The Environmental Responsibility of the World’s Largest Banks

Abstract

Sustainability transition is changing the role and function of banks, specially their products and services also in relation to stakeholders. Banks are one of the main actors supporting the transition to sustainable economy. The purpose of this study is to emphasise the role of world’s largest banks in that process. Banks are slowly responding to the new demand of sustainability and responsibility, and they try to align with it. The paper is based on an overview of the world’s five largest banks that employ corporate social responsibility (CSR) reporting standards, together with detailed enumeration of pro-environmental activities included in the reports. The first section of this paper presents the most popular approaches to the problem at hand, as reported in professional literature. Section two presents the characteristics of the CSR actions in banks. The third section discusses the environmental actions of the biggest banks in Global Reporting Initiative (GRI) reporting the most popular standard for reporting non-financial information. And the last part of the paper presents the conclusions resulting from the article. The research was conducted using a variety of sources, such as scientific articles, statistical data, CSR reports of the world’s largest banks, as well reporting principles and standard disclosures. The basic method used in the process of writing was a critical analysis of literature and reports concerning the CSR reporting standards, environmental responsibilities of different kinds of entities, as well as own observations based on special reports of banks. In the article, also the analysis of financial market data, induction method and comparison method have been used. The main conclusions of the analysis of the CSR reports disclosed by the world’s largest banks confirm all three of the theses presented in the article. The findings suggest that the banks under study can be regarded as environmentally responsible entities. Their reports and disclosures are produced according to the internationally recognized standards. There are also critical opinions about the standards for reporting environmental information, but the weaknesses of reporting these aspects do not undermine the benefits of using the GRI guidelines.

Full text

Economics and Business
ISSN 2256-0394 (online)
ISSN 2256-0386 (print)
2018, 32, 51–64
doi: 10.2478/eb-2018-0004
https://www.degruyter.com/view/j/eb
51
©2018 Božena Ryszawska, Justyna Zabawa. This is an open access article
licensed under the Creative Commons Attribution License
(http://creativecommons.org/ licenses/by/4.0), in the manner agreed with
De Gruyter Open.
THE ENVIRONMENTAL RESPONSIBILITY OF THE
WORLD’S LARGEST BANKS
Bożena RYSZAWSKA1, Justyna ZABAWA2
1, 2Wrocław University of Economics, Wrocław, Poland
Corresponding author e-mail: justyna.zabawa@ue.wroc.pl
Abstract. Sustainability transition is changing the role and function of banks,
specially their products and services also in relation to stakeholders. Banks are
one of the main actors supporting the transition to sustainable economy. The
purpose of this study is to emphasise the role of world’s largest banks in that
process. Banks are slowly responding to the new demand of sustainability and
responsibility, and they try to align with it. The paper is based on an overview of
the world’s five largest banks that employ corporate social responsibility (CSR)
reporting standards, together with detailed enumeration of pro-environmental
activities included in the reports. The first section of this paper presents the most
popular approaches to the problem at hand, as reported in professional literature.
Section two presents the characteristics of the CSR actions in banks. The third
section discusses the environmental actions of the biggest banks in Global
Reporting Initiative (GRI) reporting the most popular standard for reporting non-
financial information. And the last part of the paper presents the conclusions
resulting from the article. The research was conducted using a variety of sources,
such as scientific articles, statistical data, CSR reports of the world’s largest
banks, as well reporting principles and standard disclosures. The basic method
used in the process of writing was a critical analysis of literature and reports
concerning the CSR reporting standards, environmental responsibilities of
different kinds of entities, as well as own observations based on special reports
of banks. In the article, also the analysis of financial market data, induction
method and comparison method have been used. The main conclusions of the
analysis of the CSR reports disclosed by the world’s largest banks confirm all
three of the theses presented in the article. The findings suggest that the banks
under study can be regarded as environmentally responsible entities. Their
reports and disclosures are produced according to the internationally recognized
standards. There are also critical opinions about the standards for reporting
environmental information, but the weaknesses of reporting these aspects do not
undermine the benefits of using the GRI guidelines.
