To implement the CPC Central Committee and the State Council’s major strategic decisions on peak carbon emissions and carbon neutrality, respond to the working arrangements of the People’s Bank of China (“PBOC”) and other national financial regulatory authorities on promoting environmental information disclosure of financial institutions, and fulfill the statutory requirements of the Regulations of Shenzhen Special Economic Zone on Green Finance, under the guidance of CCB Head Office (hereinafter referred to as the “Head Office”), CCB Shenzhen Branch (hereinafter referred to as the “Branch”) has prepared and issued the environmental information disclosure report for two consecutive years.

I. Strictly Complying with Regulatory Requirements

The 2022 Environmental Information Disclosure Report of China Construction Bank Shenzhen Branch (hereinafter referred to as the “Report”) has been prepared based on the PBOC’s Guidelines on Environmental Information Disclosure for Financial Institutions and the Technical Guidelines on Carbon Accounting for Financial Institutions (Trial), and in accordance with the Regulations of Shenzhen Special Economic Zone on Green Finance and the Guidelines of the Shenzhen Municipality for Environmental Information Disclosure by Financial Institutions. Combining domestic and overseas best practices in disclosure of environmental, sustainable development and climate risk information, the Report has comprehensively, truthfully and objectively disclosed the true performance of the Branch’s environmental benefits.

II. Continuously Perfecting Accounting Methods

For green operation, with the Head Office’s guidance, the energy consumption and carbon emission (Scope I and Scope II) data disclosed in the Report have been investigated by third-party organizations, hence more standardized, authentic, consistent and accurate.

With regard to environmental benefits of green credit, accounting has been conducted for project and non-project items, respectively, and all data were collected from documents such as approvals and reports of environmental impact assessment provided by enterprises and other public information disclosure reports to ensure the authenticity and representativeness of the disclosed data.

In terms of environmental benefits of green bonds, innovative accounting methods have been adopted for assessing the environmental benefits of the Branch’s green bonds, and all data were collected from publicly disclosed green assessment certification reports and annual assessment reports of green bonds to further improve the accounting system of environmental benefits of the Branch’s green investment and financing activities.

III. Notable Success in Green Operation

By taking a series of green actions such as water saving and power saving, green commuting and green office, the Branch’s total greenhouse gas emissions (Scope 1 and Scope 2) were 12,500 tons in 2022, achieving a year-on-year decrease of 36.93% in total greenhouse gas emissions (Scope 1 and Scope 2) and maintaining a relatively low level in the industry. Moreover, greenhouse gas emissions per capita (Scope 1 and Scope 2) decreased by 38.36% year on year. Specifically, petrol consumption dropped by 49.26% year on year. Water consumption per capita dropped by 26.92% year on year, indicating a notable success in green operation.

IV. Constantly Improving the Level of Approvals of Environmental Impact Assessment

As green credit grows rapidly, the Branch is exploring and proposing a carbon accounting scheme. As at the end of December 2022, the Branch’s green credit balance was approximately RMB46,049 million, an increase of 40.35% year on year. Specifically, there were 17 disclosed green projects, an increase of 30.77% year on year. The carbon emission reductions totaled 171,900 tons, up 57,800 tons from last year. The total energy saved amounted to 89,200 tons of standard coal, up 41,400 tons over the previous year. Meanwhile, the Branch is exploring and formulating a carbon accounting scheme for investment and financing activities, aiming to achieve full coverage of carbon footprint disclosure for energy-intensive and high-emission industries by 2025 and ensure that loan balances for investment and financing business incorporated in carbon accounting make up more than 5% of corporate loan balances for the same period.

Investment in green bonds has increased, with remarkable performance in environmental benefits. As at the end of November 2022, the Branch has held seven green bonds with a total amount of RMB2,310 million, an increase of 208% year on year. Meanwhile, it has assisted in issuing non-conventional green medium-term notes with a total underwriting volume of RMB1.66 billion. Based on basic principles of data availability and calculation rigorousness, the Branch has computed some green bonds’ environmental benefits in a creative way, which is equivalent to emissions reduction of 3,021,700 tons of carbon dioxide equivalent.

V. High-quality Development of Green Finance

The Branch has developed a mechanism for redirecting investments, and has increased efforts in adjusting credit structure. In 2022, the Branch’s green credit extension exceeded RMB20 billion, served customers of green fields in at least 78 sub-industries with types, covering 53 green industry guidance directories, and provided diversified support to the development of key areas of green industries such as green upgrade of infrastructure, energy conservation and environmental protection industry and clean energy industry. Furthermore, the Branch actively implemented the Head Office’s supporting special differentiated policies for carbon emission reduction support tool and declared carbon emission reduction support tool for low-carbon transformation corporate loans, amounting to RMB10 million.

The Branch has persisted in innovation-driven development, and has accelerated cultivation of new advantages in green finance. In 2022, the Branch speeded up innovation in product and service modes, opened green approval channels, and implemented differentiated pricing. It underwrote the country’s first green bond with the highest level of prefabricated building certification and the country’s first green perpetual medium-term note for rural revitalization (Panda bond). Furthermore, the Branch helped the first batch of “China-Switzerland Stock Connect” Global Depository Receipts (“GDRs”) to be successfully listed on SIX Swiss Exchange, and facilitated leading green enterprises to expand global business with green letters of credit. Moreover, the Branch offered special blue finance to facilitate the development of Shenzhen’s marine industry and help build a global ocean central city.

Sincerity leads to sustainable growth, and whole-hearted services are essential to maintain close relationships with customers. The Branch will firmly take the road of green development, continue to improve green finance supply system, persistently increase green credit extension, and take concrete actions to help Shenzhen achieve sustainable economic development and goals of peak carbon emissions and carbon neutrality.