| Red Line | Text of policies | Comments | Score (Well Protected, Partly Protected, Not Protected) |
|---|---|---|---|
| Regulatory requirements | |||
| Ensure Legality | 10. Banks shall develop and improve policies, systems and procedures for E&S risk management, (...) in accordance with national environmental laws and regulations, sector guidelines and sector-specific entry policies. 16. Banks shall (...) ensure that documents and permits submitted by clients are compliant (...). 17. Credit to clients with non-compliant environmental or social performances shall not be approved. 21. Banks shall strengthen E&S risk management for proposed overseas projects, ensure project sponsors are compliant with local environmental, land, health and safety laws and regulations in the project country or region. Banks shall publicly commit to adopt relevant international best practices or standards for the proposed overseas project, ensure the proposed project is consistent with international best practices in essence. | The Green Credit Guidelines require that Chinese banks are in compliance with Chinese national law for domestic loans. For overseas investments, the GCG requires that banks comply with host country law and international norms and best practices, but it does not clearly define which. | partly |
| No Corruption and Tax Evasion | Corruption and tax evasion is not discussed in the GCG. | not | |
| Ensure ESIA for mills and plantations | 10. Banks shall develop and improve policies, systems and procedures for E&S risk management, (...) in accordance with national environmental laws and regulations, sector guidelines and sector-specific entry policies. 16. Banks shall (...) ensure that documents and permits submitted by clients are compliant (...). 17. Credit to clients with non-compliant environmental or social performances shall not be approved. 21. Banks shall strengthen E&S risk management for proposed overseas projects, ensure project sponsors are compliant with local environmental, land, health and safety laws and regulations in the project country or region. Banks shall publicly commit to adopt relevant international best practices or standards for the proposed overseas project, ensure the proposed project is consistent with international best practices in essence. | The GCG requires that banks monitor and identify environmental and social risks of clients. However, the GCG does not contain specific language on environmental and social impact assessments, as EIAs are covered in the Environmental Impact Assessment Law of China. | partly |
| Social requirements | |||
| Ensure FPIC | The GCG does not contain specific reference to ensuring FPIC. | not | |
| Respect Human Rights | The GCG does not contain specific reference to ensuring human rights. | not | |
| Respect Indigenous rights and customary land use rights | The GCG does not contain specific reference to ensuring indigenous rights. | not | |
| No forced resettlement | Although the GCG defines resettlement as a major social risk, it does not contain specific language regulating or restricting the forced resettlement of peoples. | not | |
| Environmental Requirements | |||
| No forest degradation and deforestation | The GCG does not contain specific reference to ensuring no forest degradation and deforestation. | not | |
| Protect endangered species | The GCG does not contain specific reference to protecting endangered species. | not | |
| No high-risk species | The GCG does not contain specific reference to protecting high risk species. | not | |
| No fire | The GCG does not contain specific reference restricting the use of fire in clearing forest land. | not | |
| Protect peat | The GCG does not contain specific reference to protecting peat. | not | |
| No persistent pollution | 19. Banks shall strengthen loan disbursement management. Clients’ management of E&S risk shall become an important basis for banks to make decision on loan disbursement. Throughout the project cycle, including project design, preparation, construction, completion, operations and closure, E&S risk assessment shall be checked systematically. In case of major potential risks, banks may hold or even terminate disbursement of funds. 20. Banks shall strengthen portfolio management. Banks shall develop and implement specific portfolio management measures for clients with major potential E&S risks. Banks should closely follow national policies’ impact on clients’ operational performances, maintain active monitoring and analysis, and make timely adjustment to risk categorization of assets, loan provisioning and loss write-off. Banks shall develop and improve an internal reporting and accountability system for major client E&S risks. In case of major E&S issues, banks should take measures in a timely manner and report to regulators on potential risks that banks are exposed to. | The GCG establishes that banks are responsible for controlling and mitigation pollution from their clients’ activities (Article 19 and 20), but there are no clear criteria. | partly |
| Corporate association / scope of the policy | |||
| Corporate association / scope of the policy | The GCG does not necessarily pertain to third parties or parent, sister, or subsidiary companies. | not |