Keywords: Bank, corporate social responsibility (CSR), environmental
responsibility, Global Reporting Initiative (GRI), sustainable development (SD).
JEL Classification: Q56, Q50, Q01, G21.
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INTRODUCTION
Sustainability transition is changing the role and function of banks, specially
their products and services also in relation to stakeholders. Banks are one of the
main actors supporting the transition to sustainable economy. The concept of
sustainable development (SD) has become an important objective of policy makers
on the government and business levels. It is due to an increased awareness and
acceptance of sustainable practices by corporations and shift towards expanding
corporate goals from growth and profitability to sustainability. The new trends in
economy are already a fact. We can see sustainable banking, eco-taxes, green
investment funds, green public procurement, eco-innovations in industry, low
carbon economy, alternative sources of energy, etc. Banks will no longer be neutral
intermediary organizations between companies and consumers. They are seen as
active actors in the economic and social processes. Banks present their social and
environmental responsibility by annual corporate social responsibility (CSR)
reporting.
The most popular is Global Reporting Initiative (GRI). The GRI guidelines are
presently the most popular standard for reporting non-financial information,
designed by GRI, an international non-profit organisation. The GRI G4 constructs
references and supports the international standards of CSR and sustained
development reporting, such as the “OECD Guidelines for Multinational
Enterprises”, “the Ten UN Global Compact Principles”, and the “UN Guiding
Principles on Business and Human Rights”. The GRI guidelines have evolved over
the years, from GRI G1 up to the present G4 form. Work is under way to produce
a definitive set of GRI Standards. However, for the time being, the GRI G4
guidelines remain the most popular reference set used by modern companies.
The purpose of this study is to emphasize the role of world’s largest banks in
the transition to sustainable economy.
As a consequence of socio-economic changes, banks should form specific
benchmarks for other entities in the economies of modern countries. Banks, as
institutions of public trust, are also a determinant in the areas related to CSR, with
particular emphasis on pro-environmental activities. A significant role of banks for
modern economics is also confirmed by the financial results for the sector. One
example is the relation of banking sector assets to GDP, which in the EU countries
ranges from 67 % for Lithuania to 1561 % for Luxembourg (NBP Report, 2016).
The first section of this paper presents the most popular approaches to the
problem at hand, as reported in professional literature. Section two presents the
characteristics of the CSR actions in banks. The third section discusses the
environmental actions of biggest banks in GRI reporting. And the last part of the
paper presents the conclusions resulting from the article.
1. METHODS AND PROCEDURES
The study is mostly of a theoretical character. The basic method used in the
process of writing was a critical analysis of literature concerning the sustainable
transition of economy and its impact on the greening of finance and banking. Also,
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critical analysis of banks’ environmental reports, prepared according to GRI
standards, as well as induction method and comparison method have been used.
Then an attempt is undertaken to explain the environment-friendly behavior of
banks. The empirical part using descriptive analysis illustrates the theoretical results
with examples and data from the banks’ reports. The study ends with conclusions.
The main theses can be expressed as follows:
Thesis 1: The environmental responsibility of the largest banks is, at present,
very important, and the most internationally comparable effects obtained from the
realization of the corporate social responsibility (CSR) idea. Environmental actions
of banks have real impact on the reduction in natural resource, energy consumption
and emission of CO2;
Thesis 2: The world’s largest banks conduct effective pro-environmental
policies on each of the three levels of corporate environmental responsibility:
support activities (I), internal economy (II), and pro-environmental investment and
environmental risk (III);
Thesis 3: GRI (Global Reporting Initiative) is the most popular standard of non-
financial information reporting used by the world’s largest banking institutions. It
means that banks are obligated to disclose detailed information about their
environmental performance not only in the context of reputation.
