ING committed to support green finance in China
ING sees great potential in sustainable finance as green bonds in China continue to achieve strong growth.
Being part of the country’s national strategy, the development of China’s green financial system is set to have positive social, ecological and economic significance. In order to explore and discuss the potential opportunities, ING successfully held a Sustainable Finance Conference in collaboration with the International Institute of Green Finance of the Central University of Finance and Economics (CUFE) and Lujiazui Green Finance Development Centre on 27 April in Shanghai. ING shared best practices and the latest developments in sustainable finance and international green bond issuance during the event, and discussed innovative ways to develop sustainable finance.
The Conference brought together senior industry experts to conduct in-depth discussions on the current state and future development of China's green bonds and green financial market. Dr. Wang Yao, deputy decretary-general of the Green Finance Committee of the China Society for Finance and Banking was one of the experts and delivered the keynote speech. Dr. Wang said: “The development of green finance tools and systems are essential for China’s economic and social progress, especially in the context of supply-side reforms. It will also spur the acceleration of market liberalisation efforts and further China’s rising involvement in global environment and finance governance.”
As a global pioneer and leader in sustainable finance, ING Bank understands the significance of green bonds and loans for the construction of China's civil society, maintenance and appreciation in value of ecological and environmental assets, and in view of the ongoing economic transformation. Recent ING research showed that the total global green bond issuance in 2017 reached a record high at US$ 121bn. It is expected that the strong growth momentum will continue in 2018, and the total issuance is expected to exceed US$ 250bn. (Source: Climate Bond Initiative forecast.)
In the last two years, ING Bank has led five green bond issuances for Asian financial institutions and corporates, including the € 1bn green bond issued by the China Development Bank in 2017, the US$ 3bn multi-currency green bond issued by the Bank of China in 2016, and the US$ 40m equivalent green bond issued by Sindicatum Renewable Energy Company Pte. Ltd. in 2018.
In recent months, ING Bank has also completed two innovative sustainability loans in the Asian market: It collaborated with Wilmar International Limited to convert a portion of its existing bilateral, committed Revolving Credit Facility of US$ 150m with the bank into a sustainability performance-linked loan; and it acted as the Sustainability Coordinator for Olam International Limited’s US$ 500m sustainability-linked club loan. The concept for such sustainability loans heralds a new approach to provide incentives for corporates who are keen to improve their environmental, social and governance (ESG) performance. Their ESG performance will be assessed annually by an independent rating agency and if the pre-set performance milestones are met, the loan margin will be reduced subsequently.
For 2018 and the next few years, ING Bank is confident that green finance will continue its strong growth momentum in China, which is driven by a number of favourable factors, such as the introduction of China’s green bond assessment and verification guidelines as well as the rapid “green” infrastructure development along the Belt and Road. We also see the opportunity to go beyond “green finance” and for social development targets to be taken into consideration for a more comprehensive view on sustainable growth in China.
Isabel Fernandez, global head of ING Wholesale Banking said: “With China’s greater push for sustainability, we see more opportunities not just for the issuance of more green bonds, but also the development of green loans and social bonds. We believe our expertise will be valuable to corporates and financial institutions in China. Together, we can work towards a more sustainable and low-carbon society.”
Gerrit Stoelinga, CEO of ING Wholesale Banking in Asia Pacific added: “China’s progress in green bonds issuance is gaining global attention. For example, the issuance of the Guidance on Promoting Green Belt and Road has offered corporates new opportunities. Leveraging on our experience in Europe, ING Bank is committed to assist them on their journey to become more sustainable.”