ESG Investing Frontiers Forum | Facilitating the Environmental Information Disclosure of FI

On August 31st, 2021, the 12th ESG Investing Frontiers, "Facilitating the Environmental Information Disclosure of Financial Institutions," was held in

Beijing. The forum was chaired by Peiyuan Guo, Chairman of China SIF. Ping Yang, Director of the Research Bureau of the People's Bank of China,

Zhikai Lin, Director of Local Financial Regulatory Bureau of Shenzhen Municipality, Quan Chen, Deputy Director of Green Finance Department of

Industrial Bank, and other guests delivered keynote speeches on the policy, practice and application of environmental information disclosure of

financial institutions. Experts from government departments, international organizations and financial institutions had closed-door discussions

on the establishment and implementation of environmental information disclosure systems of financial institutions.

Jiantuo Yu, Deputy Secretary General of China Development Research Foundation, delivered a soeech on behalf of the organizers. Mr. Yu said that environmental information disclosure (EID) is the premise of effective environmental governance. EID of financial institutions should consider comprehensiveness, accuracy and timeliness. EID should not only run through the whole process from decision-making to impact elimination and correction, but also cover all elements of capital, human resources, technology, organization and system. Mr. Yu believes that EID itself has costs. Environmental responsibility is not only related to enterprises and governments, but it also needs the participation of the wide society, as well as methods and tools to reduce the cost of information disclosure. In addition, EDI needs to strengthen international cooperation, and learn from the effective international experience on the basis of China's unique national conditions.

The keynote speech is divided into two parts. The first part focuses on the policies, guidelines and standards of information disclosure. Ping Yang, Director of the Research Bureau of the People's Bank of China, said that the Guidelines on Environmental Information Disclosure for Financial Institutions issued this July was based on the pilot framework of environmental information disclosure of Chinese and British financial institutions and innovation pilot zone. With the 3060 carbon neutrality goal, the People's Bank of China has made further analysis on the guide. In the future, it hopes to increase the disclosure requirements of climate information and improve the environmental information disclosure system of China's financial institutions.

Zhikai Lin, Director of Local Financial Regulatory Bureau of Shenzhen Municipality, introduced Green Finance Regulation of Shenzhen Special Economic Zone. The regulation specifies the disclosure subject, disclosure obligations and format requirements, hoping to promote a virtuous circle of green financial ecology. Mr. Lin introduced that the key work in the next stage is to formulate supporting guidelines for the Green Finance Regulation of Shenzhen Special Economic Zone and cooperate with various departments to jointly improve the environmental information disclosure system.

Puleng Tumelov, head of Principles of Responsible Banking (PRB) of the United Nations Environment Development Programme (UNEP FI), introduced PRB's information disclosure requirements of signatory banks. She pointed out that impact analysis, objective implementation, transparency and accountability are the three key steps for PRB signatory banks to implement the principle of responsible banking. The sixth principle of PRB, "transparency and accountability," is very important. It requires signatory banks to publicly disclose their significant positive and negative impact on society every year and be responsible for the impact.

Jonathan Labrey, Policy Director of the Value Reporting Foundation (VRF), introduced the information disclosure framework of VRF. He said that enterprise value is jointly determined by financial performance and ESG factors. As an integral part of VRF, the Sustainability Accounting Standards Board (SASB) provides a comparable disclosure framework for 77 industries. VRF hopes to provide a comprehensive information disclosure framework through the integration of disclosure standards. By doing so, it can also help enterprises to disclose their sustainable value more comprehensively and investors to allocate capital more effectively.

The second part of the keynote speech focuses on the practice and application of information disclosure. Quan Chen, Deputy Director of Green Finance Department of Industrial Bank, shared the 12-year-long exploration experience and practice of EID of Industrial Bank. Since 2009, the Industrial Bank has led the Green Investment Principle (GIP) working group of Belt and Road Initiative, and worked on the climate information disclosure pilot of the financial institutions in the UK and China. Currently,concerning the relevant policies of the People's Bank of China, China Banking and Insurance Regulatory Commission and the TCFD, Industrial Bank aims to explore the practice of EID with the characteristics of Chinese financial institutions.

Zhi Zhang, Partner of Syntao, shared the research results on the 2020 EID of the financial industry in Shenzhen. The research indicated that the EID of financial institutions were poorly motivated, and it still has insufficient data. Mr. Zhang suggested solving that status quo through regulatory means and incentive policies, such as providing support for financial institutions to carry out disclosure tasks. In the end, Mr. Zhang Zhi introduced the research plan for 2021, which will be expanded to the Greater Bay Area.

Rahul Ghosh, Managing Director of Moody's ESG Solutions, introduced Moody's application of environmental information and data of financial institutions. He believes that environmental information disclosure data is the basis for ESG assessment. For example, Moody's ESG Solutions evaluates the biodiversity risk faced by banks through naturally related financial information disclosure. Rahul believes that the future EID of the financial industry is collaborative, integrated and innovative. Under an increasingly unified disclosure framework, more accurate environmental information disclosure can be achieved through technological innovation.

"ESG Investing Frontiers" is jointly initiated by China Development Research Foundation (CDRF), China SIF, CASVI and The National School of Development at Peking

University (NSD). Under the guidance of Local Financial Regulatory Bureau of Shenzhen Municipality as the guiding unit under, the forum looks at the global ESG investment

trends and ideas. Based on domestic ESG investment practice and exploration, and the forum aims to promote the development of ESG investment in China through monthly

themed speeches, roundtable discussions, and industrial exchanges.