SBFN Member Since:
2012
Member Organisations
China Banking and Insurance Regulatory Commission
Superintendence of Banks and Financial Institutions of Chile (SBIF)
China Banking Association
Progress Against Pillars and Sub Pillars
This graphic can also be found within this country’s 2019 Country Progress Report.
Framework Documents
| 2022 | China Banking and Insurance Regulatory Commission (CBIRC) | |
| 2021 | People’s Bank of China | |
Guidance on Promoting Investment and Financing to Address Climate Change | 2020 | People’s Bank of China |
| 2019 | Ministry of Ecology and Environment of the People’s Republic of China | |
| 2018 | People’s Bank of China | |
| 2018 | Asset Management Association of China | |
| 2018 | People’s Bank of China | |
Compulsory Environmental Pollution Liability Insurance Regulation | 2018 | Ministry of Ecology and Environment of the People’s Republic of China |
| 2017 | National Association of Financial Market Institutional Investors | |
| 2017 | International Institute of Green Finance | |
| 2017 | China Securities Regulatory Commission | |
Impact of Environmental Factors on Credit Risk of Commercial Banks | 2016 | Industrial and Commercial Bank of China |
| 2016 | People’s Bank of China | |
| 2016 | China Securities Regulatory Commission (CSRC) | |
| 2016 | China Securities Regulatory Commission (CSRC) | |
| 2014 | China Banking and Insurance Regulatory Commission (CBIRC) | |
| 2013 | China Banking and Insurance Regulatory Commission (CBIRC) | |
| 2012 | China Banking and Insurance Regulatory Commission (CBIRC) | |
| 2007 | China Banking and Insurance Regulatory Commission (CBIRC) | |
| 2020 | National Development Reform Commission (NDRC), People’s Bank of China (PBoC), China Securities Regulatory Commission (CSRC) | |
Guidelines on Environmental Information Disclosure for Financial Institutions | 2021 | People’s Bank of China |
Strategic Development - Alignment with global E&S standards and best market practices
S1.1 – Does the framework make reference to international E&S targets (SDGs, Paris Agreement, Global Compact)?
Yes
(3) – 4.21.3
(4) & (9)
Global Compact
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S1.2 – Does the framework make reference to established international E&S risk management standards (IFC PSs, EPs)?
No
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S1.3 – Does the framework make reference to established international sustainability reporting standards (GRI, SASB)?
No
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S1.4 – Does the framework make reference to established international climate finance reporting standards (TCFD)?
No
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S1.5 – Does the framework ask to make E&S policies, practices and results externally verified (assurance, independent review)?
Yes
(1) – Chapter IV, 24 (page 5)
(4) – Article 8
“Article 8 The responsibilities of the Green Bank Evaluation Expert Group are: review and approve the green bank evaluation implementation plan”
“If necessary, banks may engage qualified and independent third party to conduct evaluation or audit on banks’ fulfillment of E&S responsibilities.”
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Strategic Development - Multi-stakeholder collaboration
S2.1 – Does the framework involve interagency collaboration between financial supervisors/regulators, industry association, and FIs?
Yes
S2.2 – Does this collaboration also include other public agencies (e.g., environmental agencies, ministries)?
Yes
(1) – Chapter 25
(6) – page 8 (intro)
“Launched in July 2007 by three agencies: Ministry of Environmental Protection (MEP), China Banking Regulatory Commission (CBRC) and People’s Bank of China (PBOC)”
The Guidelines were established by the PBoC and six other ministries.
Green Credit Guidelines (CBRC, 2012) | Guidelines for Establishing the Green Financial System (2016) |
S2.3 – Does this collaboration also include representatives of civil society (e.g., NGOs, associations, media)?
(3) – 5.24.3(4) – Chapter II, Article 8
KPI 5.24.3: “The banking institutions shall communicate and interact with stakeholders through various effective methods, improve the environmental and social risk management by absorbing the suggestions and opinions put forward by stakeholders. “Article 8 “The Green Bank Evaluation Expert Group consists of green credit experts recommended by major banks, as well as green credit experts from third-party intermediaries, NGOs, academic research institutions, etc., and selected by the China Banking Association.” – to be confirmed.
Green Credit Key Performance Indicators (CBRC, 2014) | Green Banking Assessment Plan (Pilot) (CBA, 2017)
Strategic Development - Alignment to NDCs and with National or Regional Climate Change Targets
S3.1 – Is the framework aligned with national NDCs or other national and regional policies on climate?
