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【News】SynTao Green Finance ESG Newsletter - 202208

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Update time : 2022-09-27 10:49:00

The ESG Newsletter is prepared by SynTao Green Finance to provide readers with analysis and information on green finance, responsible investment and environmental, social and governance (ESG) issues. 

 

Key Focus · STGF Insights · Policy Update · Market Update

ESG Investment Instruments Update · ESG Controversies

 

 

Key Focus

 

Investing for A Just Transition: Proposals for A Just Transition Disclosure Framework in China

SynTao Green Finance, 2022.08.23

SynTao Green Finance and PRI jointly released a new report, "Investing for a just transition: Proposals for a just transition disclosure framework in China", which analyses the policies of just transition in China, explains the need for just transition for society and the importance of just transition for investors, and proposes a corresponding disclosure framework to provide a reference for companies to disclose their just transition-related information.

Download the report at (please copy to open in your browser):

https://en.syntaogf.com/products/%E3%80%8A%E6%8A%95%E8%B5%84%E5%AE%9E%E7%8E%B0%E5%85%AC%E6%AD%A3%E8%BD%AC%E5%9E%8B%EF%BC%9A%E5%AF%B9%E4%B8%AD%E5%9B%BD%E5%88%B6%E5%AE%9A%E5%85%AC%E6%AD%A3%E8%BD%AC%E5%9E%8B%E6%8A%AB%E9%9C%B2%E6%A1%86%E6%9E%B6%E7%9A%84%E5%BB%BA%E8%AE%AE%E3%80%8B

 

From "Green" to "Blue": A Review of ESG Investment Frontiers Forum (Chinese Only)

SynTao Green Finance, 2022.08.05

On August 4th, the "2022 Shenzhen Green Financial Institutions Awarding Ceremony and Sustainable Blue Economy Finance Development and Opportunities Forum", jointly organised by Shenzhen Green Finance Association and China Sustainable Investment Forum (China SIF), was successfully held in the conference hall of Shenzhen Agricultural and Commercial Bank Building.

 

ISSB Technical Experts and Domestic Institutions Closed-Door Seminar Held Successfully (Chinese Only)

SynTao Green Finance, 2022.08.29

In March this year, ISSB issued the "The Exposure Draft IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (General Requirements Exposure Draft)" and " The Exposure Draft IFRS S2 Climate-related Disclosures (Climate Exposure Draft)" On July 20, in order to facilitate domestic enterprises and financial institutions to better understand the contents of the two exposure drafts, SynTao Green Finance and its partners jointly organised a closed-door seminar hosted by Dr. Guo Peiyuan, and invited ISSB staff members Caroline Clark-Maxwell and Tim Kasim to communicate directly with domestic organisations.

 

SynTaoGF Gives Feedback to IFRS Exposure Draft S1 & S2

SynTao Green Finance, 2022.08.12

SynTao Green Finance welcomes the Exposure Draft IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (General Requirements Exposure Draft) and Exposure Draft IFRS S2 Climate-related Disclosures (Climate Exposure Draft). We believe this work will help develop a set of more complete, consistent and comparable standards of financial disclosure relating to sustainability on a global basis.

 

STGF Insights

 

China Launched Green Bond Principles, Unifying the Market (Chinese Only)

Guo Peiyuan, Valentina Wu, 2022.08.10

On July 29, the China Green Bond Standard Committee officially released the China Green Bond Principles. The release of the Principles marks the formal establishment of the basically unified domestic green bond standard that is in line with international standards and is a milestone in promoting the high-quality development of the green bond market.

 

A Rational View of Developed Markets’ ESG Anxiety (Chinese Only)

Guo Peiyuan, 2022.08.29

In recent months, starting with Elon Musk bashing ESG, to "The Economist" publishing articles criticising ESG, there have been anxious rumours about the fading aura of ESG investment in developed markets. How should we view this change rationally? Will the anxiety in developed market be "contagious" to the Chinese market? This article tries to answer these questions

 

Policy Update

 

Three Departments: Focus on the Development of Green Finance to Improve the Green Financial Incentive Mechanism (Chinese Only)

CNR News, 2022.08.01

The Ministry of Industry and Information Technology, the National Development and Reform Commission, and the Ministry of Ecology and Environment recently jointly issued the "Implementation Plan for Carbon Peaking in the Industrial Sector".

