Green Investment Exceeds RMB208.8 Billion in 2021 First Three Quarters
Ping An Insurance (Group) Company of China, Ltd. (hereafter “Ping An” or the “Group”, has published its 2020 Climate Risk Management Report (hereafter “Report”). The report covers Ping An’s green finance strategy elaborating it through governance, strategies, risk management, benchmarks and targets based on the recommendation framework of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (“TCFD”). This is the second climate risk management report from Ping An since the first one and also the first report issued by a Mainland institution in 2019.
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CDP’s China Office said that Ping An has begun disclosing climate change information to CDP since 2019 and ranked it A- in 2020 ahead of other financial institutions in China that make similar disclosures. Ping An has taken a step further in its disclosure to CDP this year by calculating and disclosing the total carbon emissions of its investment portfolio and the emissions of key industries, paving the way towards setting a more comprehensive carbon neutrality target for the future. The report has also served as an important reference point for investors and other stakeholders in their decision-making process on climate-related risks.
Integrating Climate Governance in the Company’s Strategy
The report highlighted that Ping An has innovated and standardized its climate risk governance model and integrated it into the group’s sustainable development strategy. Ping An established a professional, scientific, and practical ESG governance structure, ensured the fulfillment of board of directors and senior management in supervisory and management roles, clarified division of responsibilities such as goal setting, planning implementation and assessment as well as implemented and established strict adherence to a working mechanism that involves regular reporting, quarterly inspections, semi-annual meetings and annual evaluations. In addition, Ping An Group also requires subsidiaries to upload green finance data onto its AI-ESG platform on a monthly basis summarizing the relevant work at every stage to further strengthening its ESG monitoring internally.
Climate change brings risks in various ways along with uncertainties. Ping An has continuously adjusted its development strategies and resource allocation including the formulation of strategies in areas such as sustainable insurance, responsible investment, green financial development strategies and near-zero development to deal with various risks that are possibly brought on by climate change.
Risk identification and management are core and necessary elements for tackling the risks brought on by climate change. Ping An has established its risk identification matrix leveraging its own business operation features considering the dimensions of physical and transformational risks. This matrix has been deeply integrated into Ping An’s original “251” risk management system and has been further improved and helped refine the company’s risk governance capabilities.
In the report, Ping An also announced the goals and benchmarks for operation and investment under the TCFD framework, which aims to achieve operational carbon neutrality by 2030. This covers all office energy consumption, data center power consumption and travel-related carbon emissions. For investing and financing, Ping An was the first financial institution in China to disclose the carbon emissions of overall assets. Ping An has built an algorithm and prediction model and will soon announce the ultimate net-zero target when relevant factors in the market reach maturity.
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Upgrading the Implementation of Green Finance
In order to achieve the goal of carbon neutrality, Ping An has announced an enhanced operation plan for Green Finance+ in 2021 leveraging the Group’s strengths in green insurance, green credit and green insurance to deepen its green finance layout. As of the end of September in 2021, Ping An’s green investments have exceeded RMB208.89 billion while it has disbursed green credit totaling RMB53.28 billion. Meanwhile, total green insurance premiums recorded RMB25.11 billion in the first three quarters.
As an integrated financial group, investing in green industry development is a key entry point for Ping An to achieve carbon neutrality. Ping An’s green equity investment targets technologically advanced enterprises with new technologies and new business models. With a focus on achieving carbon neutrality and promoting technological innovations, Ping An Capital has come up with four carbon neutral investment areas, namely “clean energy + power grid upgrading + energy storage”, “automation + digitalization + precision agriculture”, “industry + cleaner medical production + new materials” and “new energy vehicles, green construction and medical insurance technology”, which has led to many successful green investment cases such as its investments in Shenzhen Energy, Sanchuan Energy, CATL, Innovent Biologics and WuXi AppTec.
As a pioneer in the field of responsible investment in China, Ping An has partnered with China Economic Information Service to develop the “Xinhua CN-ESG Evaluation System” in December 2020. The system provides integrated applications for ESG risk control, modeling and portfolio management with China-specific and intelligent real-time tools and data support helping companies, institutions and customers tackle risks brought on by climate change.
Ping An said that tackling climate change is the long-term challenge for humanity while enterprises are responsible for winning the battle of low carbon transformation. The Group will continue to deepen the “Finance +Technology” and “Finance + Ecosystem” strategies, promote high-quality development of various businesses and actively implement the concept of sustainable development. The group will also contribute the power of green finance to build a community with a shared future of mankind.
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