On July 3rd, Caixin reported that China Merchants Bank recently released its "2023 Environmental Information Disclosure Report". At the same time, the head of China Merchants Bank's Corporate Finance Headquarters, Hou Weirong, accepted an exclusive interview with Caixin Media and introduced the latest developments in the bank's green finance.

As of the end of 2023, China Merchants Bank's green financing balance was 447.7 billion yuan, and when taking into account green trade financing and green retail consumer financing, the total amount was 613.3 billion yuan.

Hou Weirong stated that although China Merchants Bank's green finance scale is at the forefront of joint-stock banks, there is still a large gap compared with the large state-owned banks. At the same time, China Merchants Bank has formed a multi-level, all-round, and broad-field green finance supporting policy tools in credit scale, pricing, cost subsidies, and assessment incentives to meet the green financing needs under the "dual carbon" goal.

According to the "2023 Environmental Information Disclosure Report" released by China Merchants Bank, the bank's current green product service system revolves around five major scenarios and seven major key industries, launching the "Five Horizontals and Seven Verticals" green financial product matrix.

In response to why China Merchants Bank did not set up a separate green finance department, Hou Weirong believes that the current design and arrangement of China Merchants Bank's green finance business structure is appropriate. The Green Finance Business Committee includes 23 departments and subsidiaries of the head office, involving a wide range of institutions and business scope, making it difficult to establish a dedicated green finance department to be responsible for the whole.

Retail and corporate linkage, deep green industry becomes the main force of corporate loans

Data shows that in the first half of the year, the growth rate of China Merchants Bank's green loans was higher than that of the overall corporate loans, focusing on three "deep green" industries: clean energy, rail transit, and new energy vehicles, accounting for more than 50%.

According to reports, China Merchants Bank's retail and corporate sectors are interactive, and one of them is the green finance business.

China Merchants Bank related personnel introduced that its credit card center continues to improve its new energy vehicle consumer service capabilities, continuously strengthens the credit card loan business for new energy vehicles, cooperates with online car loan platforms of car manufacturers, and explores joint loans, loan assistance, and other models with host factories and automotive finance companies to conduct special marketing activities. Including consumer loans for new energy vehicle owners and installment loans for new energy vehicles.

Public information shows that this year, China Merchants Bank's Wuhan branch will combine bank accounts with Wuhan Municipal Government's carbon accounts, and release a "Green Card" personal debit card. Individual customers who use the card to take subway or bus can obtain carbon-incentive emission reductions and points, and corresponding carbon-incentive emission reductions will be obtained.

In addition, Hou Weirong introduced that for early-stage green enterprise customers, such as technology companies, 17% of the green customer group are technology companies, which have great growth potential. They first adopt retail and settlement business, and then gradually move on to financing services. Based on enterprise size, credit, tax data, etc., different amounts of preferential interest rate credit will be granted.

The current green finance governance framework is "appropriate"

China Merchants Bank's "2023 Environmental Information Disclosure Report" shows that the specific working institutions of the Green Finance Committee are set up in the Corporate Finance Headquarters, and are responsible for the office functions of the Green Finance Business Development Committee by the newly established Green Finance Team last year, and oversee major matters, including product innovation and overall development planning.

Hou Weirong stated that all business departments participate in the discussion of green finance development planning, and after summarizing them, they are submitted to the committee for decision-making. Currently, China Merchants Bank's current architecture is appropriate for promoting the development of green finance.

In terms of specific assessments, China Merchants Bank mainly formulates them based on each department's own work responsibilities. For example, for green financing, the headquarters of the public fund is responsible for the on-balance-sheet financing goals. It is composed of many products, including flow loans, M&A loans, and trade financing, which are then broken down into relevant product departments; for example, the underwriting of green bonds or debt financing tools is the responsibility of the investment bank department. By listing the underwriting of green debt financing tools separately, it is convenient for promotion and assessment.

Hou Weirong frankly stated that he hopes to allocate products to more customers in need, including customer group growth, financing balance growth, etc., which will be decomposed into customer and product departments. Through similar methods, it is possible to integrate resources of the entire bank to the maximum extent to promote the development of green finance business.

Continuously cultivate customer green finance concepts

Since 2020, China Merchants Bank has released three consecutive environmental information disclosure reports and is one of the earliest banks in China to do so.

It is worth noting that, in response to the public's concern about the greenwashing of ESG reports, CM Bank has hired an independent third-party verification organization for the first time to carry out verification work, which can enhance the credibility of environmental information disclosure reports through unified and fair evaluation standards and verification procedures.

In addition, the 2023 report also disclosed CM Bank's performance in various aspects, including its efficiency in addressing climate change, developing green finance, and promoting green operations. It also responded to the focus of regulatory agencies, rating agencies, and institutional investors, in order to improve the comprehensiveness and pertinence of the report's disclosure.

Hou Weirong told reporters that the CM Bank held a customer promotion meeting in Shanghai last month, innovatively launched a comprehensive management service plan for enterprise ESG, and expressed its firm support for enterprises to improve their ESG management from both industrial and financial perspectives.

On the other hand, as the country gradually requires central SOEs and listed companies to strengthen the disclosure of ESG information, CM Bank can provide assistance to help client enterprises improve their ESG management and disclosure.

Hou Weirong said that CM Bank hopes to influence and guide consumers and business owners' willingness towards climate change and green development through products and services. After customers' understanding of the concept of green development is improved, they will in turn pay more attention to the environmental performance of their own enterprises. By obtaining CM Bank's green deposits with interest rates lower than ordinary deposits, the overall situation enters a positive cycle.