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ESG Survey Report for Asset Owners (2023)

ESG Survey Report for Asset Owners (2023)

Upload time:2023 - Oct
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ESG Survey Report for Asset Owners (2023) is based on a survey, jointly conducted by China Sustainable Investment Forum (China SIF), SynTaoGreen Finance and China Southern Asset Management, on asset owners' practice of engagement and stewardship in China. More than 50 Chinese and offshore asset owners have responded to the questionnaire, covering sovereign funds, pension funds, insurers, banks and their wealth management subsidiaries, family offices, and many other types of financial institutions, with more than US $2.9 trillion in assets under management (AUM).
Stewardship, also known as active ownership, refers to the use of influence by institutional investors to fulfil their fiduciary duties and exercise active ownership to maximise the long-term value of the portfolio company as a whole, including the value of shared economic, social and environmental assets. Engagement is one of the main tools used in stewardship and refers to the communication between investors and current or potential investees to enhance the ESG practices of the portfolio companies. For asset owners, stewardship is an important initiative to influence change in the real economy through green finance, and also a fiduciary duty and responsibility to fulfil. By analysing asset owners' awareness and practices of engagement and stewardship, implementing engagement and stewardship in China, and stewardship requirement for asset managers, this report provides a reference for the market to understand the attitudes and needs of asset owners for engagement and stewardship in China.

Key Findings:
  1. Awareness and Practices of Engagement and Stewardship: More than 80% of respondents have started to engage with investee companies, and their policies related to stewardship take a variety of forms. More than 80% of respondents have dedicated stewardship staff, internal investment or other teams to conduct engagement activities. 70% of respondents ranked regulatory requirements as the top driver to incorporate ESG factors into engagement.
  2. Implementing Engagement and Stewardship in China: Nearly 60% of respondents see engagement very important when investing in China, and more than 60% of respondents conduct engagement when investing in listed stocks and fixed income. Offshore respondents are more active in engaging on ESG issues with investees in China, and are more proactive in taking various types of escalation measures when engagement is unsuccessful. At the same time, offshore respondents face greater challenges in accessing Chinese companies and achieving desired outcomes from engagement efforts. Nearly 70% of respondents take annual reports and ESG rating as reference when engaging with investees.
  3. Stewardship Requirement for Asset Managers: Professional talents with engagement expertise is one of the most valued engagement capabilities of an asset manager in China, and more than 50% of respondents always consider the asset manager's knowledge and capability in engagement. 80% of respondents think the asset classes and proportions covered by engagement activities should be regularly reported by the asset managers.
  4. Stewardship is Most Valued by Pension Funds: Pension funds' awareness and commitment to engagement and stewardship is more prominent among all types of the respondents, and they have relatively more comprehensive coverage of policies related to stewardship. Pension funds expect asset managers to report the most comprehensive information. And all the pension funds respondents require asset managers to engage with companies in the portfolio.