Industrial Bank (China)

RATING

SECTOR

Banking

WEBSITE

CONTACT

Building A, Zhongshan Plaza, 154 Hudong Road
Fuzhou, Fujian Province, China
350003

Phone: +86 591 87839338
Fax: +86 591 87825748
e-mail: sustainability@cib.com.cn

STOCK EXCHANGE

LISTING

  • #50 Global 2000 2021
  • #158 Sales
  • #244 Market Value
  • World’s Best Banks 2020
  • #452 World’s Best Employers 2018
  • A in MSCI Index

EMPLOYEES

59,630

CHIEF SUSTAINABILITY OFFICER

Liang Pingrui

AWARDS

CONTENT SOURCE

FURTHER READING

Report created by Emilia Sharples

Industrial Bank Co., Ltd.

SECTIONS :  Sustainability Targets    Evaluation   •  Key Points  •  Overview

Company Activity

The Industrial Bank Co., Ltd. is a commercial bank based in Fuzhou, Fujian province of the People’s Republic of China and was founded in 1988. It is one of the first joint-stock commercial banks approved by the State Council and the People’s Bank of China and it is also the first Equator Bank in China. 

Today it has grown into a mainstream commercial bank group. According to the “Top 1000 World Banks” released by the British Magazine The Banker in 2011, the Industrial Bank ranked 75th in total assets and 83rd in Tier 1 capital. It ranks among the top 30 banks in the world and Fortune Global 500. 

The bank works in corporate and personal banking services, financial leases, assets custody services, and conducting treasury business. The Industrial Bank operates through 79 branches and 662 sub-branches and has established correspondent bank relationships with more than 1,400 banks around the world. 

The bank has created well-functioning online channels such as online banking, telephone banking, mobile banking and WeChat banking, forming a nationwide customer service network that features both online service and offline outlets along with domestic and overseas connections.

 

Company Sustainability Activity

Industrial Bank (China) (IB) has fostered a responsible and sustainable economy by the philosophy of  “serving the country, improving people’s livelihoods and giving back to society” across their entire operation and management process. In 2019, IB became one of the first banks signing up to the Principles for Responsible Banking (PRB) and in addition, IB was upgraded to A in 2019 by MSCI-ESG Ratings for its outstanding ESG performance. Industrial Bank pledged its commitment to aligning its banking strategy with the Paris Agreement, the United Nations Sustainable Development Goals (SDGs) as well as individual demands and social goals of the countries it operates in.

Responsibility/transparency

  •   Industrial Bank identifies key issues and takes corresponding measures to respond in accordance with the UN SDGs.
  •   Industrial Bank discloses its E&S risk management policies on its website in a section titled “Sustainable Finance.” It also publishes an annual sustainable development report, in which it shares the bank’s definition of corporate governance, a road map for implementing its policies and a practical sustainable development model.
  •  Industrial Bank has also standardized its knowledge of various industries, established a green finance certification system and tested for environmental benefits that are “measurable, reportable and checkable.”

Leader in sustainable finance

 Environmental policy

  • The Industrial Bank claims to apply sustainability policies in all of its operations.
  • The Industrial Bank claims to apply sustainability policies to clients’ business activities.
  • Industrial Bank’s sustainability policy draws upon the EPs and the IFC’s performance standards.
  • Industrial Bank’s sustainability policy applies to its entire credit business.
  • In addition, the Industrial Bank also uses an internal environmental management system to improve its management of green operations.

 Promoting employee professional development

  • Industrial Bank has incorporated sustainable development performance into the performance examination system it uses for evaluating senior management and links performance in this area of sustainable development to income.
  • Industrial Bank’s initiatives include philosophical training for management, capacity building at the operational level, and improvement of its governance system.
  • The bank has trained employees through real projects that bring collaboration among the headquarters and branches into full play and promote discussion of the EPs and concept of sustainable development.
  • The Sustainable Finance Division is responsible for setting overall annual targets for the bank’s green financial business and delegating sub-targets to each branch.
  • The Company promotes the transformation from managing human resources to building human capital through employee training and education programs.
  • Listed as one of the “best employers in China.”

 Contribution to Society

  • The bank provides case studies for key branches to orient themselves to newly established institutions (e.g. Industrial Bank Financial Leasing Co. Ltd.), theoretical training, on-the-spot training, periodically compiling the Bulletin on Equator Principles-Related Work, updating and maintaining the “Sustainable Finance” column on its website, and producing an annual Sustainable Development Report.
  • Industrial Bank carries out wide exchanges with the IFC, WWF, UNEP, Citi, Scotiabank and other foreign banks.
  • Loans for targeted poverty alleviation continued to grow and there were 256 poverty alleviation-related products in IB online shop.

 Addressing environmental issues in the banking industry

  • The bank drafts industrial access rules on an annual basis, including standards for saving energy and reducing emissions as well as technical standards for the power, chemical, energy-saving and environmental protection industries.
  • Industrial Bank divides projects that the EPs apply to into three categories: A, B and C. Type A projects are those that may potentially have major, negative, irreversible, or unprecedented impacts on the environment or society.
  • The Board of Industrial Bank makes decisions about the bank’s E&S risk management strategies and development direction. It reviews and updates the bank’s sustainability policy regularly according to the needs of Industrial Bank’s operational management.

