In this past annual reporting season, many listed companies will publish an “Environmental, Social and Governance (ESG) and Social Responsibility Report” in addition to the previous year's annual report. ESG refers to environmental (environmental), social (social), and governance (governance). In 2004, the UN Global Compat (UN Global Compat) first officially proposed the ESG concept.
This year marks the 20th anniversary of the introduction of the ESG concept. Over the past 20 years, ESG has become an important measure of a company's ability to operate sustainably. With the deepening of the ESG concept, more and more listed companies are incorporating ESG into the basic framework for information disclosure. According to relevant data, in 2023, about one-third of listed companies issued ESG reports, a significant increase from only one-quarter in 2022. There are changes in the number of ESG reports published. Another new trend is that the insurance industry is rising to prominence and has become one of the industries that has promoted ESG more vigorously in the past two years.
As early as 2007, the “head goose” of the life insurance industry, China Life Insurance Co., Ltd. (hereinafter referred to as “China Life Insurance Company”) began publishing the “Social Responsibility Report”. In 2019, it was upgraded to the “Environmental, Social and Governance (ESG) and Social Responsibility Report”, which has been published for four consecutive years. In the initial “Social Responsibility Report”, China Life Insurance Company mainly focused on people's livelihood security and social harmony. By the “Environmental, Social and Governance (ESG) and Social Responsibility Report”, the company continued to integrate the concept of sustainable development into all aspects of the company's operations, actively exploring the establishment of a business model with both its own growth and social contribution, and exploring a “China Life Insurance ESG Path” that is in line with the international community and has Chinese characteristics.
Based on the main business, do a good job in green finance
The Central Finance Work Conference held in 2023 clearly identified “green finance” as one of the five articles on building a strong financial nation.
On April 10, 2024, seven departments including the People's Bank of China, in conjunction with the Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Finance, the Ministry of Ecology and Environment, the General Administration of Financial Supervision, and the Securities Regulatory Commission, jointly issued the “Guiding Opinions on Further Strengthening Financial Support for Green and Low-Carbon Development”. According to this document, in the next 5 years, the world's leading financial support system for green and low-carbon development will be basically established; by 2035, various economic and financial green and low-carbon policies will be promoted collaboratively and efficiently, the standard system and policy support system for financial support for green and low-carbon development will be more mature, and resource allocation, risk management, and market pricing functions will be better utilized.
The development of green finance has become the general consensus of financial institutions. Especially for financial central enterprises, developing green finance is also a mission. China Life Insurance Company has always implemented the concept of green development, bravely being a pioneer in green finance, adhering to the new development concept of innovation, coordination, green, openness and sharing, comprehensively and systematically integrating the concept of green development into the entire business and management process of the company, and constructing and continuously improving the ESG and green finance management system characteristic of China Life Insurance.
In order to improve this article on green finance, China Life Insurance Company has established the overall goal of green finance development, formulated the “Green Finance Development Strategy (2023-2025)”, which clarifies the phased development strategy and work requirements of green finance, organically integrates green finance with various businesses, actively serves the “dual carbon” strategy, continuously improves the capacity and quality and efficiency of green finance services, and is committed to making steady progress towards a successful green finance article and promoting sustainable economic and social development.
In order to implement the green finance development strategy, China Life Insurance Company has formulated the “2023 ESG and Green Finance Work Plan” to implement green finance work into green sales, green insurance, green investment, green operation, green office and green living. It is committed to collaboratively promoting carbon reduction, pollution reduction, green expansion and growth, promoting ecological priority, conservation and intensive, green and low-carbon development, and continuously improving its ESG performance to help green finance development.
In order to meet the needs of the green transformation of society and economy for financial services, China Life Insurance Company continues to release the efficiency of green finance, inject financial “living water” into the green economy, and promote the high-quality development of related industries. Focusing on the insurance and housing business, the company will provide insurance coverage of 603.165 billion yuan to green industry customers in 2023. At the same time, the ESG/green investment system has been continuously improved. The company has built and perfected the company's green finance management system in line with internationally accepted ESG investment principles. By the end of 2023, the scale of green investment had exceeded 460 billion yuan, helping to achieve the “double carbon” target.
In order to effectively address climate change, China Life Insurance Company has fully implemented climate risk assessment and management. In 2023, the company fully implemented climate risk assessment and management with reference to the recommendations of the Financial Stability Board (FSB) Working Group on Climate-related Financial Disclosures (TCFD). Further improve the climate change response system, actively respond to climate change around the four dimensions of governance, strategy, risk identification, indicators and goals, identify and evaluate climate risks and opportunities, carry out identification and evaluation work through the product side, operation side, and investment side, and formulate response plans for the next stage.