2. SUSTAINABLE TRENDS IN ECONOMY, AND ENVIRONMENTAL
RESPONSIBILITY OF BANKS – LITERTURE REVIEW
The current model of economy has failed – says Tim Jackson in his book
“Prosperity without growth”. It has failed because was not able to protect the fragile
ecological systems on which we depend for survival. It has failed, spectacularly, in
its own terms, to provide economic stability and secure people’s livelihoods
(Jackson, 2009). Today’s world is characterized by the degradation of forests, lakes
and soils, conflicts over land use, water quality, fishing rights, and the
concentrations of carbon in the global atmosphere. And we face these tasks with an
economy that is fundamentally broken, in desperate need of renewal. In these
circumstances, a return to business as usual is not an option.
Banks and financial institution have to face challenges connected with
transition to green, low-carbon economy which means mainstreaming the
environment into economic development. The theory of finance needs to
incorporate the socio-ecologically embedded nature of finance (Fullwiler, 2015, p.
18). There are many initiatives which can be taken by banks, for example, saving
energy, reducing waste, financing the sectors of clean production, eco-innovations
and environmental investments (Atkisson, 2012). Green low-carbon economy
designs new jobs, attracts investors and is supported by governments. Markets for
eco-friendly products and services generate profits. Citizens express their positive
attitude towards sustainable initiatives of banks and are willing to invest their
money in green investment funds and in the shares of companies in green economy.
The economy is a sub-system of the environment. All of the inputs to the
economy come from the environment, and all of the wastes produced by it return to
the environment. As the economy grows, it requires more resources and discharges
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more wastes. Since we live on a finite planet with limited resources, it is not
possible for the economy to grow forever. This incredible increase in economic
activity has resulted in an equally incredible increase in the use of resources and
energy. This is a next challenge for banks to support the reduction in energy and
resource consumption (Dietz & O’Neill, 2013).
Recent transformation of banks is adopting itself to the new trend of greening
finance and banking. L. Dziawgo confirms it: financial market has been involved
in supporting proecological transformation of the society and economy and, at the
same time, it has been evolving slightly towards “greening” financial market
(Dziawgo, 2014, p. 11).
Another challenge for banks is mitigation and adaptation of climate change. A
historic agreement to combat climate change and unleash actions and investment
towards a low carbon, resilient and sustainable future was agreed by 195 nations in
Paris in 2015 (GCF Dispatch, 2015). There is a special role of financial institution
to create a partnership with government, civil society and industry to finance the
implementation of this agreement (Recommendation of the Task Force on Climate-
related Financial Disclosures, 2017).
Ziolo and others confirm: Many banks have recently implemented policies and
procedures that address the environmental and sustainability impacts of their
operations. The term “green banking” reflects this kind of approach in the banking
sector, which requires a strong policy framework, transparency of implementation,
adapting an environmental and social management system, and exercising
leadership in sustainable finance (Ziolo et al., 2017).
Business entities gradually depart from the business as a usual model of
operation, looking for new business models. In the new model, they get involved in
the realisation of the concept of social and environmental responsibility, designed
to reduce the negative impact of the sector upon the natural environment, and the
society at large banks has to align with this trend (Bouma, Jeucken & Klinkers,
2017). In the recent years, they increased interest in the concept of corporate social
responsibility which is called now corporate sustainability with a broader scope of
actions that better address the challenges of the sustainability transition. Banks will
no longer be neutral intermediary organisations between companies and consumers
(Jeucken, 2004). They are seen as active actors in the economic and social
processes. So far, banks have considered themselves to be uninvolved and neutral
to environmental risks created by industry. They do not themselves create risks, do
not destroy the environment, do not create waste, do not use unethically cheap labor,
do not create inequalities. Banks adopt a significant aspect of CSR (according to
ISO 26000) and GRI 4 as a reporting tool. This has happened by a sufficient
pressure of governments and consumers
W. Visser proposes a new concept of the responsibility of banks, which is called
CSR 2.0 or Corporate Sustainability and Responsibility. This new approach
acknowledges that ‘sustainability’ (with roots in the environmental movement) and
‘responsibility’ (with roots in the social activist movement) are really the two main
games in town (Visser, 2015). This is the adequate approach in the “Age of
Responsibility”, which is searching for a new, sustainable and responsible
development. CSR 2.0 means moving away from philanthropic activities,
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sponsorship of events, integration meetings and building of the image of the
company, and the moving towards creating a strategy for limiting the negative
impact on the environment and the social environment towards investing in
responsible projects, for example, “clean” technologies and energy-saving
products.
