Research On The Development Strategy Of Industrial Bank’s Green Credit Under The Equator Principle

With the four decades of China’s reform,economic growth has been incredibly increased and people’s life has been significantly improved.By 2017,China’s GDP had reached 82.7 trillion yuan,becoming the second largest economy in the world,with per capita GDP reaching 59,660 yuan.However,the negative impacts on the environment induced by economic development should not be neglected.President Xi has proposed that we should continue reforming the institution of China’s eco-civilization and make China more suitable for living.Therefore,how to improve the pattern of current economic development and how to coordinate economic growth and environmental protection to ultimately achieve sustainable development should be paid more and more attention.In resent years,green finance institution and mechanisms,especially green credits,have been established by China’s government as an effective way to promote green economy in China.Meanwhile,financial institutes are also improving their internal management system in order to support green finance.For example,Industrial Bank announced to adopt Equator Principle(EP)to improve its environmental risk management on October 30,2008.EP has actually been adopted by many international financial institutes to support green finance and promote low-carbon development.Following Industrial Bank,Jiangsu Bank announced to adopt EP in 2017 as well.Huzhou Bank has also been applying to be the third bank adopting EP in China.However,compared to international financial institutes,few commercial banks except for those three banks in China have the knowledge of main contents,principal functions,operational framework of EP as well as its impacts on long-term business.Thus,it’s quite important to conduct deep research on EP and its effects on green finance.This paper firstly introduced basic concept and characteristics of EP,and analyzed how EP has positively affected bank’s environmental and social risk management and strongly supported banks to implement their social responsibilities.Taking Industrial Bank as an example,the paper analyzed why Industrial Bank adopted EP based on the theories of risk management and social responsibility.According to the analysis of the situation and existing problems of Industrial Bank since the implementation of the Equator Principle,the paper puts forward the green credit development strategy design and safeguard measures of Industrial Bank with the deepening implementation of the Equator Principle as the core.