ESG: Inside China’s banking battle to go green
China’s lenders are keen to go green, as Ping An Bank chairman Xie Yonglin tells Euromoney. Regulators want that, too – but embracing ESG in a country still in thrall to dirty industry is easier said than done.
China has set out targets in its fight to tackle climate change and insidious pollution, both of which threaten to undermine stability at home.
In September, president Xi Jinping said carbon emissions would peak by 2030, with carbon neutrality reached by 2060.
However, the economy got big by growing dirty. Coal is still the largest – and still the fastest growing – source of energy. Oil is second. The eye might be drawn to high-tech firms like Tencent, but big state firms, from car makers to utilities, still dominate. China will not decarbonize overnight.
This presents a challenge to the country’s banks, all of which face an uphill battle to go green.
In May, Forest & Finance, a global coalition of NGOs, crunched the data to show that between January 2016 and April 2020, Chinese financial institutions shelled out $15 billion in loans to firms linked to deforestation in southeast Asia, Africa and Brazil.
Much of this was disbursed by mainland banks – Industrial and Commercial Bank of China accounted for $2.2