On July 12, the 2022 China SIF Summer Summit was successfully held online, organized by SynTao Green Finance and co-organized by Asia Investor Group on Climate Change (AIGCC). Policymakers, standard setters, asset owners, asset managers, intermediaries, and representatives from enterprises and academia from home and abroad came together to discuss "Building a Transition Finance System" in depth.
Dr. GUO Peiyuan, Chairman of China SIF and Chairman of SynTao Green Finance hosted the Summit. This year is the 10th anniversary of the launch of China SIF. After years of efforts, China SIF has become a flagship event of responsible investment in China and has created influential projects such as China SIF Annual Conference, China SIF Summer Summit and Top 10 Trends of Responsible Investment. This Summit focuses on current hot topics and in-depth discussions on the policy system and market trends of transition finance.
Opening remarks were delivered by Mr. WANG Zhongmin, former Vice Chairman of the National Council for Social Security Fund and Honorary Chairman of China SIF, and Ms. Rebecca MIKULA-WRIGHT, Chief Executive Officer of the IGCC and AIGCC. WANG Zhongmin pointed out that the low-carbon transition process is affected by the fallacy of composition and decomposition, which may lead to inefficiency and disorder. In order to guide micro-entities to work together to achieve low-carbon emission reduction goals, it is necessary to rely on price discovery as a market tool to gradually achieve carbon emission balance in continuous trading. He also pointed out that the current lack of participation by market players has led to a relatively low price when trading carbon emissions, and that the future should rely on the price discovery mechanism to guide more social resources to participate and promote the healthy development of the carbon market, which is also the mission and work direction of SynTao Green Finance and China SIF.
Rebecca presented the AIGCC's Investor Climate Action Plan (ICAP), which covers the four focus areas of corporate engagement, investment, policy advocacy, and investor disclosure, and categorizes investors into four tiers according to different stages of development to create a comprehensive climate action plan framework for investors. She noted that investors are actively participating in initiatives such as Climate Action 100+ and the Asian Utilities Engagement Program, and are increasingly focused on the topic of a just transition.
The first session of the keynote speeches discussed the overall trend of transition finance from a macro perspective. The Director of National Climate Center Dr. CHAO Qingchen introduced the latest scientific progress on climate change at home and abroad. She introduced the latest IPCC report AR6, which pointed out that global greenhouse gases continue to increase, global warming continues to intensify, and climate change brings more and more negative impacts on ecosystems and human and socio-economic systems. Due to the differences in national economic and energy structures, the low-carbon transition brings different degrees of benefits or drawbacks to the economy, but in China's case, it is beneficial to its economic growth.
Mr. WANG Yida, Chairman of the Supervisory Board, National Green Development Fund Co. Ltd., believes that the development of green funds can contribute to green and low-carbon transition, and the rapid growth of ESG investment has created a favorable market environment for this purpose. The National Green Development Fund has three characteristics: firstly, it has diversified shareholders and can increase credit and empowerment; secondly, it has an innovative investment model and diversified investment methods; and thirdly, it is located in Shanghai and can take advantage of Shanghai's unique advantages. Wang Yida said that the National Green Development Fund will give full play to these advantages to help green and low-carbon transition.
Dr. CHEN Daofu, Deputy Director of the Institute of Finance at the Development Research Center of the State Council, pointed out that the low-carbon transition is of great significance, and finance can guide the transition of the real economy through incentive and constraint mechanisms. First, through a better pricing mechanism, resource integration and risk management, it can effectively contribute to the increase of investments in carbon reduction and promote the development of technologies and industries such as carbon emission reduction, carbon absorption and sinking; second, finance can play the role of resource allocation to encourage the development of green industries, while moderately reducing or even inhibiting the development of some high-carbon industries; third, finance can perform some exploration in the field of carbon trading.
Ms. Yuki YASUI, Head of Asia Pacific, Glasgow Finance Alliance for Net Zero (GFANZ), introduced the background of the launch of GFANZ and the main work of GFANZ APAC, which brings together the net-zero coalitions under the UNFCCC's "Race to Zero". GFANZ helps financial institutions to set climate goals and strategies, actively communicate and collaborate with clients and stakeholders, establish targets and milestones, and support the implementation of strategies and goals through effective corporate governance structures.
