LOCAL commercial lender China Banking Corp. (China Bank) is seen to put its efforts more on sustainability as part of its overall strategy to achieve its business goals.
In a recent event, China Bank said their strategy now includes sustainability and revenue growth as “strong interlinked components” that go hand-in-hand to sustain corporate performance, protect the environment, and create stakeholder value.
The bank said it positions its sustainability initiatives through three key priorities or channels—through its people, through its financing activities, and through risk management.
“Being aware of the impacts of climate change to the Bank, we are currently putting more emphasis in conducting a vulnerability assessment of our asset portfolio to transition and physical risks, and reviewing our risk appetite statement to include climate change risks,” China Bank Chief Finance Officer Patrick D. Cheng said.
So far, China Bank said it has established a sustainability team, raised $150 million through its maiden green bonds, arranged sustainability-themed capital market deals, and developed an environment & social risk management framework to protect its assets from climate change risks.
“We believe that the Bank’s revenues should not be gained at the expense of poor governance, which is why we evaluate projects on a long-term basis,” Cheng said.
However, the bank official said there are challenges in fully implementing a sustainable portfolio.
“For example, while the bank highly supports the use of renewable energy, we cannot simply terminate its funding to fossil-fueled projects as it generates more than 70 percent of the country’s energy needs,” Cheng said.
“We believe that proper education and financing should be available to companies as we wish to transition into a low-carbon economy. In addition, there should be a collaboration between the public and private sectors as it recognizes that the shift to renewable energy should be in phases,” he added.