 Stresses the importance of employee commitment to sustainable practice

  • IB retains 50% of senior management’s performance-based income as a risk fund to be released only after three years based on evaluation results.
  • The concepts of green credit and sustainable development are well understood and widely accepted within the bank.

Combating corruption

  • The Bank established a publicizing platform for anti-corruption education; 15,000 employees watched films with anti-corruption themes via its online mobile learning platform “IB Knowledge.”
  • The Bank integrated the culture of clean administration into the building of the Bank’s compliance culture and carried out a series of publicity activities on integrity risks.

Highlights

  • Industrial Bank’s sustainability policy applies to its entire credit business, including corporate loans (such as loans for energy conservation and pollution reduction projects, financial services related to Pollution-Discharge Rights, and project financing where the EPs are used for E&S management).
  • Industrial Bank makes businesses that save energy and reduce their emissions a central focus of its credit distribution.
  • Industrial Bank is so far the only Chinese bank to have joined the Equator Principles (EPs) and the Carbon Disclosure Project (CDP).
  • Industrial Bank carries out wide exchanges with the IFC, WWF, UNEP, Citi, Scotiabank and other foreign banks.
  • Loans for targeted poverty alleviation continued to grow and there were 256 poverty alleviation-related products in IB online shop.
  • Achieved its “Two Ten-Thousands” mid-term goal (i.e, the financing balance of green finance to reach RMB 1 trillion and the number of customers of green finance to reach ten thousand) ahead of time.
  • It reviews and updates the bank’s sustainability policy regularly according to the needs of Industrial Bank’s operational management.
  • The Bank established a publicizing platform for anti-corruption education; 15,000 employees watched films with anti-corruption themes via its online mobile learning platform “IB Knowledge”.

Targets

Inclusivity/Responsible Business:

  • The Bank will continue to promote its “1234” strategy steadily, boost the real economy, help small and micro businesses, benefit people’s livelihood, and strongly support strategic industries.
  • The Bank will further strengthen data governance and utilization, and continue the exploration and innovation in fields such as open banking platforms, construction of financial ecosystem, unified portals, digital client management.

Social Impacts:

  • The Bank will also fully support the poverty alleviation and pollution control, improve customer management system, refine risk management and control, deepen supply-side reform, and drive high-quality development nationwide.
  • IB has signed and launched the new round of student aid programs with 5 schools and will donate another RMB 10 million in the coming 4 years to help poor students continue their studies.

Progress

Inclusivity/Responsible Business

  • Cumulative loans offered for green finance were 22,232 (RMB 100 million).
  • 19,454 cumulative clients in green finance.
  • The first business guideline of green supply chain finance issued in China
  • In 2018, 234 Chinese A-shares, including Industrial Bank, were officially included in the MSCI Emerging Market Index and MSCI ACWI Index.
  • IB was upgraded from BBB in 2018 to A in 2019 by MSCI-ESG Ratings for its outstanding performance in sustainable finance practice, corporate governance and information disclosure.
  • By the end of August 2012, Industrial Bank had extended 200 billion RMB of green finance to almost 4,000 green finance projects through a variety of financial tools. The bank’s outstanding green finance total reached 100 billion RMB.
  • As of the end of 2019, the Company achieved its “Two Ten-Thousands” mid-term goal (i.e, the financing balance of green finance to reach RMB 1 trillion and the number of customers of green finance to reach ten thousand) ahead of time.
  • In early 2019, the Bank also signed Green Investment Principles for the Belt and Road initiated by the Green Finance Committee of China Society for Finance and Banking (GFC).

Social Impacts

  • In 2011 the bank carried out 68 on-the-spot, thematic and online training programs as well as field trips, providing 20,783 total training opportunities for its employees.

Water and Energy Consumption

  • Annual savings of 30.04 million tons of standard coal and 410.06 million tons of water and annual emission reduction of 84.39 million tons of carbon dioxide.
 

Certificates

UN Sustainable Development Goals

UN SDGs Compliance

SDG 3: Good Health and Wellbeing

  • The Beijing Branch organized staff to offer door-to-door card application services for customers over the age of 50 in major communities, elderly universities, hospitals for elderly in Beijing, and therefore facilitating senior tourism in the Beijing-Tianjin-Hebei region.
  • The “Beijing-Tianjin-Hebei Scenic Sites & Cultural and Leisure Tourism Industrial Bank Card” was a debit card which combined the benefits of the Industrial Bank Enjoyable Life service and the benefits of the Beijing-Tianjin-Hebei Scenic Sites & Cultural and Leisure Tourism Yearly Card. Issued to customers over 50 years old in the Beijing-Tianjin-Hebei region, it is an attempt of Industrial Bank for extending elder-care financial services into the tourism industry. 

