Banking institutions play crucial role in helping attain green development: BOC chief risk officer

(ECNS) -- As facilitators of low-carbon transformation, banking institutions play a crucial role in helping attain green development, Liu Jiandong, chief risk officer of Bank of China (BOC) said via video at a side even of the 28th session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28) held in Dubai, the United Arab Emirates on Tuesday.

He pointed out that green development is a major trend in the process of the world seeking sustainable development. Bank of China is willing to work with all parties to help realize a green transition through financial strength and build a shared community of life between human and nature.

He emphasized the importance of multilateral cooperation and guiding strategies to lay a firm foundation for green finance.

Globally, BOC has increased international exchanges in recent years. For instance, it signed or joined more than 10 green and ESG-related initiatives and mechanisms, such as PRB and TCFD, in a bid to get actively integrated into global green governance, Liu said.

Spearheaded by the green strategy, the bank has continuously improved the green finance governance framework and policies, and formulated more than 20 supporting measures covering 13 aspects, such as credit approval, performance appraisal, and risk mitigation, thus greatly underpinning green development with financial strength from the strategic height.

He noted that product and service innovation should be supported to enhance adaptability of supply and demand in the field of green finance. To channel the flow of capital into green and low-carbon areas, the banking industry needs to continuously innovate diversified, specialized, and differentiated financial products and services, which can enhance the adaptability of green finance.

According to Liu the bank has worked to forge the “BOC Green+” brand by launching dozens of green finance products and services in five categories, covering loans, trade finance, bonds, consumption, and integrated services, to meet diversified needs of customers. As of the third quarter of this year, its balance of green loans exceeded 2.8 trillion yuan, ranked first among Chinese banks in the Bloomberg League Table for “Global Green Loans” and “Global Sustainability-linked Loans”.

It maintained leadership in the green bond market, and creatively issued green bonds such as the world’s first USD sustainability-linked loan bond, etc.

Against the backdrop of climate change, financial institutions should continue to better manage ESG risks associated with customers and erect a solid line of defense for the prevention and control of non-traditional financial risks.

The bank has clearly defined the responsibilities for managing ESG risks associated with customers, carried out ESG risk assessment on customers, strengthened the full-process management of credit granting and investment activities, and added binding requirements for managing environmental and social risks of customers in more than 90 industry credit policies.

Liu said a personnel training scheme for green finance during the 14th Five-Year Plan period has been devised at BOC.

It would have around 10,000 employees engaged in green finance by 2025.