Industrial and Commercial Bank of China

RATING

SECTOR

Banking 

WEBSITE

CONTACT

No.55 FuXingMenNei Street, Xicheng District, Beijing, P.R.C, 100140

Tel: 86-10-66104123,

Fax:  86-10-66108522

Email: csr@icbc.com.cn

STOCK EXCHANGE

LISTING

  • # 1 on Forbes Global 2000 2021
  • Forbes World’s Best Banks 2021
  • #527 Forbes World’s Best Employers 2021 
  • #1 among the Top 500 Banking Brands of Brand Finance for the fifth consecutive year

EMPLOYEES

434, 798

CHIEF SUSTAINABILITY OFFICER

No CSO or equivalent found.

 

AWARDS

 

CONTENT SOURCE

FURTHER READING

Report created by Madeleine Bruce 

Industrial and Commercial Bank of China

SECTIONS :  Sustainability Targets   Evaluation  •  Key Points  •  Overview

Company Activity

Based in Beijing, China, the Industrial & Commercial Bank of China (ICBC) Ltd. was founded in 1984 and provides commercial banking and other financial services. Its operations include the following components: corporate banking, personal banking, and treasury operations among others. 

The corporate banking segment provides corporate loans, trade financing, corporate wealth management services, custody activities, and various other types of corporate intermediary services which the bank offers to corporations, government agencies and financial institutions. 

The personal banking component offers personal loans, deposit-taking activities, credit/debit card business, personal wealth management and other forms of personal services to individual customers. 

The treasury operations segment focuses on the issuing of money market transactions, investment securities, and foreign exchange transactions. The bank also works in the management of assets, liabilities, income, and expenses.  

ICBC regards service as the very foundation of creating value so that they may provide a comprehensive range of financial products and services to over 8.60 million corporate customers and 680 million personal customers.

Company Sustainability Activity

ICBC has taken various measures to show care and concern for its officers and employees and regards them as the foundation for sustainable development. The bank has been consciously integrating social responsibilities with its development strategy and operational/management activities.

ICBC has gained wide recognition in the aspects such as supporting pandemic containment, promoting inclusive finance, backing poverty alleviation and rural revitalization, developing green finance, and participating in public welfare initiatives

A key task in performing social responsibility for ICBC includes accomplishing victory over poverty in pursuit of common prosperity. This year, the bank unleashed its strengths and gathered forces to carry out poverty reduction and alleviation programs. ICBC’s loans allocated for precision poverty alleviation grew by 17.8%, much faster than the average growth of total loans.

The Bank also has made an effort to build its green finance repertoire under the philosophy that lucid waters and lush mountains are invaluable assets”. ICBC has continued to improve its organizational, policy, product systems for green finance while also rationalizing the allocation of credit resources and strengthening the management of environmental (climate) and social risks. The bank’s total green loans value gave ICBC a leading edge over its competitors totaling at  RMB1.85 trillion in the year 2020. Altogether, ICBC is devoted to working to build the future of a “green bank” and promote harmonious coexistence between man and nature.

 

Highlights

  • The Party Committee of the Head Office introduced the “48-character” guideline, leading the Bank toward high-quality development through the sustained push for rigorous corporate governance
  • The Bank officially introduced the No.1 Personal Bank strategy at the mid-year work meeting of 2019, regarding it as a “priority strategy” in the Bank’s business development 
  • The personal loans maintained good quality in spite of the COVID-19 shock, representing a NPL ratio of 0.56%, and showing overall soundness of asset quality
  • Female employees accounted for 52.5% of the Bank’s new hires in 2020
  • Online banking saved 120,000 tons of paper, equal to planting 2.4 million trees 
  • Balance of loans for wind and solar power industries accounted for 35% of total loans for power generation industries
  • During the reporting period, ICBC Mall hosted 4,300 merchants for the anti-poverty purpose cumulatively
  • 2.4 million pieces of anti-virus medical supplies donated to institutions and charitable organizations against COVID-19
  • Bank cumulatively issued green bonds valued at 9.83 billion USD
  • Helped with sales of agricultural products from poverty-stricken areas at RMB 2,502 million
 