In the release session, Mr. Raymond ZHANG, CEO of SynTao Green Finance and Member of China SIF Board of Directors introduced and showed the new S-ESG series solutions of SynTao Green Finance. Based on thirteen years' experience of professional ESG services, SynTao Green Finance has integrated tens of millions of ESG basic data points, dozens of ESG models and algorithms, and nearly ten thematic ESG data platforms to launch the new S-ESG series solutions, providing one-stop ESG and green finance solutions for commercial banks, asset owners and asset managers, insurance, securities, private equities, industrial and commercial corporates, academic institutions and international organizations.
The subsequent panel discussion focused on "Financing Low-Carbon Transition" and was moderated by Ms. Grace GUAN, Secretary General of China SIF and Executive Vice President of SynTao Green Finance. Dr. YU Hua, former Chairman of Morgan Stanley Huaxin Fund, Mr. JI Bing, General Manager of BlackRock CCB Wealth Management, Mr. WONG De Rui, Vice President of Total Portfolio Sustainable Investing, Economics & Investment Strategy (EIS) Department of GIC, Ms. HAN Ning, Director of market Innovation Department of the National Association of Financial Market Institutional Investors (NAFMII), and Ms. LUO Pengcheng, Head of Corporate and Asset Research of Shougang Fund Group's WW Research Institute, discussed the relationship between transition finance and green finance, the current situation of transition finance products, the prospect of development of transition finance and the challenges faced. Han Ning introduced the recent launch of transition bonds by the NAFMII to support the development of low-carbon transition in traditional industries.
The second session of the keynote speeches focused on the transition finance practices of financial institutions. Mr. YANG Yuebin, Fund Manager of Equity Investment in AXA SPDB Asset Managers, shared the topic of "Transition Finance in the Context of Common Wealth". He advocated that commercial institutions should pursue the maximum intersection of business and social values when engaging in ESG investments, emphasizing the need to do good and earn money. He believes that transition finance should take full account of one's own resource endowment and industrial technology to achieve a smooth transition while paying special attention to biodiversity conservation.
Co-founder and CEO of the Climate Bonds Initiative, Mr. Sean KIDNEY pointed out that the main challenge facing the world today is how rapidly the low-carbon transition can be completed. The continued growth of sustainability bond issuance in major economies, represented by China, and the focus on transformational finance have boosted investor confidence in green and sustainable assets.
Mr. Daniel WISEMAN, Head of APAC Policy at PRI introduced PRI's work in promoting policy and regulatory improvements related to responsible investment in China. He noted that China's low-carbon transition and high-quality development are highly relevant to the concept of a just transition. In order to facilitate a smooth transition in key sectors, necessary measures need to be taken to safeguard employment, and to provide everyone benefits and opportunities of the low-carbon transition. He emphasized that the success of a just transition requires the joint efforts of government, investors and enterprises, and introduced the Just Transition Disclosure Framework that developed in collaboration with SynTao Green Finance.
Mr. Daniel WISEMAN, Head of APAC Policy at PRI introduced PRI's work in promoting policy and regulatory improvements related to responsible investment in China. He noted that China's low-carbon transition and high-quality development are highly relevant to the concept of a just transition. In order to facilitate a smooth transition in key sectors, necessary measures need to be taken to safeguard employment, and to provide everyone benefits and opportunities of the low-carbon transition. He emphasized that the success of a just transition requires the joint efforts of government, investors and enterprises, and introduced the Just Transition Disclosure Framework that developed in collaboration with SynTao Green Finance.
Next, Mr. Raymond ZHANG introduced the main findings of the "Analysis of China A-share ESG Ratings 2022" research report at the Summit. Based on the latest ESG rating results by SynTao Green Finance, the overall ESG performance of A-share listed companies has significantly accelerated in the past year, while high ESG risk appears to be more frequent.. The report shows that the A-share market has become more sensitive to ESG factors, and the investment relevance of ESG factors in A-shares has further increased.
