China Bank Chief Finance Officer Patrick Cheng and representatives of four other major Philippine banks discussed their journey and views on sustainability at the Philippine Climate Forum organized by International Finance Corporation (IFC) at the Shangri-La BGC in Taguig on September 14, 2022. The hybrid event gathered over 120 in-person participants and around 50 who joined virtually, representing the country’s key climate stakeholders and IFC’s global climate experts and senior leaders.
The forum aimed to raise awareness of Philippine regulations and policies supporting the financial sector towards green finance pathways, promote green lending and climate investment opportunities in the financial sector and capital markets, and draw lessons from financial institutions on roles and strategies to scale up climate lending and to integrate climate risk management in their business operations and decision-making.
During the panel discussion, the China Bank CFO shared how China Bank aims to achieve its green transformation, noting that the Bank keeps sustainability in mind and as part of its strategy as it works towards achieving its business goals. He highlighted that China Bank positions its sustainability initiatives through three key priorities or channels—through its people, through its financing activities, and through risk management—and that the Bank has been making good progress, including the establishment of a sustainability team, raising US$150 million through its maiden green bonds and arranging award-winning sustainability-themed capital market deals, and developing an environment & social risk management framework to protect its assets from climate change risks.
“Being aware of the impacts of climate change to the Bank, we are currently putting more emphasis in conducting a vulnerability assessment of our asset portfolio to transition and physical risks, and reviewing our risk appetite statement to include climate change risks,” said Cheng.
He also shared how China Bank looks at sustainability and revenue growth as strong interlinked components that go hand-in-hand to sustain corporate performance, protect the environment, and create stakeholder value. “We believe that the Bank’s revenues should not be gained at the expense of poor
governance, which is why we evaluate projects on a long-term basis,” he noted, then explained the key challenges. “For example, while the Bank highly supports the use of renewable energy, we cannot simply terminate its funding to fossil-fueled projects as it generates more than 70% of the country’s energy needs. We believe that proper education, and financing should be available to companies as we wish to transition into a low-carbon economy. In addition, there should be a collaboration between the public and private sectors as it recognizes that the shift to renewable energy should be in phases.”
Cheng concluded: “We have to make this work, because as mentioned by other climate leaders: There is only One Earth. There is no Plan B.”
The Climate Forum is part of IFC’s initiative to help mobilize private sector financing to more climate-friendly projects in four chosen countries: Egypt, Mexico, South Africa, and the Philippines. Dubbed as the ’30 by 30 zero’ program, its goal is to work with financial institutions to strengthen their role as aggregators of climate financing by growing their climate-related lending to 30% of total portfolio with near zero coal exposure by 2030, as well as to draw more issuers with climate-themed bond offerings to the market.