enterprises.
  • Releasing CMB Green, Social Responsibility and Sustainability Bond Framework to provide guidelines for green, social responsibility, and sustainability bonds issued by CMB, and to finance/refinance qualified assets/projects with environmental or social benefits.

SDG 17: Partnerships for the Goals

  • CMB cooperated with the University of Science and Technology of China, Chinese Academy of Sciences and other research institutes for integrating industry, university, research and application, and exploring the use of cutting-edge technologies in financial scenarios.
  • In May 2020, CMB officially launched the Fintech Innovation Ecosystem Fund, which focused on forming business partnerships rather than pursuing financial returns from investment in investees.

Secondary SDGs: 2, 6, 14, 15, 16

 

Evaluation

China Merchants Bank has made strides towards sustainability and protecting the environment. CMB has implemented the Guidelines on Promoting Investment and Financing to Tackle Climate Change, introduced the CMB Green, Social Responsibility and Sustainability Bond Framework, considered investees’ ESG performance in its investment decision-making process, and guided and encouraged more investors to invest in sustainability-related investment and financing activities, all in efforts to address climate change. 

CMB is dedicated to green finance development, poverty alleviation, serving the economy and its employees, and engaging in charitable activities. Many of the bank’s initiatives are in line with the United Nations Sustainable Development Goals (SDGs) targeted towards driving growth through innovation, creating value through services, and sharing and balancing values. CMB complies with 10 of the 17 UN SDGs.

CMB’s targets are minimal and nonspecific, including goals for poverty alleviation and green development, and ecological construction. However, CMB has made significant progress in its battle against poverty, lifting Yongren and Wuding in the Yunnan Province out of poverty, and reaching its money goals.

CMB does obtain some sustainability certificates, such as ISO 14001 and China Environmental Labeling Product certification. Its sustainability report is in accordance with the Global Reporting Initiative (GRI Standards) and the Task Force on Climate-Related Financial Disclosure (TCFD). 

Despite CMB’s sustainability efforts, the bank has financed $32 B in fossil fuels from 2016 to 2020, increasing its investment from 2019 to 2020. 

CMB has been rated a C.

Analyst Outlook: Negative

CMB is dedicated to sustainability, however, the Impakter Index cannot ignore its contribution to the fossil fuel industry. China Merchants Bank would receive a higher rating if it contributed fewer investments to the fossil fuel industry.

 

Key Points

  • This Report is prepared in accordance with the “core” disclosure guidelines under Global Reporting Initiative (“GRI Standards”) issued by the Global Sustainability Standards Board (GSSB). 
  • According to the 2021 Fossil Fuel Finance Report, China Merchants Bank has financed $32.4 billion in fossil fuels from 2016 to 2020.
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