To implement the New Development Philosophy, align itself with the carbon peaking and carbon neutrality goals and boost the new finance practice, CCB has successfully developed an automated ESG rating tool applicable to all corporate customers, the first of its kind both at home and abroad, and recently made all features of the system available for use and promoted it across the bank.

The ESG rating tool for corporate customers assesses a customer’s sustainable development capacity under the carbon peaking and carbon neutrality goals in three aspects, namely the environmental (E), social (S) and corporate governance (G). It’s a key tool to identify customers’ levels of green and low-carbon operation and sustainable development, a major means used to meet all requirements about green finance, to adapt to the green and low-carbon trend and to achieve high-quality business development, and a crucial pillar supporting the realization of the carbon peaking and carbon neutrality goals and the transformation towards a sustainable society. As the first bank that has developed the automated ESG rating tool applicable to all corporate customers, CCB has pioneered the ESG rating practice in the world and spearheaded innovative practice in the industry. CCB’s ESG rating is marked by the following aspects:

First, the tool applies to a far wider scope of customers than industrial peers across the world. It’s applicable to all corporate customers, with about 700,000 customers eligible for its rating conditions so far. As the requirements and standards for ESG related customer data disclosure improve and the quality of ESG related customer data increases, the base of eligible customers will see further expansion.

Second, the tool features further segmentation as it gives differentiated assessment of customers of varying sizes. Based on 74 models divided by industry and size, it assesses big and medium-sized enterprises and micro and small-sized enterprises separately, practice unseen by industrial peers. That has changed the current situation in which ESG ratings are mostly targeted at big and medium-sized customers like listed companies and bond issuers, and greatly improved the segmentation of ESG ratings.

Third, the rating indicators are diverse, localized and aligned with international standards and Chinese characteristics. CCB has fully leveraged the expertise of external institutions and internal departments and branches, built practice on China’s realities and the carbon peaking and carbon neutrality trend, and taken into account China’s ESG related data, to build a rating indicator system that combines international standards with Chinese characteristics.

Fourth, the ESG rating results are automatically generated to empower the move to reduce burden on employees. Utilizing fintech technologies, the system taps deeper into ESG related information both inside and outside the bank, introduces external data, and generates customer ESG rating results automatically.

Scientifically assessing customers’ sustainable development capacity, CCB’s ESG rating tool for corporate customers offers a new perspective and means for the bank in the course of operation and helps the bank with customer selection and risk control in a forward-looking manner. Going forward, CCB will explore the application of ESG elements to credit rating, and push further for the integration of the ESG philosophy into business operation and risk management, so as to drive a virtuous cycle and sustainable development of the credit and investment business.