The old role of banks destabilizes. Banks are slowly responding to the new
demand in sustainable economy to align with it (Guez & Zaouati, 2015). It may be
observed that the traditional banks as an institution are changing towards banking
as a service adjusted to innovation, decentralized and sustainable production and
consumption. Some of the manifestations of this process include banks as an active
player in financing the production of energy from renewable sources, waste
recycling, reduction in greenhouse gas emission, modern products and technologies
with improved energy efficiency, sustainable transportation, sustainable supply
chains, sustainable consumption (Financing a European Economy, 2017).
Fig. 1. Environmental operations of banks.
Source: authors’ research based on Dziawgo L. (2010).
The environmental operations of banks can be sorted as (Fig. 1):
 active promotions of environmental protection, promoting ecological
responsibility in the whole financial sector (dialogue with other institutions,
sharing information with clients and other banks, supporting environmental
R&D and innovations);
 internal operations – consisting of the assessment of the consumption of energy
and materials within the institution as well as the production of waste. Banks as
an institution become responsible environmentally and reduce the burden on the
environment. Specific bank projects can be related to energy saving, recycling
and waste management and can create financial savings and reduce the costs of
the bank;
 environmentally friendly customer products and services to identify and assess
the risks of ecological projects (Schoenmaker, van Tilburg & Wijffels, 2015)
undertaken by bank.
II Internal
operations
III Environmentally
friendly customer
products and
services
I Promotions of
environmental
protection
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Remembering about the essential role of profit in the commercial activity of a
bank, it is possible to differentiate between the further kinds of actions taken by
banks within the scope of the protection of the environment in accordance with a
certain hierarchy. Actions within the scope of voluntary sponsoring initiatives in
the aid of the protection of the environment, as well as actions taken within the
scope of marketing or public relations, may be regarded as the first, which means
the lowest, level of the activity of a credit institution within the scope of the
protection of the natural resources of environment. Actions conducted at this level
require the smallest involvement for the part of a bank (Dziawgo & Dziawgo,
2016).
Actions in the area of the internal economy of a bank the objective of which is
such an organization of a workplace and the process of resource management which
will take under consideration the requirements within the scope of the protection of
the environment may be regarded as the second level of the involvement of a bank
in the protection of the environment. Therefore, as part of these actions, it is so
important to create an office organization friendly to the environment. Office
materials, and also equipment, should not be harmful to the environment, and,
moreover, it should be possible to recycle them. A significant role in shaping
ecological culture may also be played by transport economy, for instance, by means
of creating parking spaces for vehicles with catalytic converters. Moreover, within
the scope of human resources management, it is possible to introduce an ecological
incentive system which would reward suggestions put forward by employees and
relevant to the ecologization of the working environment.
Actions aiming to protect the environment, in which a bank uses the specific
character of the activity which it conducts, may be considered to be the highest level
of the involvement of this institution for the protection of the environment. Here, it
is possible to mention two groups of actions. The first of them includes financing
typical ecological investments, such as, for instance, wind farms and waste-water
treatment plants, whereas the second one includes financing the standard
investments of economic subjects, which are based upon the solutions of ecological
character. An instance of such an investment of an economic subject may be
building a production room together with equipping it with devices producing
thermal energy, which are, for instance, heat pumps. Moreover, as the actions at the
third level, it is as well recognizing ecological risk in the process of financing
economic investments that may be qualified.
Each of the following levels is a logical consequence of the previous ones. The
full implementation on every level in a bank is possible due to the implementation
of actions from previous levels. If the bank’s activities are carried out only from
selected levels, then it is not possible to speak about the full environmental
responsibility of this financial institution.
Banking is the major channels of private financing for a sustainable economy.
