Caixin
Oct 18, 2021 08:56 PM
FINANCE

Charts of the Day: Chinese Banks’ Enthusiasm Grows for Climate-Risk Disclosure

State-owned commercial lender Bank of Communications Co. Ltd. recently became the sixth and latest Chinese bank to support the Task Force on Climate-Related Financial Disclosures (TCFD), a global initiative to develop recommendations for businesses to disclose risks and opportunities related to climate change.

The move exemplifies growing popularity of the task force among Chinese companies, which are paying more and more attention to sustainable development.

The TCFD was established in 2015 by the Financial Stability Board (FSB), an international body that monitors and makes recommendations about the global financial system. In June 2017, the task force released final recommendations for businesses, paving the way for companies around the world to participate in the initiative and disclose climate-related information. Multiple jurisdictions across the world, including Japan and Singapore, have announced requirements for domestic organizations to report in alignment with the TCFD recommendations, according to the task force’s latest status report.

As of October, the TCFD has more than 2,600 supporters, including companies, governments and central banks, from 89 countries and jurisdictions. The supporters are encouraged, but not required, to implement its recommendations for financial disclosures.

A total of 26 Chinese companies currently support the task force, of which nearly two-thirds are in the finance sector, and six are banks.

In 2017, Industrial and Commercial Bank of China Ltd. became the first Chinese financial institution to support the task force. The only other Chinese company to come on board that year was Jinko Solar Co. Ltd., one of the world’s top solar panel manufacturers. A total of eight Chinese companies became its supporters between 2018 and 2020.

Momentum picked up this year, as 16 Chinese businesses, including five banks, have become new supporters. The five are Bank of China Ltd., China Construction Bank Corp., Postal Savings Bank of China Co. Ltd., Huaxia Bank Co. Ltd. and Bank of Communications.

Besides supporting the TCFD recommendations, the six Chinese banks also issue green loans and bonds as part of efforts to promote sustainable development.

Contact reporter Zhang Yukun (yukunzhang@caixin.com) and editor Joshua Dummer (joshuadummer@caixin.com)

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