Environmental Challenges and Opportunities for Banks in China: The Case of Industrial and Commercial Bank of China

摘要

Banks play critical and active roles in sustainable development mainly because of their intermediary role in the allocation of capital for industrial expansion and development. The experience from Europe and North America has shown that a bank can be subjected to financial and reputation-related risks due to environmental and health damage caused by the operations of clients. Through environmental risk management and other proactive tools, the banking sector can drive improvements in environmental management in industry and drive a move towards investment in cleaner technologies.rnIn China, commercial banks have recently started to acknowledge the risks and opportunities associated with environmentally sustainable development. There are clear indications of increasing pressures on banks to play a more proactive role in environmental issues. The major barriers are internal capacity and awareness in the banking institutions and lack of coordinated signals from regulators. Market drivers and global competition seem to create appropriate incentives for banks to reform.