GLOBAL: A report released by the ‘Go Clean ICBC’ coalition today — February 2nd, 2023 — shows that the Industrial and Commercial Bank of China (ICBC) – which purports to be “China’s greenest bank” – is not meeting its stated commitments to clean energy financing. The report compares ICBC’s renewable energy investments to its investments in fossil fuels between January 2016 and July 2022, and finds that despite its posturing as China’s clean bank, it has increased investment into fossil fuels while renewable energy financing stagnated or even declined.
According to the report, financing for renewable energy globally has increased only slightly since the 2015 Paris Agreement. The financial institutions studied — which constitute the world’s top 15 banks — have provided 3.46 trillion USD in loans and underwriting services to selected energy companies in the last three to four years, but only 8% of this went towards renewables. A report released last week by the Sunrise Project, BankTrack and others, which had a broader scope examining 20 institutions, presented similar findings.
While ICBC currently does provide the highest proportion of financing to renewable energy among peer financial institutions, it remains the world’s largest financier of coal. Three quarters of its financing over the last four years has gone to fossil fuels (53 billion USD), while only one quarter has been directed to renewables (17 billion USD).
Commissioned by the Go Clean ICBC Coalition, the report is released against the backdrop of China’s previous commitments to increase its support for countries to expand their renewable energy capacity. China has recently raised its 2030 and 2060 climate goals, which in order to be met, necessitate the financial sector play a leading role in advancing the energy transition.
It also comes alongside breaking news that both ICBC and the Commercial Bank of China (CBC) will provide early confirmation of loans to Pakistan’s Gwadar Coal Power Project, a move which indicates a lack of seriousness on ICBC’s behalf to act on Chinese President Xi Jinping’s 2021 ‘no coal overseas’ pledge at the United Nations General Assembly.
Azhar Lashari of the Policy Research Institute for Equitable Development said:
“The Chinese government’s decision to support the Gwadar coal power plant not only goes against the Chinese president’s commitment to stop support for overseas coal power projects, and Pakistan’s coal moratorium announced in 2020, but also goes against the principles of economic justice.”
ICBC’s involvement with the Gwadar power plant in Pakistan could set a bad example for other Chinese banks to follow suit, further damaging the legitimacy of China’s stated renewables ambitions. As China’s largest bank, and the world’s largest multinational bank, ICBC prides itself on being a leader in renewable energy investment. However, ICBC cannot hold up this mantle if its fossil fuel investments continue to increase while its renewable energy investments plateau.
Chuck Baclagon, 350.org Regional Finance Campaigner said:
“Big per capita emitting countries have a crucial role to play, more so are those countries that have indicated ambitious decarbonization targets like China, their financial institutions are integral towards leading the transition and enabling conditions that would be conducive for low-carbon development.”
China can and should play a crucial role in the global transition away from fossil fuels and towards low carbon development. The Go Clean ICBC Coalition is calling on the bank to set and follow through on more ambitious targets for overseas renewable energy investment, along with a clear transition roadmap away from fossil fuels to achieve net-zero in its portfolio. This must start with an immediate end to financing new fossil fuel projects, especially coal projects like the Gwadar coal power plant.
Go Clean ICBC is a global coalition of organizations and communities from countries hosting ICBC-funded coal projects. We are calling on ICBC to shift all energy finance from dirty coal to clean and renewable energy.
To read the report, click here:
- Pascale Hunt, [email protected]