China’s Largest Insurer Sets 4 Major Sustainability Goals

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by | Apr 21, 2021

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Ping An Insurance, China’s largest insurer, has announced a set of green finance activities and has set quantitative performance targets for each. Through its financial product and service innovations, Ping An is hoping to support China’s goal of achieving carbon neutrality by 2060, help combat global climate change, and promote sustainable social development.

Setting green finance performance targets

Ping An stated that it will fully support the government’s approach to transform to a green economy by offering financial incentives for green projects, such as preferential credit interest rates and insurance rates, asset allocation tilting and training, mentoring and other value-added services. It will support innovations in clean technology, renewable energy, energy efficiency, energy technology, carbon capture and ecological carbon sinks, carbon trading and other environmental fields.

Ping An set targets for the annual growth rates for its green investments of no less than 20%, green insurance premiums no less than 70% and green credit balance no less than 20%. It will actively promote green investment and climate change risk management, provide insurance premiums, and offer green channels or preferential interest rate policies on loans to green projects and green companies.

Implementation of concrete action paths in four key aspects

To achieve the green finance performance targets, Ping An has set clear action paths in four key areas:

Green loans: Gradually reducing loan financing support for industries and enterprises with high pollution and high energy consumption and overcapacity, strengthening loan audits, and reducing the loan size for emission-control enterprises; increasing financing support for green enterprises and green projects by opening fast-track channels, accelerating the loan disbursement process, or providing special financial offers in the form of loan interest rate subsidies in accordance with the Green Credit Guidelines.

Green insurance: Further enriching insurance products and services, such as new energy vehicle insurance, green building insurance and green credit enhancement insurance, and index insurance for climate and green bulk commodities; introducing corresponding preferential policies to insurance customers of green enterprises or green projects, such as renewable energy projects, energy conservation transformation projects, green building projects, circular economy projects, forestry and other green projects, and engineering insurance.

Green investment: Increasing investment in green assets, including, but not limited to, listed company stocks, bonds, public funds, private equity, debt plans, special asset management, and trust plans, and encouraging development and innovation in green financial products.

Matching asset-liability management with reference to the risks in climate change: Assessing the impact of climate change risks on the asset side while considering the impact of insurance products affected by climate risks on the liability side and ensuring that assets and liabilities match each other in terms of maturity, revenue, and cost, to improve macro planning for future asset allocation.

Ping An will support these activities with its organizational structure, management mechanisms and standards. A Green Finance Committee steered by Ma Mingzhe, Chairman of Ping An, will coordinate the strategy, plans and systems for the Group and its member companies. The committee will oversee a Green Finance Office, and member companies will also set up their own green finance offices. Ping An will establish evaluation standards for green projects and green enterprises in accordance with the guidelines and policies set by the Chinese government and regulatory bodies. With technical support from Ping An’s AI-ESG platform, its artificial intelligence-driven Environmental, Social and Corporate Governance platform, Ping An will set identification standards and investment bases for green companies for investors’ reference.

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