China Minsheng Bank

RATING

SECTOR

Banking

 

WEBSITE

CONTACT

Phone: +86 1058560666
Fax: +86 1058560720
e-mail: cmbc@cmbc.com.cn

STOCK EXCHANGE

LISTING

  • Hong Kong Stock Exchange (publically listed in 2009)

EMPLOYEES

54,927

CHIEF SUSTAINABILITY OFFICER

No CSO or equivalent position was found.

AWARDS

  • June 2021: M & O Minsheng Bank Beijing Mapo Data Center
  • 2019 LACP Vision Award Gold Winner Worldwide 
  • 2019 LACP Vision Awards Top 50 Reports China
  • Named China house of the year in 2019 Asia Risk Awards
  • China Minsheng Bank was awarded the “Outstanding Organisation” in the “3.15” Consumer Rights Protection Publicity and Education Week of the Banking and Insurance Industry.
  • As well as awarded Joint Financial Education and Publicity & won the “Best Achiever” in the Financial Knowledge Campaign of the Banking Industry.
  • Best Targeted Poverty Alleviation Contribution Award
  • 2019 Social Responsibility Index of China’s Banking Industry

CONTENT SOURCE

FURTHER READING

Report created by Georgie Murrin

 

China Minsheng Bank

SECTIONS :  Sustainability Targets   Evaluation  •  Key Points  •  Overview

 

Company Activity

China Minsheng Bank (CMBC), founded in Beijing in 1996, is the first bank in China to be owned mostly by non-government enterprises. 

Minsheng Bank is well known for focusing on making loans to small-medium enterprises. The bank was founded by Jing Shuping, a Chinese lawyer and businessman. China Minsheng has over two hundred banking outlets across China, and relationships with more than seven hundred banks overseas.

Officially established on 12 January 1996, CMBC initially formulated its strategic positioning of non-state-owned, high-tech, and large enterprises. Nonetheless, the orientation ended in failure with 8.72% of the non-performing loan rate and 40% loss of Return On Equity (ROE) until 1999.

A change of leadership in 2000 reshaped the bank, and led to “the enterprise business and divisional organisation reform” in 2007. Since 2011, CMBC has innovated its orientation by establishing “a ‘customer-focused’ scientific and strategic implementation system” for sufficient development and further interests.

Since its restructure and change of direction, CMBC was ranked by Forbes as number 148 on the Global 2000 in 2021, and ranked number 67 in 2019 under world’s best employers.

Company Sustainability Activity

CMBC begins its ESG report by outlining its environmental, social, and governance principles. The firm’s core concept is actively committed to ESG management within corporate culture and business operation management.

CMBC achieves this through adhering to the corporate mission of From the People and For the People, the corporate vision of a time-honored bankand the core value of Integrity, mutual benefit, people-oriented idea and pursuit of excellence.”

The bank proactively promotes mutual and harmonious development integrating corporate development, social progress, and ecological improvement to protect shareholders’ interests, increase corporate value, and promote sustainable and healthy development of enterprises and society.

CMBC is committed to establishing a high standard ESG governance structure, which is implemented within the management of enterprise ESG through the organizational structure of “Three boards and one management”.

The shareholders’ general meeting serves as the supreme power body of the company, the Board of Directors is the core of decision-making, the Board of Supervisors is the core of supervision, and the management is responsible for the Company’s daily operation management, supervising and reviewing ESG performance.

Most recently, ESG structure was discussed at the 18th meeting of the 7th Session of the Company’s Board of Directors in 2019. Two proposals, namely the Name Changing for Strategic Development and Investment Management Committee and Amendments on Certain Clauses of the Committee’s Working Rules, were approved.

New working rules were incorporated, and relevant contents of inclusive finance and consumer rights protection, and included assessing the performance of social responsibilities, such as economic, environmental, and social welfare undertakings, were addressed. Finally, the company elected to focus on ESG management for the following year to ensure the effectiveness of ESG governance.