The financial services and investment sectors control trillions of dollars that could
potentially be directed towards a sustainable economy. More importantly, banks are
increasingly interested in acquiring portfolios that minimize environmental, social
and governance risks, while capitalizing on emerging green technologies (UNEP,
2017).
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3. ENVIRONMENTAL ACTIONS OF WORLD’S LARGEST BANKS
IN CSR REPORTS – MAIN RESULTS
The actions the objective of which is respecting environmental resources
constitute the expression of fulfilling the idea of corporate social responsibility by
contemporary organizations, and, therefore, by financial institutions such as, for
instance, banks or insurance companies as well. Analysing the contemporary
market of financial services, it is possible to observe that contemporary society,
which is becoming more and more aware of the responsibility for the environment
incumbent upon it, including as well that within the scope of the choice of a bank
appropriate for it, makes such decisions which will not only turn out to be harmless
but also friendly to the environment
Solutions and concepts raising the issue of the ecological dimension of the
functioning of economic subjects in modern economy were already appearing in
the 1980s in disciplines concerned with the functioning of enterprises. Currently, it
is possible as well to observe that those actions within the scope of the ecological
responsibility of contemporary societies are becoming one of the more important
subjects raised in the mass media, debates in various milieus both in the countries
of the European Union and those which have not yet joined this organization alike.
The strategy “Europe 2020. A strategy for smart, sustainable and inclusive growth”,
developed by the European Commission in the year 2010, significantly determines
the future of the ecological responsibility of contemporary credit institutions.
Already the name of the document itself indicates that it is regulations in the area
of the protection of the environment, and, therefore, applicable in the case of the
world’s biggest banks as well, will be treated as a priority.
Active involvement in pro-environmental activities can also be observed in the
activities of banking institutions, including the world’s largest banks. Table 1
presents a list of the world’s largest banks (as per the end of 2015).
Table 1. The world’s largest banks
Ranking
position
Bank
Country
Assets (USD bn)
1
Industrial & Commercial Bank of China
China
3 420.57
2
China Construction Bank Corp.
China
2 826.04
3
Agricultural Bank of China
China
2 740.09
4
Bank of China
China
2 589.80
5
Mitsubishi UFJ
Japan
2 458.74
6
HSBC Holdings
Great Britain
2 409.66
7
JPMorgan Chase
USA
2 351.70
8
BNP Paribas
France
2 165.95
9
Bank of America
USA
2 144.32
10
Credit Agricole
France
1 845.18
Source: Bratton & Mehmood, 2016.
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Of note here is the fact that the four largest banks in the world have their origin
in China. The dominant position of Asia is further enhanced by the recent
advancement of the Japanese Mitsubishi UFJ Financial Group (The largest banks
in the world, 2016). In addition, the sixth position in the above ranking is held by
the HSBC Holdings registered in Great Britain, but with Asian roots. The practical
impact of those institutions upon the global financial markets is undisputed. In this
context, it might also be interesting to examine their impact upon the natural
environment – both in terms of the scale of such influence and the range of methods
employed for the purpose. The bulk of pro-environmental initiatives conducted by
the largest banks is realised in the context of their CSR policies and included in
their periodic CSR reports. Table 2 presents an overview of the world’s five largest
banks that employ CSR reporting standards, together with detailed enumeration of
pro-environmental activities included in the reports. All of the institutions under
examination conduct their business in Asia. In addition, Table 2 provides
indications of standards employed in the preparation of reports, with pro-
environmental activities mapped in accordance with the GRI G4 standard of
internal environmental economy in banking.
Table 2. CSR reports by the world’s largest banks
No.
Bank
CSR Report
Pro-environmental
activities
1
Industrial & Commercial Bank of
China
+
GRI G4
+
G4-EN1
G4-EN3
G4-EN6
G4-EN8
2
China Construction Bank Corp.
+1
GRI
N/A
3
Agricultural Bank of China
+
GRI G4
+
G4-EN3
G4-EN4
G4-EN6
G4-EN7
G4-EN11
G4-EN12
G4-EN19
G4-EN27
G4-EN31
G4-EN32
G4-EN33
4
Bank of China
+
+
5
Mitsubishi UFJ
GRI G4
G4-EN3
G4-EN5
G4-EN6
G4-EN7
G4-EN8
G4-EN11
G4-EN12
G4-EN13
G4-EN15
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No.
