On November 14th 2014, the Socially Responsible Investment Survey on Chinese Mutual Funds 2014 was released on China Socially Investment Forum (China SIF)’s Second Annual Conference.
Through surveys and on-site interviews with fund managers, the report discovers that under the current context of economic transformation, the concept of ‘Socially Responsible Investment (SRI)’ has already been recognized by the market. Emerging industries are the focus of sustainability themed fund managers. However, corporate social responsibility (CSR) reports do not have much reference value due to a lack of material information disclosure.
SRI is any sustainable investing strategy which encourages investors to consider both corporate’s financial performance and its social responsibility performance. The report shows that 89% of fund managers surveyed concern about environmental, social and corporate governance (ESG) issues, among which 61% have increased their interests on ESG matters in the last 12 months. In recent years, a growing number of sustainability themed mutual fund products have emerged, such as the Industrial Green Investment Fund, Bank of China Beautiful China Fund, Fortune SG Ecology Fund, HuaAn Ecology Priority Fund and Caitong Sustainable Development Theme Fund. China SIF believes that with the establishment of sustainability themed equity funds, capital resources can be allocated towards more low-carbon, environmental-friendly and sustainable industries.
The report points out that fund managers generally expect emerging industries to be the core momentum for China’s economic development. However, they have different opinions on whether to reallocate their portfolio from traditional asset-heavy industries. Most of the fund managers surveyed suggest that China’s extensive industrial growth model featuring high energy consumption and high pollution will definitely be changed. At the same time, some of them hold the idea that directing funds to the most adaptive traditional enterprises can improve the health and sustainability of the industry and make full use of the guiding role of capital.
The report also shows that CSR reports do not provide much valuable information to investors. Many investors hope to understand more about the environmental, social and corporate governance conditions of a company. The problem is that most CSR reports lack material data that are closely related to operation of the company, so the information in the report can hardly be used in the decision-making process. China SIF suggests that the joint efforts of institutional investors, government supervision bodies, exchange houses, industry associations and NGOs can regulate and improve transparency and information standardization on CSR. Only by then, socially responsible investment market can be fully developed.
Besides, the report includes fund managers’ in*sights into the most risky ESG issues and industries for investment. This annual report is the second report of China SIF. China SIF was initiated by SynTao (SynTao Green Finance) and Security Times China CSR Research Center in 2012, a non-profit membership platform that aims to provide a platform for investors and other stakeholders to discuss SRI opportunities in China, and promote the development of China’s SRI market. SynTao Green Finance provides consulting, research and training services on sustainable finance in China. SynTao is the first consultancy signatory to the United Nations Principles for Responsible Investment (UN PRI) in China. The report is also attributed to the support of China Fund, the first professional newspaper of financial asset management industry in China.
The report is available only in Chinese version now. The English version is coming soon.
For more information, please contact:
Shen Xin
SynTao (SynTao Green Finance)
shenxin@syntao.com
86 10 586999466 to 8027