Highlights

  • CMBC claims to adhere to a people-oriented”  philosophy, prioritizing and ensuring the effectiveness of their ESG governance
  • 2019 saw the launch of a value management enhancement project, which enables ESG evaluation methodologies and tools
  • The project focuses on four value modules, namely green finance, inclusive finance, technology finance, and social responsibility

The bank outlines its focus for ESG as follows:

  • Governanceoptimize corporate governance, improve compliance systems, enhance awareness of integrity 
  • Environmentalpersist in green development, contribute to green finance, practice green operations
  • Social – protect customer rights, people orientated, employee development, improve brand management, contribute to society, produce in a fair and just manner

Targets

China Minsheng does not set out any specific sustainable-related goals.

However, they do write that “efforts have been made to strengthen the guiding green policies, promote the implementation of the green credit development strategy, and support green economy, low-carbon economy, and circular economy”.

Progress

  • China Minsheng strictly controls the credit supply to industries with high pollution and high energy consumption, and accelerates the exit from enterprises with outdated production capacity and “zombie enterprises”
  • China Minsheng practices a sustainable development concept of low carbon and environmental protection, energy conservation, and emission reduction
    • They state that this is strict compliance with national and local laws and regulations such as the Environmental Protection Law of the People’s Republic of China and the Energy Conservation Law of the People’s Republic of China
      • This was historically not always the case for the bank
  • According to CNBC’s analysis, China Minsheng Bank had the second-highest percentage change in fossil fuel financing from 2016 to 2020 with a 550% increase, as its financing went from $1.7 billion to $10.8 billion
  • China Minsheng Bank states that they strive to achieve energy conservation and emission reduction through various means, so as to fulfill environmental responsibility. However, there is a lack of outlined goals, reference to the SDG’s or a demonstration of progress in relation to their ESG strategy developed in 2019
  • In 2019, for the renovation of existing office buildings, CMBC stated that they preferred green and energy-saving products, but did not explicitly state these were implemented within their offices
  • They make several other open-ended claims about reducing electricity and consumption in their offices, but do not state how they are going about this nor the effectiveness 

Certificates

China Minsheng Bank does not have any sustainability-related certificates.

UN Sustainable Development Goals

UN SDGs Compliance

China Minsheng Bank does not clearly align with specific Sustainable Development Goals. Therefore, the Impakter Index team aligns current company-wide sustainability initiatives with the UN Sustainable Development Goals in the following section.

SDG 1: No poverty

  • China Minsheng has successively formulated the 2019 Targeted Poverty Alleviation Plan of China Minsheng Bank, the Guiding Opinions on 2019 Targeted Poverty Alleviation of China Minsheng Bank, and the Administrative Measures for Loans for Targeted Poverty Alleviation of China Minsheng Bank (Trial), etc., which further demonstrated the commitment and attitude of the company to increase social input
  • In 2019, they developed a poverty alleviation system of “One Body and Two Wings”, with targeted poverty alleviation work in Hua County and Fengqiu County of Henan Province
    • This was supplemented by a series of poverty alleviation programmes in other severely impoverished areas.
  • They provided RMB 27 million in funds to assist and support Fengqiu County and Hua County, trained 2,844 grassroot poverty alleviation cadres, technical personnel and leading farmers, and purchased RMB 15,498,800 agricultural products 
  • Additionally, they have donated RMB 28.08 million to the poverty-stricken “three regions and three prefectures” for several charity programmes, including the free treatment of children with congenital heart disease in Tibet, medical ambulance donation in Linxia Prefecture, Gansu Province, and financial support to ethnic minority students of Meijiang Minsheng Class

SDG 3: Good Health and Well-Being

  • The firm attaches great importance to fulfilling the major responsibilities of corporate citizenship and actively assumes social responsibilities
  • The Head Office regularly evaluates employees’ happiness index and incorporates the evaluation results into the year-end balanced scorecard of each unit. The assessment covers organisational promotion, rectifications and improvements, and evaluation results
    • With evaluation and data analysis, they can evaluate the work and living conditions of employees, and provide data support and scientific decision-making basis for targeted improvement
  • In 2019, China Minsheng’s happiness index evaluation reached 77.7% in terms of effectiveness, up 1.3% over 2018
    • The average evaluation score across the bank was 74.22 points, 1.61 points higher than 2018, and the overall evaluation results witnessed significant improvement compared with that of the previous year
  • The bank is in accordance with the Law of the People’s Republic of China, as well as managing employees’ safety and health by providing employees with comprehensive insurance schemes, including accident insurance, comprehensive medical insurance
  • China Minsheng states they value employees’ mental health, and actively organises various activities for employees to enrich their leisure time and achieve work-life balance, continuously enhancing their sense of belonging