Steady management, anchoring the direction of sustainable development
Sustainability is the way to win in the long run. ESG is a key element in achieving sustainable development. Under the ESG concept, a new view of performance will be formed, focusing on financial indicators such as return on capital and net profit in the past to focusing on the “three major performances” of the economy, environment, and society. For businesses, achieving sustainable development requires a balance between commercial value and social responsibility. An excellent enterprise should not only have good performance growth data, but also have a vision and potential for sustainable development.
Prudence, honesty and compliance have always been the business philosophy of China Life Insurance. Guided by this concept, China Life Insurance Company takes into account the overall balance, promotes comprehensive management, and formulated the “ESG Risk Management Measures (Trial)”, which follows the five major risk management principles of global, prudential, forward-looking, applicable and dynamic, and implements the five work steps of ESG risk identification, risk assessment, risk response and control, attention and improvement, reporting and filing to effectively carry out ESG risk management.
In 2023, China Life Insurance Company will continue to optimize its corporate governance structure and raise the level of corporate governance. Using the “Comprehensive Risk Management Regulations” as the general outline, a “1+7+N” comprehensive risk management system was refined. Using seven types of risk systems as a starting point, and relying on a series of business implementation rules such as the “Risk Preference System Management Measures”, the maturity of the risk management system has improved comprehensively when refining risk management.
At the same time, China Life Insurance is actively responding to the adjustment of comprehensive risk rating indicators under the second phase of the “repayment for the second generation” rule, carrying out comprehensive risk rating data management work, self-assessment of the company's strict risk management capabilities, and earnestly carrying out rectification and improvement. The company's comprehensive risk rating maintained a good rating in 2023, and has had 23 consecutive A categories.
Become a human being and stick to the original intention of insurance for the people
“Become a person, achieve oneself as an adult” is the core concept of China Life Insurance, and insurance for the people is also a vivid expression of the “social” social dimension in ESG.
ESG helps companies examine their brand positioning, strategic ideas, business direction, product forms, etc. from a higher perspective from a new perspective and thinking framework. China Life Insurance Company adheres to the ESG strategic concept of “putting people first, caring for life, creating value, and serving society”, and has built an ESG and social responsibility strategic model around the three dimensions of the environment, society, industry, customers, enterprises, employees and the seven major environmental stakeholders. It is committed to serving the overall situation of society and meeting people's diverse insurance needs through the supply of professional insurance products.
In terms of inclusive finance, China Life Insurance Company helped establish a “basic+major illness+supplement+relief” multi-insurance network. By the end of 2023, it had undertaken more than 200 major illness insurance programs nationwide, covering nearly 350 million urban and rural residents. At the same time, as one of the first commercial insurance companies to respond to the national long-term care insurance policy and participate in the pilot system, it is actively developing long-term care insurance. By the end of 2023, it had launched more than 70 long-term care insurance programs, covering more than 38 million people. In addition, the company also continues to further develop city-specific commercial medical insurance (“Huimin Insurance”), underwriting various Huimin insurance projects such as Zhuhai Daai Wujiang, Guangzhou Suisikang, Hangzhou West Lake Insurance, Chengdu Huirong Insurance, and Longjiang Huimin Insurance, and is committed to innovating a multi-level medical insurance system. By the end of 2023, 32 provincial branches had launched customized commercial medical insurance projects in more than 120 cities, covering more than 40 million people.
In 2023, China Life Insurance Company further broadened the breadth of inclusive insurance services, developed and continuously improved an inclusive insurance product system, covering health care, occupational security, etc., and provided targeted comprehensive insurance products such as major illness insurance, and actively promoted the high-quality development of inclusive finance.
In terms of pension finance, China Life Insurance Company focuses on its main business, continues to expand the coverage age and disease coverage of aging insurance products, and provides “warm” pension insurance products for the elderly through internal and external collaboration, further improving the resilience of the elderly to risks and helping guarantee the quality of life of the elderly. By the end of 2023, the company's group insurance channel provided about 3.6 trillion yuan of coverage for about 50 million elderly people; the total amount invested in the Big Health Fund was 14.438 billion yuan, and the scale of the investment in the pension sector was nearly 10 billion yuan.
After years of hard work, China Life Insurance has formed a “institution+community+home” three-in-one old-age service system, covering all types, levels, and multi-faceted old-age security and old-age care needs under China's 9073 pension pattern.
In terms of rural revitalization, China Life Insurance has responded positively to the national strategy, adheres to the “people-centered” role, plays a “stabilizer” role in the insurance society, provides diversified insurance products for the rural population, and tightly tightens the insurance protection network for the peasant community. It has formed a rural revitalization product system covering multiple types of insurance, such as life insurance, illness, medical treatment, and accidents.
Throughout its development history, the insurer “Tou Yan”'s ESG leadership path is clearly on paper. Under the corporate ESG strategy of “building an international first-class and responsible life insurance company,” China Life Insurance continues to break the waves and move steadily forward on this “China Life Insurance ESG Path”, which is in line with the international community and has Chinese characteristics.