Targets

Corporate Governance

  • ICBC aims to plan, deploy, advance and assess Party Leadership work and business activity together, and effectively turn the strengths in Party building into an edge in innovation, development and competition
  • Strengthen and improve the corporate governance and checks and balances mechanism comprising of the Shareholders’ General Meeting, the Board of Directors, the Board of Supervisors and the Senior Management featuring “clearly defined responsibilities and accountability, coordination and effective checks and balances”
  • Endeavor to build responsibility chains featuring horizontal collaboration and vertical integration 
  • Further targets in line with “No. 1 Personal Bank Strategy” in which all departments, business lines and institutions of the Bank are required to work together to achieve the goal of being the most competitive and most able to create value, deliver the best quality of business and reach the highest level of brand reputation and customer satisfaction in the market
  • Rationalize staff size and structure and strengthen overall team building 

Social Impact

  • Uphold the principle of customers first by serving financial consumers in a customer-centric way
  • Strengthen communication/cooperation with external or governmental organisations to alleviate poverty 
  • Serve the digital transformation of government agencies/enterprises
  • Improve the inclusiveness, convenience,and security of financial services 

Environment 

  • Build an “environmentally friendly” bank 
  • Increase green loans and financing of renewable energies 
  • Reduce non-renewable energy consumption in operational offices/headquarters by applying energy-saving technologies to build a green center up to high standards

(no specific targets in reference to years after 2020 specified)

Progress

Corporate Governance

  • Responsibility agreements for improving Party conduct and upholding integrity and anti-corruption were signed at every corporate level 
  • Surveys and inspections were also conducted over the performance of responsibility and the work on improving Party conduct and upholding integrity
  • Increased efficient supervision by issuing relevant policies and unleashing the joint supervision meeting mechanism to ensure the responsibilities were effectively performed and supervised
  • Introduced the “No.1 Personal Bank” strategy at the mid-year work meeting of 2019, regarding it as a “priority strategy” in corporate governance 
  • ICBC delivered good results of personal banking while coordinating COVID-19 response well with strategy advancement and business development
  • Female employees accounted for 52.5% of the bank’s new hires in 2020

Social Impact

  • Prioritised personal customers and personal banking as at the end of the reporting period, the bank had more than 68 million personal customers, representing an increase of 30.24 million over the beginning of the year
  • Deepened financial market reform services such as in the assistance of the Beijing Equity Transfer Company and Shenzhen Stock Exchange with system testing to guarantee the smooth launch of the Science and Technology Innovation Board and the Growth Enterprise Market
  • Increase in customer-friendly user technology by continuously pushing forward the “Six Major Projects for Service Improvement”, and taking advantage of big data, face recognition and other technical means to improve the inclusiveness, convenience and security of financial services
  • During the reporting period, New York Branch of the Bank participated in a two-year syndicated loan of USD 950 million to the Metropolitan Transportation Authority (MTA) of New York City, therefore supporting the local economy and local development  
  • As part of combatting COVID-19, A total of 2,851 volunteers of the branch went to 758 communities and 135 villages who worked on the front-line of pandemic containment and established 85 emergency teams to render financial services 
  • In 2020, all of the bank’s designated anti-poverty areas were lifted out of poverty following the success in Wanyuan City, Tongjiang County and Jinyang County of Sichuan Province
  • As of the end of the reporting period, RMB 200,657 million was loaned to the precision poverty alleviation initiative 

Environment 

  • In 2020 the bank’s outstanding green credit granted to green industries such as energy-saving and environmental protection, clean production, clean energy, ecological environment, green upgrading of infrastructure and green services was valued at RMB 1,845,719 million 
  • The ICBC Shanghai Branch facilitated a renewable energy utilization center project
  • ICBC’s stock securities investment fund in eco-environmental industries scored a net value growth of up to 122.51% 
  • During the reporting period, ICBC continued to promote paperless meetings and training as 445 paperless meetings were held across the Bank, saving around 3 million sheets of paper
  • During the reporting period, ICBC Jiading Data Center was honored as the 2020 National Green Data Center jointly by the Ministry of Industry and Information Technology, National Development and Reform Commission, Ministry of Commerce, National Government Offices Administration, China Banking and Insurance Regulatory Commission and National Energy Administration

