Study On Environmental And Social Responsibility Of China’s Financial Institutions Under The Constraint Of The Equator Principles

With the development of society and economy, on the one hand, more and more prominent environmental and social issues rises; on the other hand, more and more people are so conscious of the environmental and social responsibility that there is a growing emphasis on environmental and social issues. But whether Corporate Social Responsibility(CSR) started in the20th century, or the legislation on corporate environmental and social responsibility, only noticed the environmental and social responsibility of traditional industrial production enterprises. With the development of CSR, considering the special role which financial sector plays in the allocation of resources in the modern economic and social development, to extend the corporate social responsibility to the financial sector has already been discussed in the early20th century, and has been put into practice by a few developed countries in Europe and America. But until the rise of the Equator Principles in the early21st century, the environmental and social responsibility of financial institutions has really been established and has quickly developed into a global practice generally complied by financial industries. China also began to actively build environmental and social responsibility of financial institutions in response to the environmental and social risks brought by high pollution and high energy consumption enterprises.In July2007, the former State Environmental Protection Administration (now the Ministry of Environmental Protection), the People’s Bank of China, the China Banking Regulatory Commission promulgated a normative document, namely the Opinion on Implementation of the Policies and Regulations of the Environmental Protection and preventing credit risks, aiming at controlling China’s banking financial institutions to provide a loan to high pollution and high energy consumption enterprises, and therefore the environmental and social responsibility of financial institutions, or the Green Credit System, formally being established by the legal form. However, there is a huge gap between the Equator Principles and the Green Credit in idea and technology, and it is also difficult to implement it in practice, so the Green Credit System is just a slogan. Under the background of economic globalization, accepting the Equator Principles, a newly emerging industry practice followed by international financial industries, is a strategic choice of China’s financial enterprises. Meanwhile, the Equator Principles is an important reference for China to build the environmental and social responsibility of financial institutions, because in the commercial society, it is the most efficient and fair choice to realize the public purposes by following business rules and bottom-up implementation, and it is more receptive by various financial institutions. But under the existing level of development of market economy, it is clearly not consistent with China’s national conditions if the Equator Principles is completely followed by. Furthermore, the Equator Principles itself also have some drawbacks, which we need to overcome in the course of reconstruction of the environmental and social responsibility of financial institutions.