Kunming based Green Watershed today releases the English summary of its newest report on the Green credit footprints of Chinese Banks, published last month in China.

The organization reporting on banks is the first of its kind in China. The newest report makes an assessment of Chinese Banks and their social and environmental responsibilities. The report is based on tracking and monitoring the implementation of environmental responsible banking by 16 Chinese listed banks over the last five years (2008-2013).

The recently announced reform by the new Chinese leaders, is aiming to achieve the ambitious objective of ecological civilization. To contribute to ecological civilization banks must play their part by investing in a social and environmental responsible way. The report shows that many improvements can be made in this respect.

This requires for the Chinese government to step up its regulation and supervision of the banking sector. However, the government is considering a deregulation of the banking sector. This means that civil society organizations have to play an even bigger part in monitoring and assessing the banks' performance of their social and environmental responsibility, than they already do.

Xiaogang Yu, director of Green Watershed, sees it as major gain for the environment that China has witnessed important progress in green credit in recent years. More and more banks are working on institutional innovations while already existing policies have been improved.

The research findings however show that banks to a different degree work with social and environmental policies. Unfortunately, in the case of most banks implementation is lacking. For some banks it is found that they merely repeat the government's policy and slogans, and that their green credit policy and measures are basically conceptual instead of concrete rules. Some banks highlight the green measures they take, but remain silent on their continuing loans to highly polluting sectors. Most Chinese banks also fail to meet international standards on information disclosure.

More-over, for many banks there is no information available at all on whether they address the green credit directive: so far no assessment has been made of the smaller and medium-sized banks in China, nor of the major policy banks as China Development Bank and China EXIM Bank and foreign banks like Citicorp, which holds several local offices in China.

The Green credit policies originally aimed at diverting bank investments in China away from heavy polluting sectors and projects into a more green direction. Since 2007, when China's State Environmental Protection Agency (SEPA), the People's Bank of China and the China Banking Regulatory Commission (CBRC) jointly issued their China Green Credit Policy, the pressure on the policy level made the Chinese banking sector acknowledge its environmental responsibility. Some banks do better care than others though.

Download the original report in Chinese here.