Chinese Agricultural Bank Of China Limited(601288) president Zhang Qingsong said at the global wealth management forum · Shanghai suhewan Summit on January 15 that countries around the world have achieved positive results in tackling climate change, promoting green economic transformation and helping steady economic recovery. However, we should also realize that achieving carbon peak and carbon neutralization is a broad and profound systematic change in economy and society. In the process of implementation, we face many new theoretical and practical problems, which need us to correctly understand and grasp.
He said that we should look forward to the risk prevention of the transformation of high-carbon industries. At present, the stock scale of global high-carbon industries is still large, especially in some developing countries. The market demand of high-carbon industries such as steel, non-ferrous metals, building materials and chemical industry has not reached the peak. As an important field of carbon emission reduction, high-carbon industry will usher in deep changes. Policy adjustments such as carbon tax and carbon trading rules, cost pressure caused by rising energy prices, and changes in market expectations and preferences may lead to asset revaluation and financial loss risk of high-carbon enterprises. How to accurately evaluate the asset quality of high-carbon industry and prevent the risks in the process of enterprise green transformation is a subject that needs to be paid great attention to.
He introduced that by the end of 2021, the balance of green loans of ABC was nearly 2 trillion yuan, a year-on-year increase of more than 30%; The balance of green bond investment was 89.4 billion yuan, a year-on-year increase of 35%; During the year, it underwritten 27 issues of green bonds and raised 44 billion yuan.
the following is the transcript of Zhang Qingsong’s speech:
Dear Chairman Lou Jiwei, leaders, guests and friends
Good afternoon, everyone! It’s my pleasure to discuss the topic of “the challenge of green transformation of global economy and the role of financial industry” with you by video.
The superposition of century changes and century epidemics has brought serious challenges to global economic development. Facing the dual tasks of economic recovery and environmental protection, green transformation has become a global consensus. China has always advocated the concept of green development and is a practitioner and leader in the construction of ecological civilization.
Countries around the world have made positive achievements in jointly addressing climate change, promoting green economic transformation and helping the steady economic recovery. However, we should also realize that achieving carbon peak and carbon neutralization is a broad and profound systematic change in economy and society. In the process of implementation, we face many new theoretical and practical problems, which need us to correctly understand and grasp.
First, the overall grasp of the withdrawal of traditional energy and the substitution of new energy. In 2021, the global extreme weather frequently pushed up the energy demand. In addition, the carbon emission reduction action and the impact of the epidemic affected the supply rhythm. The supply and demand of the global energy market were mismatched, the prices soared rapidly in the short term, and energy shortages occurred in many countries. In the long run, energy low-carbon transformation is the key measure to achieve the “double carbon” goal and the internal requirement to promote high-quality development, which should be unswervingly pushed forward. How to balance the relationship between short-term energy supply and medium – and long-term transformation, and orderly realize the safe and reliable substitution of new energy for traditional energy in accordance with the requirements of establishing first and then breaking, step by step, is an issue that needs to be focused on and comprehensively grasped.
The second is the forward-looking prevention of the transformation risk of high-carbon industry. At present, the stock scale of global high-carbon industries is still large, especially in some developing countries. The market demand of high-carbon industries such as steel, non-ferrous metals, building materials and chemical industry has not reached the peak. As an important field of carbon emission reduction, high-carbon industry will usher in deep changes. Policy adjustments such as carbon tax and carbon trading rules, cost pressure caused by rising energy prices, and changes in market expectations and preferences may lead to asset revaluation and financial loss risk of high-carbon enterprises. How to accurately evaluate the asset quality of high-carbon industry and prevent the risks in the process of enterprise green transformation is a subject that needs to be paid great attention to.
Third, green and low-carbon technologies work together to tackle key problems. Historical experience has proved that every industrial change and economic transformation is inseparable from the support of scientific and technological revolution. To achieve green transformation, we also need to make breakthroughs in clean energy technologies and various low-carbon, zero carbon and negative carbon technologies. The R & D of green and low-carbon technology has large investment and long cycle, and there is great uncertainty from experimental demonstration to commercial operation. It is difficult to solve the problem by market means alone. Especially under the background that the impact of the current epidemic has blocked the industrial chain and supply chain, it is more necessary for the government, finance, enterprises and other stakeholders to strengthen cooperation and form supporting measures in policy support, capital supply, talent training and so on Play a combination punch.
