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Ping An Assists China’s Energy Transition and Combats Climate Change Risk with Financial Innovation

HONG KONG and SHANGHAI, Nov 21 2022 /PRNewswire/ — Ping An Insurance (Group) Company of ChinaLtd. (“Ping An” or the “Group”, HKEx:2318; SSE:601318) use financial innovation to support China’s energy transition and combat climate change risk, said Richard Sheng, Secretary of the Board of Directors. Mr. Sheng, who spoke via video conference, joined a seminar on green and sustainable finance at the China Pavilion of the 27th Conference of the Parties to the United Nations Climate Change Conference (COP 27).

“Climate is a common challenge facing all of humanity,” said Mr. Sheng said. “As envisaged, to achieve carbon neutrality, China needs direct investment amounting to more than RMB100 trillionthat provide opportunities for financial institutions to undertake the mission of creating social value while improving revenue.”

Managing the risks associated with climate change is an important part of the Group’s long-term development strategy. In its second task force on climate-related financial disclosures (TCFD) report in 2021, Ping An disclosed 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 manufacturing, aerospace, petrochemicals and chemicals. Ping An made a visionary move to invest in green and low carbon assets and reduce the proportion of high carbon emission assets to mitigate the financial risks associated with climate change. It is supportive China’s goals of reducing carbon emissions by 2030 and achieving carbon neutrality by 2060.

For China, as the second largest economy in the world and the largest importer and consumer of energy, energy security is of critical importance, Mr. Sheng said. “A safe transition of energy is a trend with fairly high certainty,” he said. “Ping An fully utilize its advantage in long-term capital from insurance,” said Mr. Sheng. “Coupled with the long cycle of green projects, it gives new impetus to low-carbon development while gaining steady income.”

Ping An leveraged its strength of integrated financing and also scaled up the investment in green industries in terms of investment mix,” said Mr. Sheng. 30 September 2022, Ping An’s green investment and financing amounted to approx RMB319.8 billion. From the end of June 2022Ping An Capital’s carbon neutrality equity investment totaled RMB25.6 billioninclusive RMB13.2 billion related to clean energy. In November 2021Ping An Capital served as investment consultant for Ping An Life’s RMB2 billion investment in CGN Wind Power, which develops clean energy projects such as wind and photovoltaic power. After investment, Ping a Life holds a 2.16% stake in the company.

Insurance is one of the most important sectors of the financial industry facing climate change risks, Mr. Sheng said. Ping An’s pursuit of innovation in insurance products aims to make insurance an economic “shock absorber” and a social “stabilizer”. For example, Ping An combined Catastrophe Parametric Insurance and index insurance, which uses 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, helping to speed up post-disaster reconstruction and resumption of business operations. In 2022, Ping An also launched forest carbon sink remote sensing index assurance in six provinces: Hebei, Guangxi, Hunan, Anhui, Guangdong and Guizhou. It provides carbon zinc risks protection with RMB34.28 million for 340,000 mu (22,667 hectares) of forest land.

According to Ping An’s 2021 TCFD report, less than 2% of estimated RMB7.92 trillion in Ping An’s assets in investment and banking services were related to the eight major high-carbon, or “brown”, sectors. While supporting the transition of traditional coal-fired and high-carbon customers, Ping An also helped raise their awareness of emissions control and consumption reduction, and offered technology to monitor emissions data and better navigate the path of transition. Ping An will continue to improve 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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