Yes
(6) – page 8 §1
Reference to the Overall Plan for the Structural Reform for Ecological Civilization
Guidelines for Establishing the Green Financial System (2016)
S3.2 – Has the SBN member identified the main climate risks (transition/physical) for their local financial sector?
No
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ESG Integration - Governance of E&S
Role of Governing Bodies on E & S
E1.1 – Does the country policy require one of the FI’s governing bodies (e.g., Board of Directors, Executive Committee, Supervisory Board, etc.) to approve an E&S strategy?
Yes
(1) – Chapter II, 6-9
(3) – I. (2.7.1 and 2.7.2)
Is it admitted that the “green credit strategy” is similar to the “E&S strategy?
“Banks’ Board of Directors or Council shall promote concepts related to green credit including resource efficiency, environmental protection and sustainable development, emphasize banks’ role in contributing to the comprehensive, balanced and sustainable social and economic development, and develop a sustainable business model that allows win-win for banks and the society at large.”
“Banks’ Board of Directors or Council is responsible for defining its green credit growth strategy, approves banks’ green credit targets and reports that are developed by senior management, monitors and evaluates banks’ implementation of the green credit growth strategy”
Green Credit Guidelines (CBRC, 2012)
E1.2 – Does the policy require management to report on E&S strategy implementation to the governing bodies?
Yes
(1) – Chapter II, 8. (page 2)
(3) – 2.7.1 – 2.7.3 Responsibility of the Board of Directors, FI audit, 2.8.1-2.8.6 Responsibilities of the senior management
“Banks’ senior management shall […] provide annual report on green credit performances to the Board or Council, and report to regulators”
“KPI 2.7.3 (1) The board of directors shall put forward report requirements on the management team, and identify report duties undertaken by the management team according to the green credit strategy and objectives approved by the board of directors. ”
KPI 2.8.6:” Regularly (at least annually) report to the board on the implementation of green credit strategy. “
Green Credit Guidelines (CBRC, 2012) | Green Credit Key Performance Indicators (CBRC, 2014)
E1.3 – Does the policy require FI operational bodies to report to the governing bodies (or specific Board committee) on implementation of the E&S strategy?
Yes
(3) – 2.7.3 Responsibility of the Board of Directors, FI audit
KPI 2.7.3 (3) The audit committee of the board of directors shall carry out special audits on typical projects by random selection on environmental and social risks management by hiring the third party audit institution or entrusting the internal audit department of the bank.
Green Credit Key Performance Indicators (CBRC, 2014)
Organization
E1.4 – Does the framework ask FIs to define E&S roles and responsibilities?
Yes
(1) – Chapter II, 9. (page 2)
(3) 2.9.1 -2.9.3 Dedicated officer and department
Banks’ senior management shall identify a senior manager and a department to lead and manage green credit related work and provide necessary resources. If necessary, a cross-function green credit committee may be established to coordinate.
Green Credit Guidelines (CBRC, 2012) | Green Credit Key Performance Indicators (CBRC, 2014)
E1.5 – Does the framework highlight the E&S roles of front office staff and second lines of defense (e.g. risk officers and/or compliance officers)?
Yes
(3) – 3.14.4 & 3.14.5 Capacity and 4.16.2
KPI 3.14.5: “(3)To establish a “cross-line” team which can enhance the environmental and social performance of the institution. The members shall include personnel from public relationships, risk management, company line and credit management line.”
KPI 4.16.2: “To make sure that the employees engaged in project compliance examination have sufficient knowledge and experience, or when necessary, with the help from experts to make proper judgment on the requirements of formal and substantial compliance of the project whom credit will be granted. “
Green Credit Key Performance Indicators (CBRC, 2014)
E1.6 – Does the framework ask FIs to define E&S competencies for each role?
No
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E&S Risk Management
E&S Policy
E2.1 – Does the framework ask FIs to formalize an E&S or ESG policy?
Yes
(1) – Chapter III, 10 (page 2)
(3) 3.10.1-3.10.4 Formalize E&S policy
Banks shall develop and improve policies, systems and procedures for E&S risk management
Green Credit Guidelines (CBRC, 2012) | Green Credit Key Performance Indicators (CBRC, 2014)
E2.2 – Does the framework encourage FIs to go beyond E&S requirements of local laws and regulations?
No
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E2.3 – Does the framework ask FIs to set E&S objectives and targets?
Yes
(1) – Chapter II, 8. (page 2)
(3) – 2.7.2, 5.23.1-3 Objective and KPIs
“Banks’ senior management shall, following decisions made by the Board or Council, develop green credit targets”
“The board of directors approves the implementation of the annual and middle and long term objectives of green credit strategy.”