All along, financial institutions have been important participants and promoters in helping green development and solving transformation problems. As an important part of the global financial system, the Bank Of China Limited(601988) industry has deeply practiced the concept of sustainable development, continuously improved the level of environmental and social risk management, and provided important financial solutions to maintain the stability of the ecosystem.
Agricultural Bank Of China Limited(601288) is a global systemically important bank. It is based on serving “agriculture, rural areas and farmers” and takes green as the “beautiful background”. It has a natural and close relationship with green development. It has actively explored and practiced in promoting service for “agriculture, rural areas and farmers”, green transformation and economic recovery, and has initially formed some experience and characteristics.
First, adhere to strategic guidance. Agricultural Bank Of China Limited(601288) set up a strategic planning and Sustainable Development Committee under the board of directors, the first working committee of “carbon neutralization” in the industry, and a green finance committee at the senior management to realize the overall planning, organization and leadership of green finance business. Green finance was listed as one of the three major strategies in the bank’s 14th five year plan, specially formulated the green finance business development plan, successively issued a series of documents such as green finance guidance and action plan, comprehensively established the bank’s green finance development system framework, defined the implementation path, and took protecting the ecological environment and coping with climate change as key areas, Strive to explore and build a financial development model of harmonious coexistence with nature.
Second, adhere to innovation driven. Agricultural Bank Of China Limited(601288) focus on key areas such as green economic transformation and tackling green and low-carbon technologies, and comprehensively promote innovation in systems, products and services. We strengthened policy allocation and successively issued a number of new energy credit policies such as typhoon power and Cecep Solar Energy Co.Ltd(000591) power generation. At the same time, based on the basic national conditions dominated by coal, we actively supported the stable production and supply of energy and ensured the reasonable financing needs of coal power enterprises. Highlight the characteristics of “agriculture, rural areas and farmers” and increase the support for the whole industrial chain of green agriculture such as ecological planting, ecological breeding and forest economy. We increased product innovation, launched the first batch of green bond investment and financing businesses such as carbon neutral bonds and sustainable development linked bonds among financial institutions, and successfully landed the first carbon emission right pledge loan in the national carbon trading market. By the end of 2021, the balance of green loans of Agricultural Bank of China was nearly 2 trillion yuan, a year-on-year increase of more than 30%; The balance of green bond investment was 89.4 billion yuan, a year-on-year increase of 35%; During the year, it underwritten 27 issues of green bonds and raised 44 billion yuan.
Third, adhere to risk control. Agricultural Bank Of China Limited(601288) attach great importance to the sustainable development of green financial business and actively deal with the potential risks in the green economic transformation. In formulating credit risk related systems and measures, we strengthened the comprehensive coverage, classified management and whole process control of environmental and social risk management, and implemented the “one vote veto system” for non eco-friendly customers and projects. For key customers with high energy consumption and high emission, implement industry quota management and strengthen monitoring and early warning.
At the same time, actively use ESG risk management tools such as scenario analysis and stress test to study the impact of climate change on corporate financial status and credit risk, and strive to improve the fine management level of environmental and social risks.
Fourth, adhere to openness and cooperation. Agricultural Bank Of China Limited(601288) always adhere to the principle of openness and inclusiveness, and accelerate the integration of green financial business with international standards. In 2019, the one batch of the first one signed the “one belt, one road” green investment principle, and successfully joined the principle of responsible Bank (PRB principle) in 2021, and participated in the fifteenth conference of the parties to the Convention on biological diversity. It signed the joint declaration of banking financial institutions supporting biodiversity conservation and the climate friendly bank Beijing initiative. In 2020 and 2021, it won the awards of “best green Bond Bank of the year” and “Best Green Financial Bank of the year” in Asian currency.
In the next step, Agricultural Bank Of China Limited(601288) will unswervingly follow the path of green, low-carbon and sustainable development, incorporate the “double carbon” requirements into the whole process and fields of operation and management, continuously expand the supply of green funds, and ensure that the growth rate of green loans during the 14th Five Year Plan period is continuously higher than that of loans throughout the bank. At the same time, we will strengthen exchanges and cooperation, deepen reform and innovation, strengthen risk management and control, coordinate the risk prevention and control of financial services and high-carbon industry transformation in key areas of green development, ensure the healthy and sustainable development of green financial business, and continuously contribute new strength to the green recovery of China and the global economy!
Thank you!
