Hua Xia Bank: Room for Improvement on ESG Initiatives

5.00
23 ratings

Hua Xia Bank is a Chinese commercial bank, with operations including deposits and loans, settlements, along with securities trading. An analysis of the company's environmental, social, and governance policies are as follows:


Environment


From an environmental perspective, the company scores reasonably, outperforming on the Emissions Score front, but underperforming on the Environmental Innovation Score front.


For instance, it has implemented a resource reduction policy, which compares to the presence of a clear policy in the prior year. The company has implemented a water efficiency policy, with an energy efficiency policy implemented as well. This compares to the presence of a similar policy in the prior year.


Environmental policy areas the company is currently lacking include Resource Reduction Targets and Environment Management Training.


The company has also not implemented renewable energy use, which compares to the lack of a clear policy in the prior year. The company has also notably not implemented green buildings as well, which compares to the lack of a defined policy in this regard in the prior year.


In terms of its carbon footprint, the company's Estimated CO2 Equivalents Emission Total stands at 84,635 in the latest fiscal year, which compares to 85,700 in the prior year based on a Median CO2 Estimation Method.


Social


From a social standpoint, the company scores reasonably, particularly outperforming on the Workforce Score front, but underperforming on the Human Rights Score front.


For instance, it has implemented a health and safety policy, which compares to the presence of a clear policy in the prior year. The company has also implemented an Employee Health & Safety Policy, with a Supply Chain Health & Safety Policy not implemented as well. This compares to the lack of a similar policy in the prior year.


The company has produced a decline in Net Employment Creation. The number of employees from CSR reporting totals 40,997, relative to 42,358 in the prior year.


As of the latest fiscal year, there have not been Management Departures, while the prior year saw no departures. Meanwhile, the company experienced no strikes this year, which compares to no strikes in the prior year.


Governance


From a governance standpoint, the company scores unfavorably, particularly outperforming on the CSR Strategy Score front, but underperforming on the Shareholders Score front.


The company does not have a Corporate Governance Board Committee, a Nomination Board Committee, an Audit Board Committee, and a Compensation Board Committee. The company does have a Board Structure Policy and does have a Policy Board Independence in place. The Board has held nine meetings in the last fiscal year, which compares to 9 in the prior year. The Board size currently stands at 17 members based on the latest annual/ESG report.


The Board has an average tenure of 5.8 years, which compares to 6.9 in the prior year. Board diversity stands at 5.9% for gender diversity.


The company has implemented a Policy for Executive Compensation Performance but has not implemented a Compensation Policy linked to ESG Performance. The company has implemented a Policy for Executive Retention, and has not implemented a Succession Plan, but has implemented an External Consultants policy.


The company has not implemented CEO-Chairman Separation and does not have its CEO as a Board member. Its chairman is not an ex-CEO. Board member term duration stands at three years. In total, senior executives' compensation rose in the latest fiscal year. Notably, the CEO compensation is not linked to total shareholder return. Meanwhile, executive compensation is also not linked to long-term objectives. Sustainability compensation incentives have not been implemented. Thus far, there have not been any executive compensation controversies.


Sources:


https://www.csrhub.com/CSR_and_sustainability_information/Hua-Xia-Bank


http://www.hxb.com.cn/en/about-hua-xia-bank/investor-relationship/investor-service/index.shtml

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