Green Credit Guidelines (CBRC, 2012) | Green Credit Key Performance Indicators (CBRC, 2014)
E2.4 -Does the framework ask FIs to publicly disclose their E&S policy and its governance?
Yes
(1) – Chapter V, 24 (page 4)
(3) – 5.24.1 Information disclosure
“Banks shall disclose green credit strategy and policies, and green credit implementation status.”
KPI 5.24.1 “To issue green credit/ social responsibilities report/ sustainable development report of the institution and disclose information cared by stakeholders:”
Green Credit Guidelines (CBRC, 2012) | Green Credit Key Performance Indicators (CBRC, 2014)
Risk Assessment
E2.5 – Does the framework require FIs to carry out appropriate E&S due diligence at transaction level?
Yes
(1) – Chapter IV, 15 (page 3)
(3) 4.15.1-4.15.7 ESDD for client and its project
Banks shall strengthen due diligence. Banks shall determine scope of E&S risk due diligence based on sectors and geographic features of clients or their projects, to ensure a comprehensive, thorough and detailed assessment.
Green Credit Guidelines (CBRC, 2012) | Green Credit Key Performance Indicators (CBRC, 2014)
E2.6 – Does the framework require FIs to carry out appropriate E&S due diligence at client level?
Yes
(1) – Chapter III, 11 (page 2) and Chapter IV, 15 (page 3)
“Banks shall develop a client E&S risk rating standard to assess and categorize clients’ E&S risks.”
“Banks shall strengthen due diligence. Banks shall determine scope of E&S risk due diligence based on sectors and geographic features of clients or their projects, to ensure a comprehensive, thorough and detailed assessment.”
Green Credit Guidelines (CBRC, 2012)
E2.7 – Does the framework encourage FIs to categorize projects/clients according to their level of E&S risk?
Yes
(1) – Chapter III, 11 (page 2)
(3) – 3.11.1-3.11.5 Categorization and 4.17.1
Banks shall develop a client E&S risk rating standard to assess and categorize clients’ E&S risks.
Green Credit Guidelines (CBRC, 2012) | Green Credit Key Performance Indicators (CBRC, 2014)
E2.8 – For high-risk transactions, does the framework encourage site visits to be organized?
Yes
(3) – 4.20.1
Only for Energy Efficiency projects
KPI 4.20.1 “(2)The loan institution shall carry out onsite inspection on the implementation of environmental and social risk management system and risk response plan of the client at least every half year”
Green Credit Key Performance Indicators (CBRC, 2014)
E2.9 – In case of negative E&S impacts, does the framework invite FIs to engage with clients to implement mitigation measures?
Yes
(1) – Chapter III, 11 (page 2)
(3) 4.17.5 E&S risk mitigation measures
Banks shall develop a list of clients with major E&S risks. Such clients shall be requested to develop and implement action plans for major risks involved
Green Credit Guidelines (CBRC, 2012) | Green Credit Key Performance Indicators (CBRC, 2014)
E&S Covenants
E2.10 – Does the framework ask FIs to incorporate E&S covenants and investment conditions into legal agreements with clients?
Yes
(1) – Chapter IV, 18 (page 3)
(3) – 4.18.1 & 4.18.2
Banks shall improve loan agreements to urge clients to improve E&S risk management. For clients that involve major E&S risks, loan agreements shall request clients to provide E&S risks reports, contain client representations and warranties on improving E&S risk management, design covenants so that clients shall be subject to lender supervision, and provide remedies for banks in case of any breach by client on E&S aspects.
Green Credit Guidelines (CBRC, 2012) | Green Credit Key Performance Indicators (CBRC, 2014)
Project Supervision & Portfolio Review
E2.11 – Does the framework ask FIs to develop processes to manage E&S risks during supervision?
Yes
(1) – Chapter IV, 18 (page 3)
(3) – Article 20, 4.20.1-4.20.4 Portfolio management and supervision policy
Article 20 Banking institutions shall strengthen post-loan management. As for clients involving potential major environmental and social risks, relevant and pertinent post-loan management actions shall be developed and implemented. They shall watch closely the impact of national policies on the clients’ operation, step up dynamic analysis, and make timely adjustment to asset risk classification, reserve provisioning and loss write-off. They shall establish and improve internal reporting system and accountability system concerning major environmental and social risks faced by the clients. Where major environmental or social risk event occurs to the client, the banking institution concerned shall timely take relevant risk responses and report to competent supervisory authorities on potential impact of said event on itself.
