Environmental Considerations and Business Operations of Commercial Banks in China - A case Study of the Project Loan Appraisal Policy of ICBC

Sammanfattning: Commercial banks in China, such as the Industrial and Commercial Bank of China (ICBC) should take environmental considerations into their business operations and policies to 'green' their business, from the perspective of risk management and business marketing. This is not only the social responsibility for them as a corporate citizen which is playing an important role in the business life, but also the expectations from the stakeholders for them to meet the vision and responsibilities of sustainable development. Environmental issues associated with the industry could influence the commercial banks when environmental risks have been converted into economic risks; but the commercial banks can also benefit from the business opportunities created by environmental issues. But ICBC, due to lacking of environmental considerations incorporated into its project loan policy and lacking of support of tools and knowledge, is exposed to environmental risks and is losing the business opportunities generated through environmental issues. In this thesis, the author explores how environmental risks could be converted into economic risks and how they influence the banking business and what the opportunities are for commercial banks to incorporate environmental considerations into their business operations and policy development. The aim is to raise the awareness of the top management of ICBC by illustrating how ICBC is exposed to environmental risks and is losing business opportunities. In conclusion, the author proposes a framework for ICBC's future loan policy.