Bank
CSR Report
Pro-environmental
activities
G4-EN16
G4-EN17
G4-EN18
G4-EN19
G4-EN22
G4-EN27
G4-EN30
1Reports are not available externally.
Source: authors’ research based on CSR reports from the five largest banks in the world.
Pro-environmental activities presented in Table 2 according to GRI G4
Standard describe the disclosures (G4 Sustainability Reporting Guidelines)
illustrated in Table 3.
Table 3. Pro-environmental disclosures in GRI G4
Disclosure
Description
Aspect
G4-EN1
Materials used by weight or volume
Materials
G4-EN3
Energy consumption within the organization
Energy
G4-EN4
Energy consumption outside the organization
Energy
G4-EN5
Energy intensity
Energy
G4-EN6
Reduction in energy consumption
Energy
G4-EN7
Reductions in energy requirements of products and
services
Energy
G4-EN8
Total water withdrawal by source
Water
G4-EN11
Operational sites owned, leased, managed in, or
adjacent to, protected areas and the areas of high
biodiversity value outside protected areas
Biodiversity
G4-EN12
Description of the significant impacts of activities,
products, and services on biodiversity in protected areas
and the areas of high biodiversity value outside
protected areas
Biodiversity
G4-EN13
Habitats protected or restored
Biodiversity
G4-EN15
Direct greenhouse gas (ghg) emissions (scope 1)
Emissions
G4-EN16
Energy indirect greenhouse gas (ghg) emissions (scope
2)
Emissions
G4-EN17
Other indirect greenhouse gas (ghg) emissions (scope 3)
Emissions
G4-EN18
Greenhouse gas (ghg) emissions intensity
Emissions
G4-EN19
Reduction in greenhouse gas (ghg) emissions
Emissions
G4-EN22
Total water discharge by quality and destination
Effluents and
Waste
G4-EN27
Extent of the impact mitigation of the environmental
impacts of products and services
Products and
Services
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Disclosure
Description
Aspect
G4-EN30
Significant environmental impacts of transporting
products and other goods and materials for the
organization’s operations, and the transporting members
of the workforce
Transport
G4-EN31
Total environmental protection expenditures and
investments by type
Overall
G4-EN32
Percentage of new suppliers that were screened using
environmental criteria
Supplier
Environmental
Assessment
G4-EN33
Significant actual and potential negative environmental
impacts in the supply chain and actions taken
Supplier
Environmental
Assessment
Source: G4 Sustainability Reporting Guidelines. Reporting Principles and Standard Disclosures, 2013.
Analysis show the diversity and multiplicity of environmental information
released and disclosed by the largest modern banks. According to data in Tables 3
and 4, the main dimensions of the bank’s environmental activity are: energy,
emissions, and biodiversity. Other dimensions include: water, materials, effluents,
waste, products and services, transport and supplier environmental assessment as
well. Energy is connected with many areas, such as energy consumption
within/outside the organization, intensity, reduction in consumption and reductions
in the energy efficiency of products and services. In the context of reporting
according to GRI standards, the emissions in banks can mean: direct and indirect
greenhouse gas emissions, greenhouse gas emissions intensity, reduction in
greenhouse gas emissions. Biodiversity describes: operational sites owned, leased,
managed in, or adjacent to, protected areas and the areas of high biodiversity value
outside protected areas; description of the significant impacts of activities, products,
and services on biodiversity in protected areas and the areas of high biodiversity
value outside protected areas and habitats protected or restored.
The presentation of harmonized environmental information by banks in
accordance with GRI standards confirms the thesis that activities in this area show
the most internationally comparable effects realized by the largest modern banks.