“Banks shall improve loan agreements to urge clients to improve E&S risk management. For clients that involve major E&S risks, loan agreements shall request clients to provide E&S risks reports, contain client representations and warranties on improving E&S risk management, design covenants so that clients shall be subject to lender supervision, and provide remedies for banks in case of any breach by client on E&S aspects.”
Green Credit Guidelines (CBRC, 2012) | Green Credit Key Performance Indicators (CBRC, 2014)
E2.12 – Does the framework encourage a periodic review of E&S risks at aggregate portfolio level?
Yes
(1) – Chapter IV, 20 (page 4)
(3) 4.20.3 Portfolio E&S analysis and stress testing
Banks shall strengthen portfolio management. Banks shall develop and implement specific portfolio management measures for clients with major potential E&S risks.
Green Credit Guidelines (CBRC, 2012) | Green Credit Key Performance Indicators (CBRC, 2014)
Training
E2.13 – Does the framework ask FIs to develop and maintain E&S capacity through regular training?
Yes
(1) – Chapter III, 14 (page 3)
(3) – 3.14.4 Green credit training
“Banks shall strengthen capacity building on green credit, develop and improve green credit business definition, categorization and statistics, improve relevant credit management system, enhance green credit training, recruit and train specialized staff.”
KPI 3.14.4; “To strengthen the building of the staff, continuously enhance green credit training, develop and employ related professionals.”
Green Credit Guidelines (CBRC, 2012) | Green Credit Key Performance Indicators (CBRC, 2014)
E2.14 – Does the framework highlight the training of (i) front office staff, (ii) second lines of defense (risk officers and/or compliance officers), and (iii) E&S experts?
No
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External Communication Mechanism
E2.15 – Does the policy require FIs to establish and maintain an inquiry/complaints/grievance mechanism in relation to E&S or ESG practices?
No
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E & S Reporting
E2.16 – Does the policy require FIs to report regularly on E&S or ESG performance, including publicly, to investors or to regulators?
Yes
(1) – Chapter IV, 20 (page 4)
(3) 5.24.2-3 Information report for major risk project and stakeholder engagement
Banks shall develop and improve an internal reporting and accountability system for major client E&S risks. In case of major E&S issues, banks should take measures in a timely manner and report to regulators on potential risks that banks are exposed to.
Green Credit Guidelines (CBRC, 2012) | Green Credit Key Performance Indicators (CBRC, 2014)
E2.17 – Does the policy make E&S or ESG reporting and disclosure more consistent across financial institutions through principles, guidelines, or templates?
Yes
(2) & (3)
Green Credit Statistics & Reporting Template (CBRC, 2013) | Green Credit Key Performance Indicators (CBRC, 2014)
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E & S Integration - Enforcement
E3.1 – Is the implementation of the framework regularly verified or is information regularly collected from FIs?
Yes
(4)
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Green Banking Assessment Plan (Pilot) (CBA, 2017)
E3.2 – Is there any financial and/or non-financial incentive for establishing ESRM systems?
No
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E3.3 – Are there sanctions/penalties/warnings in case of noncompliance with the framework?
Yes
(5)
Comment from IFC: A little bit tricky. PBOC’s MPA only include data for green capital flow not other ESMS data.
“In pursuance to the Guidelines, banks shall conduct comprehensive evaluation on green credit performances at least twice a year and file self-evaluation reports to CBRC.”
“CBRC shall strengthen guidance provided to banks to conduct self-evaluation on green credit performances, fully assess banks’ green credit results based on offsite monitoring and on-site inspections, and use such results as important basis for regulatory rating, licensing, senior management performance evaluation in accordance with relevant laws and regulations.”
“If the assessment data is not properly reported, The People’s Bank of China will deal with the relevant provisions in a serious manner and request that the rectification be made within a time limit.” (page 9 PBoC’s notification, bilingual version)
People’s Bank of China Notice on Evaluating Green Credit Performances (PBOC, 2018)
Climate and Green Finance - Products and Services
Defining sustainable assets and financial products
C1.1 – Does the framework provide definitions and examples of green assets?
Yes
(1) – Article 3, Definition
(2) – tab 1
(6) – page 8 (§1 & §2)
(7) – from page 7
These economic activities include the financing, operation and risk management for projects in areas such as environmental protection, energy savings, clean energy, green transportation, and green buildings
Green Credit Guidelines (CBRC, 2012) | Green Credit Statistics & Reporting Template (CBRC, 2013) | Guidelines for Establishing the Green Financial System (2016) | China Green Bond Endorsed Project Catalogue (PBOC, 2015)
C1.2 – Does the framework provide a comprehensive taxonomy of green assets?