Download the plan at (please copy to open in your browser):

http://www.gov.cn/zhengce/zhengceku/2022-08/01/content_5703910.htm

 

China's Central Bank to Allow More Foreign Banks to Tap Carbon Emission Reduction Tool

Reuters, 2022.08.26

The People's Bank of China (PBoC) said in a statement that Chinese units of Deutsche Bank and Societe Generale have been allowed to use carbon emission reduction supporting tool. China's central bank has provided financial institutions with low-cost loans to help firms cut carbon emissions.

 

Beijing: Accelerate Green Finance Reform and Encourage Financial Institutions to Set up International Green Investment Groups (Chinese Only)

China Securities Journal, 2022.08.26

Beijing Financial Services Leading Group issued the "Beijing Financial Industry Development Plan for the 14th Five-Year Period", pointing out that the green finance reform will be accelerated and a green financial centre will be built.

 

FCA Sets up ESG Advisory Committee

Financial Institutions News, 2022.08.24

Financial Conduct Authority is setting up a new advisory committee to its board to help on ESG issues, and is looking for a small number of external experts to join it.

 

Market Update

 

China’s top asset managers fall short on climate risk disclosure: Greenpeace

Asian Investor , 2022.08.15

 

Download the report at (please copy to open in your browser)(Chinese Only):

https://www.greenpeace.org.cn/wp-content/uploads/2022/08/climate-investment-report-2022.pdf

 

China's Green Loans have Maintained High Growth, with Loan Balances up 40.4% Yearly at the end of the Second Quarter (Chinese Only)

People's Daily, 2022.08.08

The People's Bank of China recently released the latest data showing that at the end of the second quarter of this year, China's domestic and foreign currency green loan balance is CNY 19.55 trillion, up 40.4% year-on-year, 7.4% higher than the end of the previous year, 29.6% higher than the growth rate of loans, with an increase of CNY 3.53 trillion in the first half of the year.

 

The Supply Chain Technology Industry launched the First "Dual ESG Structure" Syndicated Loan to Incentivise Companies to Accelerate Their Low-Carbon Transition (Chinese Only)

Yicai, 2022.08.26

The ESG structured loan involved in this transaction is a new type of financing tool to promote low-carbon transition, which can integrate the concept of sustainable development into the daily operation and business development of enterprises through the setting of ESG goals and motivate them to accelerate their low-carbon transformation.

 

The Development of Green Bonds has Gained Momentum, with a 67.8% Year-On-Year Increase in Issuance Size (Chinese Only)

Securities Daily, 2022.08.29

With the deepening of the concept of green and low-carbon development, the development of green bonds in China has gained strong momentum. Flush iFinD data show that so far this year, as of August 28, the issue size of green bonds reached CNY 492.8 billion, representing an increase of 67.8% over the same period last year.

 

ESG Investment Instruments Update

 

August ESG Funds Ranking

Note: This list screens the top 10 ESG funds by the percentage of peer group fund interval returns. The peer group funds include Equity Blend, Common Equity, International (QDII) Equity, Flexible Allocation, Enhanced Index, Passive Index, and Balanced Blend funds. 

Data source: Wind Data Terminal, compiled by SynTao Green Finance

New ESG Funds

Data source: Wind Data Terminal, compiled by SynTao Green Finance

 

ESG Indices

 

Historical Net Value of Carbon Neutrality Index (2020.06.15-2022.08.29)

Source: Sina Finance ESG Rating Center, SynTao Green Finance

 

Performance of the Carbon Neutrality Index (Data as of 2022.08.29)

Source: Sina Finance ESG Rating Center, SynTao Green Finance

 

 

ESG Controversies

 

Environmental Controversies

· On August 6, a subsidiary of Liaoning Chengda (600739.SH) was fined CNY 1,726,900 for violations such as failing to install and use automatic pollutant emission detection equipment as required.

Social Controversies

· On August 5, Bank of China (601988.SH) Shenzhen Branch was fined CNY 11.3 million for 14 violations, including over-authority for export double factoring.

· On August 5, Wuhan Branch of Huaxia Bank (600015.SH) was fined CNY 2.7 million for 8 violations, including failure to exercise due diligence in post-loan management.

· On August 5, China Merchants Bank (600036.SH) Wuhan Branch was fined CNY 2.85 million for 9 violations.

