The 5th China SIF (China Social Investment Forum) Annual Conference was held in Beijing on December 5th, 2017. It was jointly hosted by SynTao Green Finance, Green Finance Committee of China Society for Finance and Banking, Caixin Media, and was co-hosted by UN Sustainable Stock Exchange initiative, Principles for Responsible Investment (PRI). This event drawn great attention from capital markets in China and in the world.
The Emerging Concept of ESG Investment with Chinese Characteristics
Guo Peiyuan, the Chairman of SynTao Green Finance and the Chairman of China SIF, moderated the opening session. Ma Jun, Chairman of the Green Finance Committee of China Society for Finance Banking; Chen Chunyan, Vice Secretary General of Asset Management Association of China; Liu Chuankui, Vice Secretary General of Insurance Asset Management Association of China; Lorenzo Saa, Director of Networks and Global Outreach at Principles for Responsible Investment, delivered opening speeches.
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Guo Peiyuan, the Chairman of SynTao Green Finance and the Chairman of China SIF, hosted the conference
Ma Jun addressed that in recent years, China has made rapid progress in green finance, and has become a global pioneer in policy architecture, local pilot programs, green bonds, green industry funds, environmental stress testing and green assurance. However, Chinese institutional investors including asset managers started late in green finance compared to international peers. To improve the green finance in China, Ma made several suggestions: 1) to complete the mandatory environmental information disclosure mechanism for listed companies; 2) to promote the notion that green investment can improve long-term returns; 3) state-owned long-term investors should take the lead in green investment; 4) to encourage the research and development of green financial instruments; 5) to support third-party assurance and rating agencies; 6) to build the capacity for environmental risk analysis; 7) to encourage domestic institutional investors to disclose environmental information, and to adopt principles for responsible investment.
Ma Jun, Chairman of the Green Finance Committee of China Society for Finance and Banking delivered his opening speech
Chen Chunyan, Vice Secretary General of Asset Management Association of China, addressed that the Association’s members are managing over 50% of assets under professional management in China. The Association is promoting the responsible investment that are its recognition as a concept, and its translate into concrete actions. Society should jointly build the necessary infrastructure and framework for responsible investment, which is an inevitable trend and choice for the Chinese fund management industry.
Chen Chunyan, Vice Secretary General of Asset Management Association of China delivered her speech
Liu Chuankui, Vice Secretary General of Insurance Asset Management Association of China, addressed that insurance funds through equity, bond and other instruments are investing in the national strategy Belt and Road Initiative, infrastructure construction projects, civil projects in senior citizens’ care, community renovation and regeneration, etc. Insurance funds provide important source of finance for the substantial economy. In the near future, insurance funds will continue to carry on responsible investment focusing on the social wellbeing, the supply-side reform, and the optimization of assets allocation.
Liu Chuankui, Vice Secretary General of Insurance Asset Management Association of China delivered his opening speech
Ma Xianfeng, Vice Director of China Institute of Finance and Capital Markets, Deputy Director of Green Finance Committee, China Society for Finance and Banking, delivered the keynote speech on the ESG investment concept with Chinese characteristics. Mark Mills, the partner of Generation Investment shared his experience of gaining financial returns through sustainable investment.
The roundtable discussion of the annual conference is themed as “ESG World Trends and China’s Practices.” An Guojun, Associate Professor of Financial Research Institute at Chinese Academy of Social Sciences, Vice Chairman of China SIF; Brian Cahill, Managing Director and Global Executive Sponsor, ESG Initiative at Moody’s Investors Service; Zhang Jingguo, Assistant President of Taikang Insurance Group, Chief Strategy Officer of Taikang Asset; Matthew Arnol, Managing Director and Global Head of Sustainable Finance, JPMorgan; Emily Chew, Global Head of ESG Research & Integration, Manulife Asset Management spoke at the discussion with Luo Nan, Head of China, Principles for Responsible Investment as the moderator. They shared their sound practices and set examples for both Chinese and international institutional investors.
Roundtable Discussion: ESG World Trend and China’s Practices
The Launch of SGCX ESG50 Index
Interests in the responsible investment has been growing over the international capital market in recent years. Major institutional investors are adopting ESG factors in their decision-making and market analysis. In September, SynTao Green Finance, a leading Chinse consultancy for responsible investment cooperated with Caixin Media, one the of most trusted source of financial and business news and information services in China, and released the “Landsea· China ESG Development Index”. This time, SynTao Green Finance and Caixin came together again and published the SynTaoGF–CaiXin ESG 50 Index (SGCX ESG50 Index), the first equity index incorporating ESG performance of listed companies in Mainland Chinese market.
Fu Jihong, the Vice President of Caixin Media, made her keynote speech. Zhang Rui, the Managing Director of SynTao Green Finance, introduced this index. In order to quantify the ESG performances of listed companies, SynTao Green Finance developed an ESG indicator system that refers to international and domestic standards according to information disclosure level in the Chinese market. Companies’ ESG performances are quantified and evaluated through publicly available information and calculated into user-friendly ratings for investors to easily incorporate into their practice.
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Zhang Rui, the Managing Director of SynTao Green Finance, introduced the SGCX ESG 50 Index
The universe of SGCX ESG 50 Index is CSI 300 index, one of the most commonly used equity index in Chinese market. 50 constituent stocks with best ESG performances are selected.
