HONG KONGandSHANGHAI,Nov. 21, 2022/PRNewswire/ -- Ping An Insurance (Group) Company ofChina, Ltd. ("Ping An" or the "Group", HKEx:2318; SSE:601318) is using financial innovation to supportChina's能源转换和对抗气候变化的风险,saidRichard Sheng, Secretary of the Board of Directors. Mr. Sheng, speaking via videoconference, joined a seminar on green and sustainable finance at the China Pavilion of the 27th Conference of the Parties of the United Nations Climate Change Conference(COP 27).
"Climate is a common challenge faced by all mankind," said Mr. Sheng. "As estimated, in order to achieve carbon neutrality,Chinaneeds direct investment amounting to more thanRMB100 trillion, presenting financial institutions with opportunities to undertake the mission of creating social value while improving revenues."
Managing the risks related to climate change is an important part of the Group's long-term development strategy. In its second Taskforce on Climate-related Financial Disclosures (TCFD) report in 2021,Ping Andisclosed the bank's credit and investment portfolio and the corresponding risk exposure in eight high-carbon emission sectors: coal power, steel, cement, non-ferrous metal, paper making, aviation, petrochemical, and chemical.Ping Anhas made a visionary move to invest in green and low carbon assets and reduce the proportion of high-carbon emitting assets to mitigate the financial risks related to climate change. It is supportingChina'sgoals of peaking carbon emissions by 2030 and achieving carbon neutrality by 2060.
ForChina, as the second largest economy in the world and the largest importer and consumer of energy, energy security is critical, said Mr. Sheng. "A secure transition of energy is a trend with rather high certainty," he said. "Ping Anis fully harnessing its advantage in long-term capital from insurance," said Mr. Sheng. "In coherence with the long cycle of green projects, it gives fresh impetus to low-carbon development while obtaining steady income."
"Ping Anhas leveraged its strength of integrated finance and has also scaled up the investment in green industries in terms of investment mix," said Mr. Sheng. As ofSeptember 30, 2022,Ping An'sgreen investment and financing totaled approximatelyRMB319.8 billion. As of the end ofJune 2022, Ping An Capital's carbon neutrality equity investment totaledRMB25.6 billion, includingRMB13.2 billionrelated to clean energy. InNovember 2021, Ping An Capital served as investment consultant forPing An Life'sRMB2 billioninvestment in CGN Wind Power, which is developing clean energy projects such as wind and photovoltaic power. After investing,Ping An Lifeholds a stake of 2.16% in the company.
Insurance is one of the major sectors of the financial industry confronting climate change risks, said Mr. Sheng.Ping An'spursuit of innovation in insurance products aims to make insurance an economic "shock absorber" and a social "stabilizer". For example,Ping Anhas combined Catastrophe Parametric Insurance and index insurance, which makes use of heavy rainfall and typhoon data as parameters for insurance payouts. Once the compensation conditions are met, the compensation amount can be determined without on-site inspection, which helps accelerate post-disaster reconstruction and resumption of business operations. In 2022,Ping Analso piloted forest carbon sinks remote sensing index insurance in six provinces:Hebei,Guangxi,Hunan,Anhui,GuangdongandGuizhou. It provided carbon sink risks protection withRMB34.28 millionfor 340,000 mu (22,667 hectares) of forest land.
According toPing An's2021 TCFD report, less than 2% of the estimatedRMB7.92 trillioninPing An'sassets in investment and banking services were related to the eight major high-carbon emission, or "brown", sectors. While supporting the transition of traditional coal-powered and high-carbon emitting clients,Ping Anhas also helped to raise their awareness of emission control and consumption reduction, and offered technology to monitor emission data and better navigate the path of transition.Ping Anwill continue to enhance the accuracy and precision of climate risk assessment, while fulfilling its corporate social responsibility as a financial institution. The Company will also dynamically adjust the control of high-carbon industries and support for green industries according to relevant national policies and market conditions. It will promote quality industrial and social transformation through its professional financial products and services to empower sustainable development.
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SOURCE Ping An Insurance (Group) Company of China, Ltd.
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