· On August 9, Dalian Branch of Pudong Development Bank (600000.SH) was fined a total of CNY 2.9 million for multiple violations.

· On August 12, China Merchants Securities (600999.SH) was investigated by the SFC for failing to exercise due diligence during its independent financial advisory business.

· On August 12, the owner of Wenzhou Joy Plaza of Seazen Holdings (601155.SH) was violently overturned by the developer to defend his rights.

· On August 13, HUA YANG GROUP (600348.SH) subsidiary Pinshu mine accident caused one death, production has been suspended for rectification.

· On August 17, a subsidiary of GREE (000651.SZ) was fined CNY 350,000 for an accident resulting in the death of one person.

· On August 17, a BYD (002594.SZ) Han was licensed for only 3 days and spontaneous combustion occurred.

· On August 18, ICBC (601398.SH) Hangzhou Branch was fined CNY 2.42 million for violating account management related regulations, etc.

Governance Controversies

· On August 9, three companies under Baiyunshan (600332.SH) were investigated by the National Health Insurance Bureau for inflated pricing and siphoning off funds.

· On August 12, Wu Xuewen, Secretary of the Party Committee and President of Ningbo Branch of CITIC Bank (601998.SH), underwent a review and investigation.

· On August 18, Hangzhou Branch of CITIC Bank (601998.SH) was fined CNY 3.3 million for violating anti-money laundering regulations.

· On August 18, Suning Global (000718.SZ)'s holding subsidiary Wuxi Suya was fined CNY 4,883,500 for alleged tax evasion.

· On August 18, Baosteel (600019.SH) sued Baosteel for patent infringement, and the claim amount rose to CNY 3 billion.

· On August 20, two public officials of Pudong Development Bank (600000.SH) were subject to disciplinary review and supervisory investigation.

· On August 20, Zhou Dong, former member of the party committee and deputy governor of Bank of Communications (601328.SH) Yunnan Branch, underwent a review and investigation.

· On August 22, the former Party Secretary and President of Hunan Branch of Bank of Construction (601939.SH), Gong Shuxiong, accepted a review and investigation.

· On August 22, China Unicom (600050.SH) had three more employees suspected of serious disciplinary violations under disciplinary review and supervisory investigation.

· On August 23, Topchoice Medical (600763.SH) was ordered to make corrections for multiple letter-disclosure violations and lack of independence.

· On August 24, Offcn Education (002607.SZ) was publicly reprimanded for failing to fulfill its deliberation procedures and letter-disclosure obligations in accordance with related transactions.

· On August 26, Gao Zhanwu, deputy general manager of PetroChina (601857.SH) Changqing Oilfield Branch, was investigated.

· On August 27, Dong Fuhai, former deputy director of the Infrastructure Office of Agricultural Bank (601288.SH), underwent a review and investigation.


 

SynTao Green Finance (STGF) is one of the first Chinese organizations specialized in providing green finance and ESG responsible investment services, starting ESG data collection and research as early as in 2009. STGF ESG data and research on ESG key issues are widely employed to support investment decisions, risk management, policy making, and sustainable finance product innovation. "STGF STαR ESG Data Platform" and "STGF ESG Risk Radar System" cover all A-share market, and Hong Kong stocks in the stock connect schemes, amounting to 5,000 listed companies. In 2020, STGF launched "STGF PANDA Climate Data Platform", providing carbon emission data of Chinese entities based on GHG protocol. STGF ESG ratings (SynTaoGF-ESG) has been onboarding on Bloomberg Intelligence, making it the first Chinese ESG rating agency to have its data displayed on Bloomberg. 

STGF is the first signatory of Chinese service provider joining PRI, a member of the first Advisory Council of Green Bond Principles and Social Bond Principles of International Capital Market Association (ICMA), the founding member of China Green Finance Committee, the certified consulting agency for UK Green Investment Bank, the first China based Climate Bonds Standard (CBS) approved verifier, a member of the National Association of Financial Market Institutional Investors (NAFMII).

 

Disclaimer:The data used in this report, unless otherwise specified, is derived from the research institution's own research or collected through publicly available sources. The research institution is therefore not responsible for decisions made or actions taken based on the information in this report or for any losses arising from such decisions or actions.

This report does not provide legal, tax, accounting or specific investment recommendations. The report does not contain and does not constitute any offer or invitation to sell or buy.