BEIJING, Dec. 28, 2023 /PRNewswire/ — Industrial Bank (Shanghai:601166) (“the Bank”) announced a significant upgrade, from A to AA, in the 2023 Environmental, Social, and Governance (ESG) rating by MSCI, a leading global index provider. The upgrade positions Industrial Bank at the highest ESG rating level within China’s banking sector. Consequently, Industrial Bank has become the first publicly-listed bank in the country to secure the AA ESG rating from MSCI. The bank also holds the distinction of being the first among its peers to maintain the top ESG rating for five consecutive years.
Environment (E): Green Finance Leadership
As one of the earliest commercial banks to pioneer green finance in China, Industrial Bank has effectively integrated the expansion of green financing solutions into its sustainable development agenda. The approach aligns with the Chinese government’s initiatives for achieving carbon peak and neutrality. The efforts in fostering a green and low-carbon economic transformation have positioned the bank as a benchmark in the industry for supporting the nation’s ambitious dual carbon objectives. As of the end of September 30, 2023, the green financing portfolio registered at 1.86 trillion yuan (approximately US$260.4 billion), marking an increase of 250.1 billion yuan (approximately US$35 billion) from the end of 2022. Outstanding green loans reached 772.4 billion yuan (approximately US$108.1 billion), up by 135.3 billion yuan (approximately US$18.9 billion) from the end of the previous fiscal year. Notably, the increase in green loans accounted for more than 30% of newly added corporate lending. Furthermore, a significant portion of the green financing — 1.04 trillion yuan (approximately US$145.6 billion), or 56% of the total green finance portfolio — is allocated to carbon reduction initiatives, a 7 percentage point increase from the end of last year.
Social (S): A Commitment to Innovation, SME Support, and Inclusive Growth
Industrial Bank has proactively directed financial resources towards technological innovation, advanced manufacturing, sustainability, and support for small to medium-sized enterprises (SMEs). The Bank is also innovating in digital financial services, extending the reach from urban to rural areas and broadening the client base to include micro and small enterprises (MSEs). As of the end of September 30, 2023, outstanding loans to MSEs neared 500 billion yuan (approximately US$70 billion). Concurrently, the loan portfolio dedicated to innovative technology companies exceeded 430 billion yuan (approximately US$60.2 billion), while the commitment to the agricultural sector was reflected in a loan balance surpassing 640 billion yuan (approximately US$89.6 billion). Complementing the financial initiatives, the bank has prioritized human resource development, establishing a science-based human resource management framework and intensifying staff development. The initiative is further reinforced by the publication of the ‘Key Points of Human Resources Development’ handbook, underscoring a commitment to fostering an inclusive workplace and a diverse workforce. In 2022, the bank successfully reduced employee turnover by 25% from the previous year.
Governance (G): Pioneering Sustainable Practices
Industrial Bank continues to lead the sector in sustainable corporate governance, having integrated an ESG strategy into the long-term development plan. The integration is a key component of the five-year strategic outlook. Reinforcing this commitment is the establishment of a dedicated Strategy and ESG Committee at the board level. Operational and management processes, including credit policies and procedures, have been aligned with the ESG strategy, reflecting the commitment to sustainable and responsible business practices. The bank maintains a robust and comprehensive governance framework, consistently focusing on enhancing systems to mitigate integrity risks and fortify internal governance mechanisms. As part of these efforts, the Industry Bank has developed and disseminated the ‘Key Points of the Anti-Bribery and Anti-Corruption System’. The initiative is fundamental to the goal of fostering a culture of financial integrity and ethical business conduct.
