Case study: How Hengfeng Bank identifies and works on strategic business opportunities to increase positive and reduce negative impacts

Stakeholder identification and consultation

Please describe which stakeholders (or groups/ types of stakeholders) you have identified, consulted, engaged, collaborated or partnered with for the purpose of implementing the Principles and improving your bank’s impacts. This should include a high-level overview of how your bank has identified relevant stakeholders, what issues were addressed/results achieved and how they fed into the action planning process.

Hengfeng Bank attaches great importance to stakeholder communication, has actively expanded communication channels, and fully listens to the opinions and suggestions from its stakeholders. The bank’s major stakeholders include governments and regulators, shareholders and investors, customers and employees, suppliers and partners, the environment, and society. In response to different stakeholder expectations and demands, Hengfeng Bank has effective communication channels, so as to provide timely response and measures.

During the 2024 reporting period, Hengfeng Bank’s stakeholder communication initiatives could be summarized as follows:

With the government and regulatory agencies: Hengfeng Bank maintains close communication with the government and regulatory agencies through daily approval and supervision, regular statistical reporting, and the release of regular reports and information announcements. This ensures that the bank remains aligned with regulatory requirements and can respond promptly to any changes in the regulatory environment. In support of national strategies and regional development, Hengfeng Bank actively studies and implements work instructions and, Internally, implements regulatory policies and supports the formulation of industry policies. Hengfeng Bank continues to strengthen internal control and compliance management, implement comprehensive risk management, and reinforce anti-corruption and anti- money laundering measures. These initiatives mentioned above help ensure stability and integrity in the bank’s operations.

With shareholders and investors: Hengfeng Bank is dedicated to providing timely, accurate, and comprehensive information disclosures. The bank maintains good relations with investors and protect shareholders’ rights and interests through different activities, including shareholder meetings, roadshows, and investor exchanges. These efforts ensure that shareholders and investors remain well-informed and engaged in the bank’s operations. At the same time, Hengfeng Bank during the 2024 reporting period continued to promote sound operations and improve its corporate governance system, also strengthening information disclosure to meet investor demand and maintain good relations. By doing so, Hengfeng Bank has ensured transparency and has built trust with its stakeholders, contributing to long-term stability and growth.

Customers: Hengfeng Bank maintains close contact with customers through a variety of channels, which include daily service communication, customer satisfaction surveys, the 95395-customer service platform, offline customer theme activities, and a customer complaint handling mechanism. The bank actively communicates with customers and consumers, proceeding with green financial product and mode innovation. Hengfeng Bank seeks to provide agile and efficient services, improve service capabilities through innovative products, and protect consumer rights at the same time. Additionally, it has focused on the needs of special groups such as private enterprises and the elderly, and improved the customer service experience and safeguarded the legitimate rights and interests of customers by strengthening the standardization of outlets, improving the level of intelligent services at outlets, creating “Hengai Home,” and optimizing online services such as remote banking services.

Employees: Hengfeng Bank effectively engages its employees through various channels such as staff congresses, regular training sessions, cultural and sports events, brainstorming platforms, and support systems for those in need. The bank has prioritized employees’ needs by protecting their legitimate rights and interests, strengthening talent development programs, establishing a fair promotion process, and paying close attention to their work, life, and physical and mental well-being. Additionally, Hengfeng Bank actively promotes a green office culture by encouraging employees to voluntarily conserve resources like food, paper, electricity, and water, thus reducing energy use and waste. These efforts have cultivated a strong environment of energy conservation and carbon reduction within the organization. Key initiatives include optimizing energy management, adopting paperless digital workflows, promoting waste sorting and recycling, advocating food-saving practices, and ensuring environmentally friendly management of official vehicles.

Supplier management: Hengfeng Bank fosters strong collaboration with its suppliers and partners through business cooperation, industry seminars, supply-and-demand matchmaking discussions, and bidding and tendering activities. Additionally, the bank has established a fair, transparent, and open procurement process to ensure procurement activities are conducted with integrity. Hengfeng Bank is committed to continuously improving its procurement system and strengthening supplier management. Regarding green and low-carbon initiatives, the bank’s “Procurement Management Measures” and “Supplier Management Measures” explicitly promote the concept of green procurement. Hengfeng Bank encourages the sourcing of domestic products and prioritizes purchasing environmentally friendly, energy-efficient, and sustainable products, provided they meet the necessary performance and quality standards.

Environment: Hengfeng Bank recognizes the importance of addressing environmental needs and fulfilling corporate responsibilities by focusing on climate change, advancing green finance, practicing sustainable operations, and supporting the national development of a green, low-carbon economy. To achieve these goals, the banks employs a dual approach in both external and internal communications. Externally, Hengfeng Bank engages stakeholders through environmental information disclosure, strategic business pricing, green public welfare initiatives, and promotion of green finance. The bank also actively participates in relevant meetings and forums to foster dialogue and collaboration. Internally, Hengfeng Bank has strengthened ESG management, expanded green financial products and services, implemented green office practices and sustainable operations, and elevated green finance to a strategic priority to support the growth of green industries.