 

Certificates

UN Sustainable Development Goals

UN SDGs Compliance

The Impakter Index team aligns current company-wide sustainability initiatives with the UN Sustainable Development Goals in the following section. (None stated in their 2020 CSR Report  but do align with the UNGC Ten Principles which can be translated to alignment with the following SDGs)

SDG 8: Decent Work and Economic Growth 

  • The Bank abides by international human rights protection conventions or practices signed or recognized by China, including the Universal Declaration of Human Rights.
  • The bank has improved the system of employee representatives’ meetings to listen to all employees’ voices and protect their right to know, participate and supervise. All branches and subsidiaries of the Bank have their own trade unions and all employees were members of trade unions.
  • ICBC fully protects employees’ rights to rest and take leave and has eliminated all forms of forced and compulsory labor through an efficient and orderly working mechanism and optimized labor composition.
  • In accordance with the guideline of “combating corruption in an integrated way, addressing both its symptoms and root causes, and combining punishment with prevention while focusing on the latter”, the Bank pressed forward with anti-corruption work focused on improving the corruption control and prevention system.

SDG 9: Industry, Innovation, and Infrastructure

  • The bank gives priority to green credit projects including new energy, energy conservation and reuse of resources. The bank also intensified its efforts in innovating green credit products related to carbon emission and energy conservation. 
  • ICBC’s loan balance to the green economy sector totaled up to RMB 1,845,719 million
  • The Bank also promoted paperless, energy-efficient E-banking leveraging on its leading technological strengths, with the E-banking transactions accounting for 98.70%.

SDG 13: Climate Action

  • ICBC actively responded to climate changes by willingly assuming responsibility for the international environment, establishing a sound mechanism for comprehensive management of environmental protection and using the financial lever to help get rid of dependence on traditional development mode and promoting economic restructuring.
  • The bank improved its green credit policies and procedures, established an accountability mechanism for green credit and strengthened credit risk management of enterprises with outdated production capacity and heavy metal pollution. 
  • Implemented the “one-ballot veto” rule for lending to root out the causes of environmental pollution and fully supported the eco-friendliness drive.

Evaluation

It’s clear that the Industrial and Commercial Bank of China (ICBC) is making an effort to increase their corporate social responsibility impact.  

The bank’s 2020 CSR Report outlines their commitment to improving three aspects of CSR including corporate governance, social impact, and environmental impact. In each section, the bank reviews where they have increased their eco-friendly protocols/objectives. 

However, while some stats are promising (such as total green bonds being valued at 9.83 billion USD), much of the information published is vague, unclear, and not relevant to sustainability.

The bank has certainly done well economically/fiscally, however, it outlines zero targets in reference to key sustainability timeline dates such as 2030 (as in reference to the UN’s Agenda 2030). While the company has a fair amount of awards, there are not currently any internationally recognised certificates (such as LEED, Dow Jones, etc.)  listed in their report. 

Lastly, not all sustainability press is good press for ICBC. The Global Trade Review wrote on ICBC’s continuing involvement in financing deforestation projects and other harmful activities. Additionally, in the Forest 500, a ranking system of the deforestation policies of the 500 most influential financial institutions, ICBC actually scored the lowest possible mark of zero for their performance last year.

Thus, for the reasons listed above, the Industrial and Commercial Bank of China has been given a C rating on the Impakter Index.

Analyst Outlook: Negative

Given the evidence in their CSR Report, ICBC is a financial institution that recognizes the need for a better social/environmental impact. The company has listed the ways in which they are working to improve their CSR and therefore sustainability protocols. 

 However, such claims severely lack transparency and third-party assurance such as through certifications. There exists no evidence of explicit goals or targets, nor is there any exhibition of SDG alignment. 

These factors coupled with bad press and further engagement in unsustainable activities paint a very negative picture for the future of ICBC. If the company can work on being more transparent and accountable, this pattern could change. Until then, the ICBC’s rating of mediocre sustainability performance is well justified. 

 
 

Key Points

Share this Post