The nation's environmental watchdog will work with the financial
sector to bring in an international benchmark on green credit.
The State Environmental Protection Administration (SEPA) signed
a deal with the International Finance Corporation (IFC) in Beijing
yesterday to introduce the Equator Principles in China.
The principles are a voluntary set of guidelines based on IFC
policies to incorporate social and environmental issues in project
financing.
Finance is provided only to projects that will be conducted in a
socially and environmentally responsible way that's in line with
the principles.
China introduced the green loan concept last July, part of its
enforcement of eco-friendly economic policies. Communications
between environmental monitors and banks saw some plants
blacklisted from receiving loans because of their pollution
record.
"It was proved an effective instrument to curb pollution and
lower financial risk," said Yang Chaofei, director of the SEPA's
policy department.
But increasing demand for green credit meant environmental
groups and banks needed a set of international standards, Yang
said.
Lian Gong, deputy head of credit management at the Industrial
and Commercial Bank of China (ICBC), agreed.
The ICBC surveyed its 59,000 corporate clients last year to
assess environmental performance. About 78 percent were cleared for
green loans of more than 200 million yuan, accounting for about 80
percent of the total.
"As we pushed forward with the green loan concept, the biggest
problem we faced was how to assess pollution risk for different
industries," Lian said.
The Equator Principles cover 63 sectors that cause environmental
problems, such as manufacturing, petrochemicals, energy and
infrastructure construction.
Initial collaboration between the SEPA and IFC produced
environmental, health and safety guidelines for pulp and paper
mills and the mining sector.
Li Xiaowen, from the China Banking Regulatory Commission, said
the benchmark's introduction indicated a shift in the banking
industry's focus to environmental and social issues as a business
risk.
She urged the financial sector to join with the environmental
agency to meet the nation's energy conservation and environmental
protection targets.
(China Daily January 25, 2008)