SDG 7: Affordable and Clean Energy

  • China Minsheng works towards green policies, promotes the implementation of the green credit development strategy, and supports green economy, low-carbon economy and circular economy.
  • They claim to save energy by ensuring their employees turn off light bulbs when they leave

SDG 8: Decent Work and Economic Growth

  • China Minsheng strives to achieve a win-win result with suppliers by constantly improving the procurement management rules and regulations, and by enhancing management of tendering, bidding, and suppliers
  • Moreover, they encourage suppliers to include the requirements of labour standards, environmental protection, occupational health, safety, and business ethics into their own management system
  • China Minsheng requires suppliers to comply with national laws and regulations, and to have a good business reputation and perfect financial and accounting systems

SDG 12: Responsible Production and Consumption

  • China Minsheng states that efforts have been made to strengthen the guiding green policies, promote the implementation of the green credit development strategy, and support green economy, low-carbon economy and circular economy  
  • They also claim to practice sustainable development, through their policy of low carbon use, environmental protection, energy conservation, and emission reduction 
  • For water conservation, the bank assigns special personnel to carry out daily inspections and maintenance of various water pipelines in the office area to prevent trickle and leakage of water
    • The personnel install water-saving and spill-prevention devices to reduce water waste

Evaluation

China Minsheng Bank has begun its sustainability journey through the establishment of its environmental, social, and governance principles. The firm adheres to the corporate mission “From the People and For the People” by proactively promoting mutual harmonious development. 

Despite China Minsheng Bank’s commitment to establishing a high ESG governance structure, the company does not set out any specific sustainable-related goals.

While the company is dedicated to establishing sustainable development practices such as low carbon and environmental protection, its efforts are mediocre at best.

In addition, the bank does not obtain any sustainability-related certificates, has few awards and listings. China Minsheng Bank does not explicitly comply with the UN Sustainable Development Goals.

Despite the bank’s minimal sustainability practices, China Minsheng Bank has invested a total of $26.120 B in the fossil fuel industry between 2016 and 2020. Even more alarmingly, the bank has increased its investment in this industry drastically from $723M to $10.8B since 2017.

China Minsheng Bank has been rated a D.

Analyst Outlook:  Neutral

Based on China Minsheng’s report from this past year, this analysis suggests they are rated ‘neutral.’ This is due to a lack of sustainability certificates, a lack of outlined compliance or mention of any SDGs, and a lack of empirical data, outlined goals.

Furthermore, the firm had an extremely high percentage change in fossil fuel financing the same year they started to produce the ESG reports that provide all their sustainability metrics. 

Key Points

  • CMBC has created ESG reports for the last 3 years
    • The most recent begins by outlining their environmental, social, and governance principles
    • Their core concept is actively committed to ESG management within corporate culture and business operation management, however, there is little data or information around how they go about achieving a more sustainable future 
  • CMBC does not have any sustainable related awards or certificates, nor do they align themselves with the three pillars of sustainability or the SDG goals
  • They do outline some ideas in which they want to work towards with the three categories of ESG, but these are not definitive goals and have no detail or timeline 
  • Despite their report stating that they are environmentally conscious and reducing consumption towards sustainable development,  CNBC found that China Minsheng Bank had the second highest percentage change in fossil fuel financing from 2016 to 2020 with a 550% increase
    • The firm’s financing went from $1.7 billion to $10.8 billion
  • China Minsheng claims they work towards green policies, promote the implementation of the green credit development strategy, and support green economy, low-carbon economy and circular economy
    • However, they do not go into further detail within their report 
  • China Minsheng claims to practice sustainable development, however, they do not outline how and what goals they have within this area
  • China Minsheng’s ESG report does not directly mention climate action, yet many of their initiatives contribute towards it 
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