The 50 constituent companies of SGCX ESG50 received certificates at the launching ceremony as companies with the best ESG performances in Chinese stock market. Those companies deserve more attention from investors for they have potential for long-term sustainable growth.
Representatives from SGCX ESG50 Constituent Companies
In the context of speedy development of Chinese economy and society, it’s important to measure ESG performances, which is also connected to companies’ long tern financial return. Huang Qing, Secretary of the Board, China Shenhua Energy; Robert Li, Vice President of International Business, China Asset Management; Wayne Silby, Chairman of SynTao and Founding Chair of Calvert Social Investment Fund, joined the roundtable discussion.
Dialogue among the Practitioners and the Researchers
In the afternoon sessions, domestic and international practitioners and researchers joined in four panel discussions. Ge Xing’an, CEO of China Emission Exchange (Shenzhen), Secretary General of Shenzhen Green Finance Committee, Financial Society for Shenzhen Special Economic Zone, hosted the first panel about product innovation in green finance for institutional investors. Frakhri Hilmi, Deputy Commissioner for Capital Market Supervision, OJK, Indonesia, introduced national strategies of Indonesia for sustainable finance innovation. Sean Kidney, Co-founder and CEO of Climate Bonds Initiative, briefed recent development in the global green bond market. Chen Yaqin, Division Chief of Green Finance Department, Industrial and Commercial Bank of China talked about Chinese innovation in green financial instruments. Jin Biao, Director of Institutional Sales Department, Shanghai Colight Asset Management Corporation Limited; Huang Chaoni, Director, Green and Sustainable Solutions, Investment Banking, Asia Pacific Natixis; Duan Jiashang, CEO of Caixin Rayliant Smart Beta joined the discussion.
Panel Discussion: Product Innovation on Green Finance for Institutional Investors
Kong Wei, Convener of Lujiazui Financial City Green Finance Committee, Partner of Zhong Lun law firm moderated the panel discussion on ESG information disclosure of listed companies. Elodie Feller, Program Lead Investment of UN Environment Finance Initiative, and Coordinator of Sustainable Stock Exchange Initiative, updated new regulations of stock exchanges in the world regarding ESG disclosure. Liu Tao, Partner of SynTao analyzed ESG reports of the companies listed in Shanghai, Shenzhen and Hong Kong. Xie Yuanjian, Vice President, Chief Technology Officer, Landsea Group shared the company’s ESG disclosure practice. Qin Erwa, Researcher, China Institute of Finance and Capital Markets; Huang Anping, Research Associate, Research Institute of Shenzhen Stock Exchange; Jon Edwards, Chief Representative, Beijing Representative Office of London Stock Exchange Group; Wang Guoping, Managing Director, Research Department, China Galaxy Securities; Qin Jun, Vice General Manager and Board Secretary, Muyuan Foods discussed methods to improve ESG information disclosure for listed companies.
Panel Discussion: ESG Information Disclosure of Listed Companies
The panel about ESG integration in asset management with the moderator Xu Xiuling, Senior Vice President of CreditEase was joined by Emily Chew, Global Head of ESG Research and Integration, Manulife Asset Management. She made a presentation on how to integrate ESG factors in the emerging markets. Natasha Buckley, Senior Manager of Investment Practices, Private Equity at Principles for Responsible Investment talked about incorporating ESG factors in PE funds. Ricco Zhang, Director, Asia Pacific at International Capital Market Association; Flora Wang, Vice President, BlackRock Asset Management; Jin Hainian, Chief Research Officer of Noah Holdings Limited, Vice Secretary-General of Green Finance Committee, China Society for Finance and Banking; Kou Riming, Senior Managing Director and Chief Financial Officer, U.S.-China Green Fund were the panelists for the discussion on integrating ESG into asset management.
Panel Discussion: ESG Integration in Asset Management
The panel about sustainable business: responsibility creates investment value was moderated by Li Guowei, CEO of Visionwe Consultancy. Xu Yongguang, the Chairman of Narada Foundation made a keynote speech on philanthropy and corporate social responsibility “version 4.0”. Kuang Ji'nan, Genernal Manager, Public Relations and Brand Management Center, Hanfor Holdings, provided his opinions on sustainable philanthropy and commercial civilization. Terry Moller, Director of Ben and Jerry’s; Sydney Amara Morris, Chair of Calvert Social Funds Advisory Council; Ma Libo, Head of CSR of JD.com, Founder and Secretary General of JD Foundation; Guo Yi, Professor, School of Economics, Beijing Technology and Business University joined in the panel discussion.
Panel Discussion: Sustainable Business: Responsibility Creates Investment Value
The 5th Annual Meeting of China SIF was supported by Lujiazui Finance City Green Finance Committee, Shenzhen Green Finance Committee of Financial Society for Shenzhen Special Economic Zone, CECEP Consulting, UIBE Center on Green Finance and Sustainable Development, AMA, Taikang Asset Management and Moody's. The annual conference was the start of the China SIF Week from 5th to 7th December. Events will include seminars on sustainable stock exchanges, green bonds, green trusts, financing poverty alleviation, green finance local pilot programs.
This article is edited and translated from report of Caixin Media