Yes
(7) – from page 7
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China Green Bond Endorsed Project Catalogue (PBOC, 2015)
C1.3 – Does the framework provide definitions, examples, or a taxonomy of social and/or sustainable assets?
No
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C1.4 – Besides debt products (loans, bonds), does the framework provide definitions and examples of different types of sustainable finance products/services (e.g., saving accounts, means of payment, insurance, private equity, etc.)?
Yes
(6) – page 8 (§2)
(3) – 3.12.1 to 3.12.4
The green financial system refers to the institutional arrangement that utilizes financial instruments such as green credit, green bonds, green stock indices and related products, green development funds, green insurance, and carbon finance,as well as relevant policy incentives to support the green transformation of the economy
Guidelines for Establishing the Green Financial System (2016) | Green Credit Key Performance Indicators (CBRC, 2014)
Green Finance Product Guidelines
C1.5 – Does the framework provide guidelines for green loan/green credit or other green financial assets (excluding green bonds)?
No
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C1.6 – Does the framework provide guidelines for issuance of green bonds?
Yes
(6) – page 10 (§12 and §16)
“Improve the rules and regulations for green bonds and unify the green bond definitions. Research and improve the relevant regulations and self-discipline rules for issuance of green bonds.”
“Support the development of green bond indices, green equity indices and related products.”
Guidelines for Establishing the Green Financial System (2016)
C1.7 – Does the framework refer to existing standards (e.g., ICMA’s Green Bond Principles or CBI’s Climate Bonds Standard)?
Yes
(7) – page 2, part II., §1
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China Green Bond Endorsed Project Catalogue (PBOC, 2015)
C1.8 – Does the framework recommend external party verification (e.g., second party opinion, assurance, certification)?
Yes
(6) – page 10 (§14)
Explore ways to formulate standards for third party verification of green bonds and green credit rating. Standardize the quality requirements for third party verification of green bonds. Encourage institutional investors to make use of green verification reports in investment decision-making.
Guidelines for Establishing the Green Financial System (2016)
Climate and Green Finance - Climate and Green Investment Reporting
Tracking and Disclosure of Climate & Green Finance
C2.1 – Does the framework ask FIs to report on climate/green finance flows (quantitatively or qualitatively)?
Yes
(2) & (5)
PBoC’s notification: “EVALUATION OF INDICATORS AND METHODS” page 8 of bilingual version)
Green Credit Statistics & Reporting Template (CBRC, 2013) | People’s Bank of China Notice on Evaluating Green Credit Performances (PBOC, 2018)
C2.2 – Does the framework ask FIs to report on climate risk exposure at portfolio level?
Yes
(2) – Annex 2 Statistical table of credit for enterprises with backward production capacity
Measures a kind of exposure to transition risk – no measurement asked for physical risks.
Green Credit Statistics & Reporting Template (CBRC, 2013)
C2.3 – Does the framework encourage FIs to report publicly on their green finance activities (i.e. not only to the regulator)?
No
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Climate and Green Finance - Measurement
Calculation of Environmental Benefits
C3.1 – Does the framework ask FIs to calculate the environmental benefits of their investments? (e.g., CO2 emission reduction, water saving, etc.)
Yes
(2)
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Green Credit Statistics & Reporting Template (CBRC, 2013)
C3.2 – Does the framework provide a taxonomy of potential environmental impacts?
No
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C3.3 – Does the framework provide methodologies, tools, and/or templates to measure and report these impacts?
Yes
(2)
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Green Credit Statistics & Reporting Template (CBRC, 2013)
Climate Risk Exposure Assessment
C3.4 – Does the framework ask FIs to monitor climate risk exposure at portfolio level?
Yes
(2)
(3) – Part II – Quantitative KPIs
(5)
PBoC’s notification: “EVALUATION OF INDICATORS AND METHODS” page 8 of bilingual version)
Green Credit Statistics & Reporting Template (CBRC, 2013) | Green Credit Key Performance Indicators (CBRC, 2014) | People’s Bank of China Notice on Evaluating Green Credit Performances (PBOC, 2018)
C3.5 – Does the framework refer to specific climate risk exposure methodologies (e.g., climate scenario analysis, climate risk stress testing, calculation of carbon risk exposure, tracking of energy efficiency for real estate portfolio)?
No
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C3.6 – Does the framework encourage FIs to take mitigating steps on these risks?
No
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Climate and Green Finance - Incentives
Financial and Non-Financial Incentives
C4.1 – Does the framework provide any type of incentives for green financial products and services?
No
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C4.2 – More specifically, does the framework introduce financial incentives on green products and services?
No
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