ICBC Renewable Energy Investments
Does the practice live up to the promise?
Real climate leadership means transitioning financial flows towards a new, just, clean energy economy.
The final Climate Conference text from COP27 indicates that about 4 trillion USD per year must be invested in renewable energy up until 2030 to be able to reach net zero emissions by 2050.
But achieving this will require a transformation of the financial system, its structures and processes, and the way banks, institutional investors, and other financial actors operate.
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As the world’s biggest bank and global coal financier, ICBC is facing huge financial, reputational, and environmental risks.
The biggest carbon-emitting countries have a crucial role to play in this transition. Because countries have indicated ambitious transition targets, their financial institutions are integral to enabling conditions that would jumpstart and facilitate ongoing low-carbon development.
Our latest research finds that financial institutions provided 3.46 trillion USD in loans and underwriting services to selected energy companies from January 2016 to July 2022. 92% of this (3.2 trillion USD) was provided to companies engaged in fossil fuels, and only 8% (47 billion USD) was provided to companies engaged in renewable energy.
For most international financial institutions, only 2-5% of their financing was attributable to renewable energy. For the Chinese banks, the Bank of China and the Industrial and Commercial Bank of China (ICBC), the proportions of renewable energy financing were 10% and 24%, respectively. However, these amounts are not enough for the energy transition we need.
ICBC specifically provided 70 billion USD in loans and underwriting services to the selected companies from January 2016 to July 2022. Three-quarters of this were attributable to fossil fuels (53 billion USD) and one-quarter to renewable energy (17 billion USD). In the last three to four years, ICBC seems to have increased its fossil fuel-attributable credit to the selected companies, while credit to renewable energy appears to have been relatively stable, potentially even declining.
China has raised their 2030 and 2060 climate goals and financial institutions play a decisive role in whether China can achieve these goals. ICBC’s current investment in renewable energy shows that in spite of their fossil fuel investments, they are in a position to push China to deliver on their pledges if there is sufficient clamor for them to lead China’s pursuit of green and low-carbon energy.
We believe that ICBC can lead the financial sector on taking real climate action by raising the share of renewable energy in their investment and financing portfolios by setting up a more ambitious target for renewable energy investment and developing a transition roadmap away from fossil fuels to achieve net-zero emissions.
At COP27, China’s climate envoy Xie Zhenhua emphasized that China helps developing countries improve their ability to cope with climate change by helping them to develop renewable energy. We believe that ICBC can play a critical role in promoting China’s overseas renewable energy investment, especially in Southeast Asian and African countries.
ICBC has the ability to lead its international peers in high rates of renewable energy financing by accelerating its decarbonization portfolio, further increasing its financing of renewable energy, and immediately reducing its financing of fossil fuels.
Write a letter to ICBC shareholders to tell them that
they need to push ICBC to become a real climate leader.
The Go Clean ICBC coalition is calling on ICBC to:
all forms of direct and indirect fossil fuel finance to existing and planned projects, and to companies that pursue respective projects.
in a more open dialogue with local and global stakeholders, as well as local communities;
by its current sustainability commitments and holding a more transparent process regarding their reporting;
to zero-emissions of ICBC’s operations and financial portfolio;