【正文】 tries started to pay attention to environmental problems and adopt measures to avoid relevant , Chinese financial institutions have implemented few environmentally related policies until paper defines the role of Chinese financial institutions on the establishment of the environmental management system based on the latest practice of international financial institutions and the current situation of China’s financial system to acplish the targets of environmental protection set forth in the 11th FiveYear Plan(2006–2010).2 Necessity of the environmental management system in financial sectorThere are several negative effects caused by environmental problems, including:(1)Corporations pay for the measures against environmental pollution, and they even go into liquidation because of enormous expenses for pollutionrelated reparations。(2)Barriers of green trade decrease exports and thus corporate profit。(3)Negative effects by corporate activities, such as pollution to the soil, result in the depreciation of properties。(4)Expenses on raw materials or pretreatment units expand to offset the decrease of the quality of raw material or resources because of pollution。(5)Largescale environmental calamities cause social and economic of the problems above increase nonperforming loans, overpayment of premiums, and environmental risks of the financial sector, which greatly influences profit which financial panies have adopted to evade environmental risks are as follows:(1)Taking environmental factors into consideration in traditional credit services。(2)Developing special financial products to support pollution control projects, environmental protection industries, and environmentally friendly development of the environmental management system can help financial institutions enhance the safety of daily operations and promote petitiveness of financial Function of financial services in the environmental protection fieldThere have been several international financial practices aimed at environmental protection 2, on how financial services promote environmental protection, the financial service function beneficial for environmental protection can be divided into three Environmental risk assessment and control As the national environmental policy and regulation are being more plete and tightened and international trade is making more limitations on environmental influences on exports, major environmental risks for financial institutions occur risks generate other risks such as credit risks or investment usually happen when clients pay for measures on environmental pollution control, or when products cannot meet national environmental standards or international trade risk assessment can help institutions avoid financial foreign banks have already adopted the Equator Principles to manage environmental risks in project banks established the environmental risk management guidelines based on the Equator Principles, such as the Environmental Risk Lending Policy by HSBC bank and Environmental and Social Risk management system by institutions of China now consider environmental influences on services, for example, stateowned mercial banks explicitly state in regulation for loan applications that project debtors have to submit the environmental risk assessment report approved by the environmental protection , institutions are not fully aware of environmental assess these risks only to keep projects legal, but with little consideration of the evasion of environmental risks probably occurring across the addition, environmental risk assessment is only applied in project insurance industry of China has not yet established environmental liability insurance, which is regarded as an opportunity brought by the environmental institutions of China have not established a plete environmental management system with relevant operational instructions and professional risk the People’s Bank of China has added environmental information into the bank credit system lately, it will take a long time for this system to be used by financial Fiscal sources for environmental protection projects Environmental protection projects refer to projects which can improve environmental quality, for example, industrial pollution control, environmental infrastructure construction, and ecological projects are usually characterized by the participation of government for a nonprofit purpose and require a large amount of funding with longterm , most financial institutions which support environmental protection projects are state policyrelated banks, international financial organizations and banking syndicates which consists of many mercial banks and insurance usually provide environmental protection projects longterm and lowinterest rate loans and Development Bank(CDB)is policyrelated bank with major national infrastructure construction as one of its support has been increasing loans on urban infrastructure since fiscal year(FY), support on environmental protection infrastructure as one type of urban infrastructure is not very stable in terms of the amount of the also does not distinguish itself from other mercial banks in terms of the loan rate and application procedure specifically for environmental protection remains unclear on the proportion of and the way that it supports such , it cannot act as a stable and strong funding source for current environmental protection protection projects in China also accept loans and technical assistance from international financial World Bank(WB)has invested US $ billion in environmental protection programs of China, which takes up % of the total amount of loans supplied by WB to China since number of loans and technical assistance programs provided by the Asian Development Bank adds up to 82 since support for Chinese environmental protection by international financial organizations is considerably large pared to other financial , it cannot be a consistent and stable financial s