Recently, Shanghai Rural Commercial Bank (SHRCB) released its 2023 Environmental Information Disclosure Report and TCFD Report, which is the third consecutive proactive disclosed report since July 2021 when the bank represented the Shanghai banking sector in issuing the "Action Plan for Shanghai Banking Industry to Practice Green Finance and Assist Carbon Peaking and Carbon Neutrality". This has shown its responsibilities and obligations in environmental protection, green finance, and climate risk management .
As the first commercial bank in Shanghai to commit to the United Nations Principles for Responsible Banking (PRB), SHRCB has been deepening its green finance management, actively promoting the development of green business innovation, exploring new models for green operations, and striving to become the most green-oriented bank in the Yangtze River Delta region. The report provides a comprehensive overview of the highlights and achievements of the bank's green strategy, green management system, green investment and financing activities, and green operations in 2023.
Strengthen management system construction and lay a solid foundation for green development.Committed to building a sustainable financial service system with green finance, we continuously improve the "2+N" strategic framework for green finance, clarify the strategic goals for green finance, and provide a solid institutional guarantee for high-quality green finance development.
Expand investment scale and support the green transformation.We focus on five core sectors of green agriculture, green energy, energy conservation and environment protection, green manufacturing and green buildings. Besides, we provide comprehensive services around the five directions of green credit, green bonds, green services, green wealth management, and green leasing. By the end of 2023, the outstanding balance of green credit amounted to RMB 61.431 billion, up by 41.00% year-on-year, significantly higher than the overall credit growth rate; our holdings of green bond investments reached RMB 11.549 billion, up by 27.84%, with our holding of green debt financing tools ranking top among the rural financial institutions nationwide; and our outstanding green leasing balance reached RMB 10.147 billion, up by 45.19%, quadrupling the growth rate of the previous year.
Innovate products and services and meet diversified financing needs.We have served as the lead underwriter for the first "carbon neutrality/rural revitalization" green medium-term notes issued in Shanghai, and have successfully launched the first batch of innovative products in Shanghai, including "Jie Shui Hui" business, CCER collateralized lending, and pollution right pledging loans. We have actively promoted the deep integration of green finance and inclusive finance to provide better services for a large number of green agricultural industrial clusters, such as Nanhui Peach and 8424 Watermelon, which are both unique specialties of Shanghai.
Accelerate the digital transformation and increase the quality and efficiency of green services.We embrace the digital transformation proactively and have completed the first phase of the Green Finance Business Management System upgrade, which utilizes big data models to intelligently identify green businesses. We have jointly built a carbon emission trading settlement system with Shanghai Environmental Energy Exchange, providing services such as account opening, contract signing, withdrawing, depositing, querying, and settling accounts related to carbon emission trading. We also continue to improve data governance to further enhance the quality of our fundamental data.
Embark on forward-looking exploration and strengthen ESG risk management capabilities.We continuously enhance environmental and climate-related risk management, identify and assess climate-related risks and opportunities, conduct physical risk analysis for credit bond issuers, calculate the environmental benefits of green project loans, expand the scope of carbon emission measurement for investment, financing and its own operations, and explore climate transition stress tests and ESG risk management evaluation systems, gradually integrate climate risks into the comprehensive risk management system.
Enhance information disclosure and increase transparency and credibility. We highly prioritize information disclosure work. We publicly disclosed the first ESG report, the first TCFD-compliant environmental information disclosure report, and the first PRB report in 2023, actively responding to the concerns of social stakeholders on key ESG issues. In early 2023, we achieved an MSCI ESG rating of A, which is the highest ESG rating for domestic rural financial institutions in 2023.
Actively explore green operation mode and uphold the sustainable development concept.To explore new green operation models through internal processes, we have established and continued to upgrade the "Xin Project" energy management platform to monitor the energy consumption data more scientifically, accurately, and truthfully. We have also launched individual "carbon accounts" for all employees, encouraging everyone to participate in energy-saving activities such as paperless office to reduce paper waste.
Promote low-carbon operations and technological innovation to build green demonstration branches.We strive to reduce energy consumption during branch construction daily operation. Songjiang Sijing Branch has been awarded "Bank Green Demonstration Outlet" in Shanghai, while the Zhangjiang Science and Technology Branch is the first outlet in Shanghai to achieve carbon neutrality for three consecutive years since 2021 with a certificate. Zhangjiang Science and Technology Branch has further expanded the scope of greenhouse gas inventory to include methane and nitrous oxide, thus fulfilling its social responsibility from the perspective of its own operations.
Furthermore, we have been actively contributing to biodiversity conservation by providing green financing to support sustainable development. As one of the 36 Chinese banks that signed the "Common Declaration on Supporting Biodiversity Protection by Financial Institutions", the bank actively implements the "Post-2020 Global Biodiversity Framework" and provides fixed asset special loans for renovating vegetation maintenance and improving park facilities in Langxia Suburban Park. We also participate in the "ZHAI QUAN TONG" green financial bonds for the topic of "Ecosystem Protection and Restoration in the Yangtze River Basin", continuously elevating the strategic height of biodiversity protection, and fully leveraging the supportive role of finance in achieving ecologically friendly, sustainable, green, and inclusive development.
In the future, SHRCB will continue to shape differentiated advantages and distinctive brands, and fulfill a grand "green finance" story. We will contribute to promoting the development of new quality productive forces in society, achieving carbon peaking and carbon neutrality goals, and supporting the construction of a beautiful China.