SDG 6: Clean Water and Sanitation 

  • As of the end of January 2020, Nanjing Branch has withdrawn loans from a total of 19 chemical companies and reduced the loans to 25 chemical companies since the explosion of the Xiangshui Chemical Industry Park in March 2019.

SDG 8: Decent Work and Economic Growth 

  • Created well-functioning online channels such as online banking, telephone banking, mobile banking and WeChat banking, forming a nationwide customer service network that features both online service and offline outlets along with domestic and overseas connections.
  • The Strategy Committee of the Board of Directors is responsible for approving the CSR strategies, green credit, and environmental and social policies related to the Bank’s sustainable development and hearing the reports from senior management.

SDG 9: Industry, Innovation and Infrastructure 

  • The “Ten Full Coverage” road hardening project has delivered many benefits to farmers and herdsmen.

SDG 11: Sustainable Cities and Communities:

  • RMB 142.381 billion loan balance for supporting strategic emerging industries.
  • RMB 634.867 billion balance of loans to small- and micro-sized enterprises.
  • With the “Commercial Banking + Investment Banking” mode, its Wuhan Branch further increased the supportive role of financial services focused on key work in the local economy.  

SDG 12: Responsible Consumption and Production: 

  • Guided by national industrial policies, the Bank adheres to optimization of regional layout, focuses on high-quality leading companies, accelerates structural adjustments, and enhances the cooperation while client access, project access, and green financial technology standards and requirements are strictly regulated.
  • The Bank prudently considers the coal and oil refining industries, emphasizing support and control to prevent risks, and stipulating that a complete safety, environmental protection and occupational health management system should be available in terms of client access.
  • As of the end of January 2020, Nanjing Branch has withdrawn loans from a total of 19 chemical companies and reduced the loans to 25 chemical companies since the explosion of the Xiangshui Chemical Industry Park in March 2019.

SDG 13: Climate Action

  • One of the first banks signing up to the Principles for Responsible Banking.
  • Industrial Bank pledged its commitment to aligning its banking strategy with the Paris Agreement.
  • The Bank gives priority to funding energy-saving industries, strengthens the regulation of credit policies and the compliance control of industries such as papermaking, cement, textile and apparel, and clearly stipulates regional policies, green financial technology standards and requirements, as well as environmental conditions, etc.

SDG 16: Peace, Justice, and Strong Institutions 

  • Industrial Bank has built up a cross-market financial service system integrating online and offline banking, domestic and foreign currencies, offshore and onshore finance and investment and financing.
  • Sustainable Banking: Managing the Social and Environmental Impact of Financial Institutions, a book on the frontier of international sustainable banking introduced and translated by the Bank, was published by China Environment Publishing Group in June 2019.
  • Diversified composition of the Board of Directors: By the end of 2019, the Board of Directors had 14 members, among whom five are equity directors, four are executive directors, and five are independent directors.

 SDG 17: Partnerships for the Goals 

  • It has established correspondent bank relationships with more than 1,400 banks around the world
 

Industrial Bank (China) is clearly a leading example of a financial institution implementing sustainable and environmental policies throughout their business structure. The bank has continued to support businesses that save energy and reduce their emissions; for instance, they have eliminated credit limits to branches granting loans to renewable energies. It is dedicated to financial services that support energy conservation, emission reduction, sustainable development, and green finance operations.

 They are commended for their employee outreach but the effects of training may only begin to become apparent in the long-term since the scope of social risk assessment is so wide. They do not have many certifications to help give their enterprises credibility, but they do have a healthy history of innovation and have many initiatives that seem to be effective.

However, the bank has made a few listings such as MSCI and received notable awards. They do comply with a number of the UN SDGs, but could be doing more to directly align their policies with each goal.

 The group is transparent in terms of reporting; however, Industrial Bank has yet to obtain assurance from an independent third party for their E&S risk management systems, although Industrial Bank employs a professional third party auditing organization to carry out E&S risk due diligence for all projects related to the EPs. Their progress and current goals seem less direct than previous successes.

 The Bank took the lead in formulating and issuing the Business Guideline of Green Supply Chain Finance in China in September, 2019, clarifying the concept of green supply chain finance and are paving the way in incorporating sustainability seamlessly into their practices. 

Due to their transparency, innovative nature and general success, Industrial Bank can be awarded a ‘B’ rating.

Analyst Outlook: Neutral

Despite the past successes of the Industrial Bank (China), their future targets are not entirely clear or measurable. However, the bank has actively withdrawn from deals involving companies part of the chemical and oil industries.

Key Points

  • Acknowledge and align their own initiatives with the UN SDGs 
  • One of the first of China’s banks to be actively involved in sustainable initiatives
  • Few certifications, but good number of relevant awards and listings
  • Transparent and frequent reporting
  • Targets focusing on long term goals and successes not just short term
  • Have done a lot to help out, especially financially, in aid and relief
  • Strong anti-corruption policies
  • Have maintained relations with wider industries
  • Industrial Bank sells the first offshore carbon neutrality bond
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