Community: Hengfeng Bank actively engages with the community through participation in community development projects, public welfare, charitable activities, volunteer services, and financial literacy initiatives. The bank regularly organizes financial education campaigns, volunteer events, and other activities aimed at supporting vulnerable groups, enhancing people’s livelihoods and welfare, and fostering strong community relations with all stakeholders.

Hengfeng Bank recognizes the importance of maintaining open communication with its stakeholders. Using various channels and methods, the bank actively listens to and addresses their expectations and needs. Hengfeng Ban’s goal is to ensure that the interests of all stakeholders are fully considered in its ESG (environmental, social, and corporate governance) efforts, thereby supporting sustainable development.

How did Hengfeng Bank identify and work on strategic business opportunities to increase positive and reduce negative impacts?

In its 2024 PRB Reporting and Self-Assessment Template Hengfeng Bank reports that it identified and worked on strategic business opportunities to increase positive and reduce negative impacts as follows:

At the strategic level, Hengfeng Bank actively embraces the directives of the Central Financial Work Conference. The bank has integrated green finance into its overall development strategy and developed the “Implementation Plan for the High-Quality Development of Green Finance.” This plan outlines Hengfeng Bank’s development roadmap for the next five years, including specific goals and measures to achieve them. In response to shifts in the macroeconomic environment, the push toward carbon neutrality, and increasing customer demand for diversified low-carbon services, the bank continuously refined its green finance management structure. This dynamic optimization ensures that Hengfeng Bank remains agile and capable of effectively addressing emerging challenges and opportunities within the green finance sector.

During the reporting period, Hengfeng Bank implemented an intelligent green credit identification system, improving the efficiency of recognizing green businesses and strengthening the overall capacity of green financial services. Capitalizing on the opportunities presented by the growth of the national carbon trading market, the bank concentrated on carbon trading activities and offered financing products tied to carbon emissions, carbon trading, or energy efficiency. Additionally, Hengfeng Bank introduced carbon finance solutions to promote and steer the targeted allocation of limited resources toward green and low-carbon sectors.

Regarding product innovation, Hengfeng Bank consistently pursued advancements in green and sustainable finance. For instance, during the reporting period, the bank facilitated the country’s first water-saving loan linked to intellectual property and launched the inaugural green financial project loan for charging stations. Additionally, Hengfeng Bank developed the “Hengrong E” series of digital supply chain financial products and supported a high-quality state-owned enterprise in Shenzhen in successfully issuing the first green offshore bond listed on both the Hong Kong Stock Exchange and the Shenzhen Stock Exchange.

While emphasizing green finance, Hengfeng Bank also capitalized on opportunities in blue finance by establishing a “blue finance” engine to promote the transformation of “green shipping.” In 2024, the bank’s Fuzhou Branch issued a US$20.72 million guarantee to Xiamen Shipbuilding Heavy Industry Co., Ltd. for green shipping projects. This initiative created new integration channels for Hengfeng Bank’s corporate clients in both domestic and international shipbuilding sectors and offered distinctive financing options for the domestic equipment manufacturing industry to expand globally. Additionally, the bank actively engaged in the coordinated development of the Guangdong-Hong Kong-Macao region. Hengfeng Bank continued to increase resource allocation and provide tailored policy support to foster high-quality growth in the Guangdong-Hong Kong-Macao Greater Bay Area. Through bond investments, Hengfeng Bank’s Shenzhen Branch assisted Maoming Port Group Co., Ltd. in successfully issuing the 2024 offshore RMB bonds—marking the first corporate offshore blue bond in Guangdong Province and the first offshore RMB green bond in Maoming City. The proceeds are primarily designated for port infrastructure development and will support the high-quality advancement of clean energy and green transportation.

Finally, at the private sector level, Hengfeng Bank introduced the “Hengyin E-Chain” supply chain financial product. This innovative solution allows supply chain enterprises to access financing easily without requiring mortgages or guarantees. The process, from online and intelligent financing applications to credit approval and disbursement, is designed to be seamless and efficient. During the reporting period, Hengfeng Bank extended financing to 3,895 private enterprises, totaling 6.7 billion yuan. This initiative has effectively supported the growth of private businesses by offering them accessible and streamlined financial services.

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References:

This case study is based on published information by Hengfeng Bank, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:

https://hfbank.com.cn/upload/attach/Hengfeng Bank Reporting and Self-Assessment for Principles for Responsible Banking (PRB) in 2024.pdf

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