Ping An Insurance (Group) Company of China, Ltd. (hereafter “Ping An” or the “Group”, HKEx:2318; SSE:601318) presented its smart poverty alleviation model and its environmental, social and governance (ESG) management system at the World Economic Forum Annual Meeting 2020 in Davos.
The theme of this year’s Davos Forum is “Stakeholders for a Cohesive and Sustainable World”, with poverty alleviation as one of the key topics. In implementing its poverty alleviation strategy, Ping An has developed various poverty alleviation models for specific industries, such as the Ping An “Poverty Alleviation Insurance Scheme” and the “Hydropower Support Scheme”.
The Ping An “Poverty Alleviation Insurance Scheme” is the first financial poverty alleviation model that leverages insurance innovation to drive industrial development in impoverished areas and accurately connects impoverished households. By implementing the “credit guarantee insurance + interest subsidy” model, risk can be shared with the government and banks, thus lowering the financing threshold for the development of local specific industries and encouraging poor households to increase production and income. To date, this model has already supported 70 projects in 13 provinces, providing poverty alleviation funds of RMB490 million in total, which has increased the annual per capita income of 46,000 low-income people by more than RMB2,000.
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China has more than 700 impoverished counties with hydropower resources, but the development of hydropower is restricted due to various reasons such as lack of scale, difficulties in financing, insufficient development capacity, among other issues. By collaborating with multiple hydropower companies under the dual model of “poverty alleviation loan + poverty alleviation corporate bond”, Ping An has built an integrated hydropower poverty alleviation ecosystem that incorporates “infrastructure, energy supply, empowerment and cultivation”, thus turning dormant hydropower resources in rural areas into an advantage for regional development. To date, the “Hydropower Support Scheme” has distributed poverty alleviation funds of RMB3.98 billion and assisted enterprises in hiring more than 2,000 temporary employees, which has benefited 100,000 low-income households.
Regarding financial inclusion, Ping An continues to expand credit channels in order to innovate, develop and introduce differentiated financial inclusion products. It provides “Benefiting Farmers” l**** to entrepreneurs in rural areas and offers interest-free l**** to female leaders of rural cooperatives in impoverished areas, in order to help women and their families move out of poverty. As of 31 December 2019, Ping An had distributed RMB50.65 million in “Benefiting Farmers” l**** and funds to rural areas, and directly supported 555 rural households and covered 38 counties. The projects covered a variety of agricultural types such as crop farming, husbandry and forestry.
Currently, Ping An’s “Rural Communities Support” programs have been implemented in 21 provinces or autonomous regions across China, and have provided an accumulated poverty alleviation fund of RMB15.8 billion, upgraded 949 rural clinics, trained 11,175 village doctors, constructed 1,054 Smart Primary Schools, and trained 11,826 village teachers, setting the benchmark for poverty alleviation in China.
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Chen Yao, Executive Deputy Director of Ping An’s Poverty Alleviation Office said, “Ping An continues to push the poverty eradication strategy, and has developed an innovative poverty alleviation model which includes ‘education and training, industry cultivation, one product per village, production and sales empowerment’, to further boost smart poverty alleviation in three directions: industry, health care and education in impoverished areas. Ping An will continue to promote smart poverty alleviation, fulfill corporate social responsibilities, foster social harmony and progression, and ensure the long-term sustainable development of the Group.”
In order to join forces within different sectors of society to implement sustainable development, Ping An combines its diversified businesses and promotes refined ESG operations that meet international standards and sets domestic benchmarks. It includes core topics such as a business code of conduct, corporate governance, responsible investment, sustainable insurance, information security, artificial intelligence (AI) governance, sustainable supply chain, and the 2030 United Nations Sustainable Development Goals. By publicly disclosing its policies and commitments in different areas, and with a professional management system to ensure efficient internal and external execution, Ping An has established leadership and influence in ESG area.
Ping An’s ESG development model and achievements have set many industry records and have been recognized by internationally renowned organizations. Ping An is the first asset owner in China to become a signatory to the United Nations-supported Principles for Responsible Investment, the first among A-shares companies to build an all-round ESG management system, and the first to establish an AI-ESG platform in the world. It is also the first asset owner in China to join Climate Action 100+ and the first insurance company in China to be selected for the Dow Jones Sustainability Emerging Markets Index.
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