The second panel discussion focused on "High-Quality Transition" and was moderated by Mr. YU Jiantuo, Deputy Secretary General of China Development Research Foundation. Ms. LIU Xiaowei, Director of Special Projects Asia at the World Energy Council, Mr. Jeffrey Sukjoon LEE, Vice President and APAC Manager at the Sustainable Finance Division, Moody's ESG Solutions, Mr. ZHU Ling, Country Lead of Capital Markets, CDP China, and the Head of Credit Policy Division (Industry Research Division), Credit Management, and Green Finance Division of China Postal Savings Bank Head Office Dr. ZHANG Mingzhe, had an in-depth discussion on the shortcomings of sustainable finance in the context of high-quality transition, their causes, and potential solutions. Jeffrey pointed out that transition finance is essential to drive sustainable development in APAC. Issuers from hard-to-abate sectors need credible transition plans, strategies, and metrics if they wish to fully leverage and access sustainable finance markets. While we've seen improvements in corporate disclosures around greenhouse gas emissions, much needs to be done in terms of standardization and coverage.
Ms. Sue LLOYD, Vice-Chair of the International Sustainability Standards Board (ISSB), under the Summit's special invitation, introduced that ISSB was launched by the International Financial Reporting Standards (IFRS) Foundation at the COP26 in 2021 to develop harmonized sustainability reporting standards. She shared the key elements of two recent drafts of sustainability disclosure standard issued by ISSB, namely IFRS 1 - General Requirements for Disclosure of Sustainability-Related Financial Information (Exposure Draft) and IFRS 2 - Sustainable Disclosure Standards –Climate-Related Disclosures (Exposure Draft), and calls for consultation by the end of July.
Finally, Dr. AN Guojun, Vice Secretary-General of the Green Finance Committee and Vice-Chairman of China SIF, made a concluding speech. She pointed out that in order to give full play to the role of green finance and transition finance, it is necessary to first strengthen the innovation of investment, financial and fiscal instruments, stimulating social capital to invest in green and low-carbon industries and transition technologies; to improve the "1+N" policy system of coordinated development of green finance, green finance and industrial policies, and to promote the synergistic development of green finance, transition finance, sustainable finance, climate investment and financing, and the impact; to guide the trend of ESG investment and capital for good in green funds and improve the system. At the same time, it is also important to gradually improve the construction of industry standards, risk pricing mechanisms and other "infrastructure" frameworks related to transition finance. To cultivate green investors such as green funds and carbon-neutral funds, and effectively coordinate the innovation of capital management products with social responsibility, so as to build a system for the coordinated development of green finance and transition finance in China for the Dual-Carbon Goals.
This year's Summit was supported by strategic partners: Moody's and AXA SPDB Investment Managers. Sina Finance and house.china.com.cn provided media support for the Summit. More than 1,000 people registered for the Summit, and 1,967 views were recorded on the China Sustainable Investment Forum website (https://www.chinasif.org/) on the day of the Summit, with a total of 57,716 minutes of viewing time. More than 2,000 professionals watched the Summit live via WeChat Channel, Wind Terminal, iFinD and other platforms. The replay of the Summit is available on the official website of China SIF.
About China SIF
China Sustainable Investment Forum (China SIF), established in 2012 as a non-profit organization, it was officially registered as a private non-enterprise unit in Shenzhen in 2016, with the full name of Shenzhen Jifeng Green Finance Promotion Center, is dedicated to promoting responsible investment and providing a platform for exchanging and sharing ideas on sustainable investment, with focus on facilitating Environmental, Social and Governance (ESG) integration, advocating green finance, and contributing to a responsible capital market in China. In addition, China SIF is a member of AIGCC (The Asia Investor Group on Climate Change) and Investors Agenda.
Since its establishment, China SIF has held 9 Annual Conferences, 5 Summer Summits, 5 China SIF Weeks, and a series of featured seminars and webinars, convening the key stakeholders in sustainable investment space, such as policymakers, institutional investors, financial practitioners, listed companies, service providers, experts and researchers as well as international organizations to share their insights and good practice.
A series of landmark research reports and sustainable investment products are launched via the platform of China SIF. China SIF also supports the ESG Investment Dissertation Competition. After years of accumulation, China Sustainable Investment Forum has become a landmark event in the field. Please visit https://en.chinasif.org/ for more information.