The GRI guidelines provide generic sets of disclosures used to communicate
the environmental effects of business operation, together with detailed and up-to-
date disclosures on specific topics included in the subsequent sections of the report,
related to specific CSR areas of the reporting entity’s operation. The GRI-based
reporting standard places strong emphasis on the role and significance of
stakeholder relations in all the CSR areas. Stakeholders, in this approach, represent
customers, suppliers, local communities, employees, and owners.
Table 4 presents the examples of pro-environmental activities undertaken by
the reporting entities. In addition, the Table presents data on greenhouse gas
emission reductions reported by the entities under study. The real reduction in the
emissions and consumption of resources is in compliance with the implementation
of low-carbon economy assumptions and global climate goals adopted at the
conference in Paris in 2015 (United Nations Framework Convention on Climate
Change, 21st Conference of the Parties, COP 21). The Paris UN Climate
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Conference represented a historic opportunity to put the world on course to meet
the climate change challenge. The world needs a new model of growth that is safe,
durable and beneficial to people from all countries (Figueros, 2015). COP21 tried
to deliver a clear pathway with short and long-term milestones, first of all in
environmental aspects.
Table 4. Examples of pro-environmental activities undertaken by the world’s
largest banks in 2015
No.
Bank
Pro-environmental investments
Emission reduction
1
Industrial &
Commercial Bank
of China
A total of 702 843 billion loans to
ecological protection, clean energy,
environmental protection, resource
recycling and other green economic
development projects.
Dust – 12 139 tons
CO2 – 44 496 tons
SO2 – 1 339 tons
NOX – 669 tons
2
China Construction
Bank Corp.
–
–
3
Agricultural Bank of
China
By the end of 2015, ABC’s green
credit indicators having covered 16
industries’ credit policies, such as
cement, steel, petrifaction, mat glass,
wind power, photovoltaic, and so
forth, and involving 4935 customers,
the loan balance is 543,13 billion
yuan; the balance loans supporting
water pollution governance in ABC is
1,32 billion yuan, and the loan balance
for renewable and clean energy
projects is 199.00 billion yuan.
The standard coal
emission reduced by
6000 tons, and
greenhouse gas
emission
reduced by 18 600
tons.
4
Bank of China
Green credits (RMB 100 million) –
4 123.
Loans to industries of high pollution,
high energy consumption – (RMB 100
million) 5 118.
Credit line of RMB1 billion for a
Public-Private-Partnership (PPP)
domestic garbage incineration for
power generation in Yinzhou District,
Ningbo. This is the first loan to PPP
projects in Ningbo, making positive
contribution to local environmental
and ecological construction.
The bank actively
implemented the
Beijing Municipal
Commission of
Development and
Reform and hired a
party to check and
verify the carbon
emission in four office
buildings and submit
the carbon emission
verification report.
The bank purchased
corresponding carbon
emission verification
quota to try eliminate
the carbon emission
from its operations.
5
Mitsubishi UFJ
The Bank of Tokyo-Mitsubishi UFJ
arranged ¥35 billion in project
financing for a solar power generation
project in Hosoe, Miyazaki Prefecture.
Total CO2 reduction
of 999 000 tons per
year 2015.
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This project is a joint venture between
GE Energy Financial Services and
Pacifico Energy. The power plant is
currently under construction and is
scheduled to begin commercial
operation in the spring of 2018. The
power plant will have a total
generation capacity of 96.2 MW and is
expected to provide power to 30,000
Japanese households a year. In
addition, the plant is expected to offset
approximately 68,200 tons of CO2
emissions per year.
Source: authors’ research based on CSR reports from the five largest banks in the world.
