Banks should realize their social responsibility and offer
substantial support to the green credit policy, says an article in
Beijing Youth Daily. The following is an excerpt:
Pan Yue, deputy director of the State Environmental Protection
Administration (SEPA), announced a joint effort by his department,
the People's Bank of China and the China Banking Regulatory
Commission against polluters by controlling their financing
According to their "green credit" policy, businesses would be
challenged in their application for bank loans if they fail
environmental assessments or do not observe environmental
On the other hand, businesses making an effort to protect the
environment would get more support from banks.
This latest move is aimed at pressing polluters to reduce their
emissions rather than treating the pollutants later. And it
encourages businesses with financial incentives, which might be
more attractive and practical than administrative orders.
However, a vital factor for the success of the "green credit"
policy depends on the attitude and commercial practices of
Banks are only required to comply with the policy but it could
also influence their commercial interests.
Even with the participation of the banking watchdog, it is still
possible that some commercial banks may lend to polluters.
A sense of social responsibility should be inculcated in banks
to stimulate them to play an active role in the green credit
policy. The banks should realize that they would also be
responsible for deterioration of the environment should they lend
Legal stipulations, administrative rules and inter-bank
supervision would be an effective way to remind banks of such
Non-government organizations in some Western countries have
voiced objections to banks lending to polluters with notable
The environmental department should publicize banks that finance
polluting factories alongside the polluters.
(China Daily August 1, 2007)