Shenzhen Securities Information Co., Ltd. (hereinafter referred to as "SZSE"), a wholly-owned subsidiary of the Shenzhen Stock Exchange, recently announced that it will release four indices on December 22, including the SZSE State-owned Enterprise ESG Index, SZSE Private Enterprise ESG Index, SZSE ESG Growth Index, and SZSE ESG Value Index, to reflect the stock price changes of listed companies with leading ESG (environmental, social, and governance) performance in Shenzhen in multiple dimensions, and further improve the ESG index system of SZSE. Industry insiders pointed out that this is a pragmatic measure for the Shenzhen Stock Exchange to increase its efforts to support the reform of state-owned enterprises and the development and growth of the private economy, and to improve the quality and efficiency of high-quality development of capital market services.
The ESG index of domestic private enterprises "debuted"
The release of the four new indices is "timely" to actively help various industries promote green and high-quality development, better share the fruits of green development with investors in the whole market, and promote the improvement of the sustainable investment ecology.
As the "new force" of the national economy, the private economy is an indispensable and important force for promoting high-quality economic development. Among the new indexes released this time, the upcoming SZSE Private Enterprise ESG Index (code 970056) has attracted much attention. According to reports, the SZSE Private Enterprise ESG Index is the first index in China that focuses on the ESG performance of private listed companies, and selects 50 stocks with top ESG scores to form sample stocks. The sample gathers private companies with high green attributes, strong sense of responsibility, and excellent operation quality, such as CATL, a leader in new energy batteries, SF Holdings, a model for protecting employees' rights and interests, and Inovance, a pacesetter in internal control and governance. As the "main front" of private enterprises, the Shenzhen Stock Exchange has cultivated a number of new economy benchmark enterprises such as CATL, BYD and Mindray Medical in recent years, and 6 of the 10 private enterprises with the largest total market value of A-shares are listed on the Shenzhen Stock Exchange.
At present, the Shenzhen Stock Exchange has become a "new highland" for deepening the reform of state-owned assets and state-owned enterprises. In the past three years, the compound growth rate of operating income and net profit of state-owned enterprises in Shenzhen was 11.6% and 9.4% respectively, and the reform and development have achieved remarkable results. The upcoming SZSE State-Owned Enterprises ESG Index (code 970055 also brings together a number of leading A-share companies in the ESG field, such as BOE A, the world's leading semiconductor display supplier, Weichai Power, a leading domestic automobile and equipment manufacturing company, and Wuliangye, a wine company selected as one of the first batch of green design demonstration enterprises by the Ministry of Industry and Information Technology.
Serve diversified investment needs
According to reports, the upcoming SZSE ESG Growth Index and SZSE ESG Value Index will highly integrate the two mainstream style factors of the A-share market with ESG concepts, which is not only an innovative application of the ESG evaluation results of the CNI, but also a forward-looking layout of the local ESG investment development trend, aiming to better serve the diversified ESG investment needs.
Specifically, the SZSE ESG Growth Index (code 970060) reflects the stock price changes of listed companies with good ESG performance and outstanding growth ability in the Shenzhen Stock Exchange, while the SZSE ESG Value Index (code 970061) reflects the stock price changes of listed companies with good ESG performance and high valuation recovery potential in the Shenzhen Stock Exchange.
According to the data, the revenue of the sample companies of the SZSE ESG Growth Index in the third quarter increased by 34.7% year-on-year, and the net profit attributable to the parent company increased by nearly 3 times year-on-year. As of the end of November, the price-to-earnings ratio of the SZSE ESG Value Index was about 16.7 times, and the net profit of the sample companies in the third quarter increased by 37.2% year-on-year.
It is reported that the four ESG indices released this time are the further application and expansion of the research results of the ESG evaluation of the CNI, aiming to enrich the supply of ESG indices in Shenzhen and serve the increasingly diversified ESG investment needs.
Actively contribute to the construction of the ESG ecosystem
Under the new development pattern, ESG, as the core framework for the sustainable development of enterprises, is an important starting point for the capital market to serve the "dual carbon" goal, and it is also an inevitable choice for listed companies to achieve high-quality development. In July 2022, the Shenzhen Stock Exchange guided SZSE to research and release the CNI ESG evaluation methodology, and successively launched a series of indices based on the Shenzhen Stock Exchange Core Index, such as ESG benchmarks, ESG leadership, and ESG enhancement, actively promoting the development of the local ESG investment ecosystem and striving to build China's ESG best practices.
The investment research team of CITIC Securities said that under the guidance of high-quality development, ESG has become a new trend in the development of enterprises. Looking back on 2023, the proportion of information disclosure of A-share listed companies will reach 34%, and the number of enterprises will increase by 23% year-on-year. Looking ahead, on the one hand, it is expected that there will be a breakthrough in the work of domestic ESG information disclosure standards, which are expected to be implemented in 2025. On the other hand, as large companies set up ESG audits of suppliers, ESG has become a new manifestation of the competitiveness of enterprises to develop customers, and ESG performance will also greatly affect corporate reputation. At the same time, the concept of ESG may also be integrated into the construction of the green financial system and become a key plan for financial work. In order to meet the demands of different funders for ESG investment, it is also necessary to further expand the scope of ESG investment and research, deepen the construction of ESG investment and research system, and ensure the dual benefits of investment and society.
"From a macro perspective, ESG can improve the quality of the real economy. With the help of capital, we will improve the efficiency and quality of the real economy, force the transformation and upgrading of traditional industries, promote the growth and development of emerging industries, and improve the relationship between production and operation and the ecological environment, so as to achieve the unity of economic and ecological benefits, and provide new impetus for high-quality economic and social development. With the rapid development of ESG concepts and frameworks, corporate ESG practices and responsibilities are gradually deepened, and relevant information disclosure provides a more adequate way for enterprises and investors to interact, and will also play a role in supervision and governance in improving information transparency.
According to Guosen Securities, the construction of ESG ecosystem has become an important policy tool to promote the low-carbon transformation and development of the mainland, and promoting the construction of ESG policies and standard systems that are in line with the "double carbon" goal is the main direction of the current ESG ecosystem construction. At this stage, the construction of the ESG ecosystem focuses on energy transition and environmental governance, aiming to promote enterprises to improve environmental performance and enhance sustainable development and competitiveness through measures such as adopting clean energy, improving energy efficiency, and reducing carbon emissions. (Reporter Wei Xiayi reports from Beijing)