Environmental activities undertaken by the world’s largest banks in 2015 were
divided into two main groups: pro-environmental investments and emission
reduction. According to data in Table 4, emissions are one of the main dimensions
of the bank’s environmental activity. In this dimension, the main meaning is held
by the reduction of CO2. This is the main disclosure, which has a real influence on
modern economy, on people and other companies in all the world. Industrial &
Commercial Bank of China confirms the reduction in the emission of CO2 in 2015
by 44.5 thousand tons, Agricultural Bank of China – 6 thousand tons, and
Mitsubishi UFJ – almost 1 million tons. Pro-environmental investments of the
largest banks are connected first of all with credits and loans to environmental
protection. Banks spend very large amounts of money on investments in: using of
renewable energy sources (RES), and reducing air and water pollution. The largest
bank – Industrial & Commercial Bank of China – presents 702 843 billion loans to
ecological protection, clean energy and resource recycling as well. The Bank of
Tokyo-Mitsubishi UFJ shows ¥35 billion in project financing for a solar power
generation project in Hosoe, Miyazaki Prefecture. For this reason, a growing
interest in the investments in wind power, photovoltaic and solar panels in Asian
countries has been observed recently.
4. DISCUSSION AND CONCLUSION
The analysis of the CSR reports disclosed by the world’s largest banks seem to
validate all three of the theses presented in the opening section. The findings suggest
that the banks under study can be regarded as environmentally responsible entities.
Their reports and disclosures are produced in accordance with the internationally
recognised standards.
There are also critical opinions about the standards for reporting environmental
information. Some companies are wasting time and money creating sustainability
reports that are not effective (Leinaweaver, 2015). Other institutions that label
themselves as GRI reporters do not behave in a responsible way concerning
sustainability question, like: environmental protection, social equity or human
rights. The concept of sustainable development (SD) that underlies the GRI
guidelines for business to approach sustainability reveals some problems, e. g.,
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promoting the construction of a set of indicators instead of instilling business with
values to change their mentality so they can subscribe to the assumptions of SD
(Moneva, Archel & Correa, 2006).
However, it should be remembered that the weaknesses of reporting these
aspects do not undermine the benefits of using the GRI guidelines.
Each of the analysed CSR reports was found to provide information in all three
areas of environmentally responsible operation and environment protection. With
the exception of the China Construction Bank Corp., all the entities made their
disclosures public. The bank in question is known to produce their reports annually,
but these disclosures are not available externally and as such cannot be subject to
third-party analyses. The most detailed disclosures of internal banking policies in
the studied context were produced by Mitsubishi UFJ. This bank, in accordance
with the GRI standards, discloses the majority of indices covered by the GRI G4
guidelines for the evaluation of corporate pro-environmental involvement.
In the future, it is planned to continue research on a larger sample of financial
institutions and in a longer time horizon as well. The proposition of further research
concerns a group of banks, which will be increased also by institutions from the
European Union and the Euro zone. The development of research fields related to
pro-environmental activities and corporate social responsibility (CSR) is also the
effect of the current EU law (Directive 2014/95/EU, 2014). The Directive concerns
sharing non-financial information and information on diversity by some large
entities and groups (directive 2014/95/EU – disclosure of non-financial and
diversity information) and requires that the public interest entities, including banks,
disclose information on, among other matters, their involvement in environment
protection.
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AUTHORS’ SHORT BIOGRAPHIES
Bożena Ryszawska is an Associate Professor at the Corporate and Public
Finance Department of the Wrocław University of Economics. Her research
interests include green economy, sustainability transition, corporate
sustainability, sustainable development, sustainable consumption, and
public finance. She has 35 years of experience as a university Lecturer, and
her teaching is focused on green economy, sustainable development, and
public finance. B. Ryszawska received the Ph.D. in economics from the
Wrocław University of Economics in 1990, and the habilitation degree – in
2015.
Justyna Zabawa received the Ph.D. degree in economics from the Wrocław
University of Economics, Poland, in 2010. She has worked at the
Department of Banking, Wrocław University of Economics, since 2010.
Her research areas cover the topics of banking, green banking, corporate
social responsibility (CSR) in finance, sustainable development, monetary
policy. She has participated in many domestic and international research
and business projects: Green Transfer, the Innovative Transfer, Pioneers
into Practice (Climate KIC), Mechanisms of functioning of the euro area
(Polish Central Bank), Green banking versus economic efficiency of Polish
banking sector in the context of implementation of the Directive UE
2014/95/UE (National Science Centre, Poland). J. Zabawa is a Member of
Sustainable Finance & Accounting Association.
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