A major component of the Bank's approach to environmental protection is our code of conduct for conservation. The code invites employees to organize initiatives to reduce water, electricity and paper consumption.

As part of this effort,the Bank's offices now f e a t u r e d e d i c a t e d waste recovery bins for collecting used batteries,electronics and oil sludge. Helping to cut waste further is our internal office network,which saves on both time and materials by allowing files to be transmitted online rather than as printed hard copies. The Bank is also in strict compliance with national provisions for office space temperatures. As stipulated in the provisions, summertime temperatures within Bank of China offices are never reduced below 26C, and are heated to no higher than 20C during winter.

These and other energy saving and pollution-reducing activities have made a notable difference in the Bank's impact on the environment. A compelling example is that of our 3,000 square-meter Head Office, which consumed 2,814 cubic-meters less water and 21,283 cubic-meters less gas in 2007 than it did in 2006. Overall, the Bank's energy consumption per unit of profit has steadily decreased year by year. In 2007, energy consumption per RMB10,000 (after tax) of profit was RMB162.

In response to national policies regarding the "two-high" industries (high-pollution and high energy-consuming), the Bank has increased its scrutiny and analysis to produce accurate forecasting of credit risks.

The Bank's approach to different "two-high" industries is multifaceted and appropriate to the specifics of their individual operation. For example, with respect to steel and copper smelting, the Bank conducts its credit business selectively and controls the rate of credit increment to this industry; for the textile, coke and cement industries, the Bank enhances access thresholds; and for the electrolytic aluminum, ferroalloy and calcium carbide industries, the Bank strictly limits newly added credit, placing emphasis on optimizing authorized credit and promoting asset quality.

Also with regard to these industries, the Bank has intensified its post-loan tracking investigation, increased focus on certain aspects of project acceptance reports, and conducted periodic checks on enterprises' implementation of environmental protection measures. With respect to high-polluting enterprises, measures are taken to recover loans in a timely manner.

Overall, the Bank of China views compliance with national energysaving and environmental protection requirements as a precondition for credit. Credit is not granted for projects that fail to comply with national provisions for examination and approval, preliminary examination of land use, environmental evaluation, energysaving assessment, labor safety and city planning. Similarly, projects within "areas of limited approval", enterprises that are banned from the processing trade, and projects listed as infringing environment laws, are not granted credit.

本National industrial, energy-saving and environmental policies have prompted the Bank to adjust its credit structure and more actively support medium and small enterprises with innovative environmental protection-related projects. The Bank also conducts environmental protection policy compliance examinations on new credit projects, has intensified its evaluations of enterprises' pollution prevention/reduction capabilities, and introduced strict parameters for environmental evaluation of construction projects. Included in the latter are a strengthened synchronous management system and daily communications mechanism for matters of energy conservation, environmental protection and comprehensive utilization.

In less than one year, the Bank has successively granted credit lines totaling more than RMB50 billion for "green" projects such as the first phase of the Liaoning Hongyanhe Nuclear Power Project, the relocation of Capital Steel Corporation outside the capital city of Beijing, and an innovative scheme to generate electricity using waste heat from the Anhui Conch Cement Group.

In 2003, the Bank and the China Environmental Protection Foundation jointly developed the first domestic financial product aimed at supporting environmental protection causes. Under the "Green Fund" savings deposit interest donation scheme, interest on customers' deposits are donated to the China Environmental Protection Commission, and then used for sponsoring environmental and ecological engineering construction, the establishment of urban ecological parks, and publicity and education programs.