In recent years, global capital markets have been placing an increasing emphasis on the efforts and contributions made by listed entities in promoting global sustainable development. Not only are their measures in focusing on climate change mitigation and environmental improvement drawing more and more attention, their performance in safeguarding the rights and interests of customers, shareholders, employees, society and other stakeholders are also gaining importance. The focus of all parties involved, especially institutional investors, is gradually shifting from short-term financial performance to long-term value creation.
With the resultant acceleration in the growth of the Green Financial Market, financial institutions must actively respond to the sustainable development initiatives, participate in the formulation of international standards for green finance and infrastructure construction and promote Green Investment Principles so as to boost the development of global green finance through innovation and development and directly contribute to social progress and common prosperity.
As one of the largest banks in the world, China Construction Bank Corporation (CCB) has actively explored new concepts in the development of the global green financing industry.
In a bid to become a low-carbon, environmentally friendly, sustainable bank that serves the public and improves people’s livelihood globally, CCB has been utilising a combination of financial instruments including green credit, green bonds, green leases and green trusts to continuously increase financial support in areas such as energy conservation and emission reduction, clean energy, clean transportation and pollution prevention and control, to pro-actively support and foster green industries globally.
In 2022, the green credit business has maintained a relatively fast development. As of the end of 2022, the balance of the Bank’s green loans was RMB2.75 trillion, with an increase of RMB786,976 million from the previous year-end, an increase of 40.09%. The green loans accounted for 13.54% of all loans, up 2.56 percentage points from the beginning of the year. The nonperforming loan ratio for green credit was much lower than the non-performing loan for corporate loan.
CCB actively utilises the People’s Bank of China (PBC)’s monetary policy tools to facilitate the precise allocation of low-cost funds, which effectively supported the construction of projects in fields such as clean energy, energy conservation and environmental protection, carbon emission reduction technologies, and clean utilization of coal. As of the end of 2022, CCB has cumulatively issued carbon-reduction loans of RMB96,942 million, with an annual reduction of 22 million tons of carbon emissions; and the special relending for clean and efficient use of coal issued by the Bank was RMB8,654 million. At the same time, CCB continuously optimises the green loan white list mechanism and increases the support for green enterprises and projects. As of the end of 2022, CCB has cumulatively issued RMB782,546 million in green loans to white-listed clients.
In terms of issuance, CCB has actively participated in the issuance of green bonds and has issued a US$1 billion and RMB1billion “Belt and Road” themed green bonds overseas, and issued the first RMB10 billion sustainable development-linked green financial bonds domestically.
In terms of underwriting, CCB has participated in underwriting 87 green and sustainable development bonds both domestically and internationally, totaling RMB156,067 million, a year-on-year increase of 25.79%. CCB underwrote the first batch of transition bonds in China and the first green, rural revitalization, and sustainability-linked bond in the market, further expanding the range of underwriting services for green bonds.
In terms of investment and trading, CCB has placed great emphasis on green bond investments, actively supported the innovation in the market and conducted more than 300 investments and transactions in green bonds, including participating in the first sustainable linked green corporate bond in the market, the first green finance bond tied to rural revitalization, the first carbon-neutral green finance bond issued domestically and other innovative investments. The portfolio of green bonds, denominated in both domestic and foreign currencies, has increased by over 110% and 10%, respectively, from the previous year-end.
Our Bank is currently ascribed an Environmental, Social, and Governance rating of “A” by Morgan Stanley Capital International. In line with our Group’s global initiative in promoting net-zero emissions, CCB Australia has placed an emphasis on low-carbon operations and a priority on the receipt of green energy. As a direct result of the introduction of a set of specific emission reduction and carbon-offset programs in the day-to-day operations in each of our Australian offices, CCB Australia was certified Carbon Neutral by the Federal Government Agency Climate Active in the calendar year 2020. We are proud to say that we were the first Chinese organisation in Australia to receive this certification and the first entity within the CCB Group globally to receive such recognition outside of our home market in China.
At the same time, in terms of our green themed business activities in Australia, since the establishment of our branch and initial office in Sydney, we have financed and supported our Chinese clients’ investments in the renewable energy sector in Australia. Over time and with the subsequent establishment of our offices in Melbourne, Brisbane and Perth our servicing and lending activities in this sector have been extended to include several Australian and other international project sponsors.
Following the introduction of the Green Loan Principles in 2018, CCB Australia was a lender in the world’s first ever Green Loan, and in 2019 CCB Australia participated in the first sustainability-linked loan undertaken by an energy corporate in the Asia Pacific region.
Over the past 13 years of operating in Australia, CCB has developed and supported a diversified portfolio of clients in the renewable energy sector and in the provision of green and sustainability linked loans, currently supporting in excess of AUD1 billion in committed credit facilities.
CCB Australia is committed to continue its support of green energy and net-zero initiatives and programs. Our Team in Perth, supported by green financing specialists across the globe, stands ready to combine our efforts with those of Western Australian businesses in ensuring a green and sustainable future, not only for our great State, but for the world.
