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Implementing a comprehensive green finance approach

Project Details

CLIENT

Ma'anshan Rural Commercial Bank

YEAR

2015-2016

COUNTRY / REGION

China / South, Southeast & East Asia

EXPERTISE

Green Finance

Environmental & Social Impact

KEY TOPICS

Green Economy Financing

Environmental Management

E&S Risk Management

CONTACT

Ulrich Weber

With the aim of becoming the first mover in the local market for green finance, Ma’anshan Rural Commercial Bank (MRCB) contracted IPC to introduce a comprehensive green finance approach. In this 12-month project, IPC supported the bank in establishing the internal framework necessary to sustain green finance, introducing a green lending methodology to incentivise investment in environmentally friendly technologies, and implementing an environmental management system to reduce MRCB’s resource consumption. The project was implemented through a modular approach. The green lending component focused mainly on industrial clients, public institutions, and emerging mid-caps and SMEs. By the end of the project, MRCB had established a green portfolio totalling USD 70 million and approximately 1,100 staff and senior management had been trained on 11 different topics related to green finance.

Establishing a green finance organisational structure

  • developing a bank-wide green finance policy and strategy
  • creating a Green Finance Committee, comprising MRCB senior management, to approve the strategy
  • hiring and training staff for MRCB’s Green Finance Unit, the department responsible for overseeing and supporting all aspects of the bank’s green finance approach

Green lending

  • analysing MRCB’s loan portfolio to identify target client segments and potential (portfolio screening)
  • conducting walk-though and investment-grade energy audits with target client segments(corporate enterprises, emerging mid-caps and SMEs)
  • developing localised technical eligibility criteria for common investments in Ma’anshan (short list for standardisable investment measures)
  • developing green loan product design and lending strategy,
  • analysing and adapting lending policy, procedures, forms and tools to accommodate green lending
  • adjusting credit management systems to enable reporting on green investments (CO2/energy savings)
  • implementing green lending marketing and awareness-raising strategy
  • developing a training and capacity-building concept and materials
  • providing training to lending staff, future trainers, and audit staff on green lending principles
  • setting green lending incentives and targets
  • supporting green lending product launch, testing, and monitoring

Environmental management system (EMS)

  • developing a comprehensive EMS manual: responsibilities, procedures, resource management guidelines
  • developing data collection processes, including measurement methodology, for resource consumers in MRCB
  • implementing EMS software to track resource consumption in MRCB’s branches and outlets
  • supporting annual environmental management planning (baseline, incentives, targets) based on resource consumption patterns in MRCB, and identifying/implementing/monitoring measures to reduce consumption
  • establishing an internal environmental awareness-raising plan and development of content
  • developing a transparent communication plan for MRCB’s environmental performance and activities
  • implementing training on resource management for front-, middle-, and back-office branch and VTB staff
  • supporting bank compliance with, and application for, ISO-14001:2009 certification

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