How to accelerate the "ESG" in China?

Beijing, January 19 (China News Service) -- The 2022 Annual Macro Situation Forum hosted by the Chongyang Institute of Finance of Chinese University was held in Beijing on the 18th and 19th, and a number of experts held in-depth discussions on "ESG in China".

ESG is an investment concept and evaluation standard that pays attention to the environmental, social and governance performance of enterprises, and its development concept and practice are highly consistent with the current background of global economic and social development, and have flourished at home and abroad in recent years. Since the "double carbon" strategy was proposed, ESG has always received great attention from China's capital market.

According to the China Responsible Investment Annual Report 2020, the number of China's pan-ESG indices increased to 52 in 2020, and the number of pan-ESG public funds increased to 127, with assets of 120.972 billion yuan, reaching a record high.

Tu Guangshao, member of the National Committee of the Chinese People's Political Consultative Conference and executive director of the Shanghai Advanced Institute of Finance of Shanghai Jiao Tong University, said that the development of ESG is in the ascendant, and the concept of sustainable development contained in it coincides with China's new development concept. At present, ESG investment in China is entering the process of accelerating development, both in terms of quantity and scale, and has made considerable progress in the past two years. In addition, there has also been some improvement in information disclosure, evaluation system, database support, intermediary services, etc., and the system specifications are further improved.

It can be said that the development of ESG in China is gradually advancing, in this process, how does ESG guide capital to the good?

Lan Hong, deputy director of the Eco-Finance Research Center of Chinese Min University, said that ESG investment has promoted the further strengthening of environmental and social responsibility in various industries. The industry may have been more concerned about revenue, and now it is beginning to pay attention to whether it fulfills its environmental responsibilities, social responsibilities, and social governance responsibilities. For example, under the development trend of international and domestic carbon neutrality, the concept of the environment is gradually converging towards carbon, which will inevitably bring benefits to low-carbon technology projects and enterprises, such as easier access to financial support.

Zhang Hua, director of the management department of listed companies on the Beijing Stock Exchange, believes that the ESG concept meets the inherent needs of China's high-quality economic development.

Zhang Hua further analyzed that from the perspective of promoting the realization of the "double carbon" goal, the ESG concept is highly consistent with the requirements of green transformation, which is conducive to guiding listed companies to develop new materials, new processes and new products, strengthening the development and utilization of renewable resources, promoting the adjustment of traditional industries, and promoting the realization of the "double carbon" goal. From the perspective of strengthening the leading role of scientific and technological innovation, the ESG concept promotes the development of green industries, guides enterprises to actively develop and upgrade the key technologies required, and lays out strategic and forward-looking industries, which is conducive to the industrialization of scientific and technological achievements. From the perspective of helping rural revitalization, ESG encourages active fulfillment of social responsibilities, improves social employment levels, promotes industrial development, and contributes to rural revitalization.

In Tu Guangshao's view, ESG investment has huge demand, a solid foundation and broad prospects in China, and plays a significant role in promoting China's sustainable development.

Specifically, first, ESG investments have made real economy enterprises pay more attention to sustainable development, thereby enhancing corporate value.

Second, ESG investment can guide capital to good and high-quality development, while expanding the space for capital application and deepening capital functions.

Third, ESG investment will promote the continuous development and improvement of asset management institutions and enrich asset allocation.

Fourth, ESG investment provides channels and carriers to further promote international economic, trade and investment cooperation.

It is worth noting that there are still certain problems in the current process of ESG development in China, such as imbalances in infrastructure and system construction; and imbalances in quantitative and qualitative development. How to further promote the development of ESG and accelerate the "ESG" in China?

In this regard, Tu Guangshao pointed out that the core of vigorously promoting the high-quality development of ESG investment is to optimize the ecosystem of ESG investment. On the one hand, it is necessary to expand the supply of products invested in ESG and expand the scale of ESG investment so that it can play a role in supporting or serving China's sustainable development in terms of volume. On the other hand, it is necessary to improve the infrastructure and improve the evaluation system. The current evaluation system is relatively weak, there are still problems in the use of data and data support, and the establishment of some rules and standards still needs to be promoted as soon as possible.

"ESG investment is an ecosystem, and how to form multiple roles such as governments, enterprises, investment institutions, and intermediaries into a synergy needs further research." Tu Guangshao said.

Junjie Zhang, director of the Center for Environmental Studies at Duke Kunshan University, said: "We want to establish a rule that both positive and negative externalities are incorporated into corporate investment and financial decisions." Once the rules are in place, ESG can provide corresponding information in the corporate investment decision-making process, and the market will naturally choose the best track. ”

(China News Network)