21st Century Business Herald reporter Yang Xi reported from Beijing
On December 20, the 5th China Asset Management Industry ESG Investment Summit Forum and Huaxia Wealth Management Annual Investment Strategy Conference (hereinafter referred to as the "Forum") was held in Beijing City Sub-center. With the theme of "Green Origin, Harmony and Symbiosis", the forum invited experts from government, regulatory, industry and academia to discuss various topics such as global macroeconomics, international sustainable development standards, climate change and carbon market development.
In addition, the forum also released the "2023 ESG Investment Development Research Report on China's Asset Management Industry" (hereinafter referred to as the "Report") jointly authored by Huaxia Wealth Management and Hong Kong University of Chinese (Shenzhen). The report provides an in-depth analysis of global ESG investment development, sustainability information disclosure, empirical research on ESG issues and ratings, and ESG questionnaires in the asset management industry.
The report points out that in the context of the continuous growth of global ESG investment, ESG public funds and bank ESG wealth management products in the Chinese market have performed prominently, and ESG information disclosure policies at home and abroad have gradually matured. According to the report, ESG performance is closely related to corporate financial performance, and among domestic listed companies, ESG performance has an important impact on corporate operation and investment value. The report also points out that China's asset management industry is becoming more and more active in ESG investment, but it still faces challenges in ESG infrastructure such as data and investment standards.
The scale of ESG banks' wealth management products continues to grow rapidly
The development of ESG investment in China's asset management industry is not only a response to national strategies and global trends, but also indicates a new direction for the development of the industry.
"This year, more financial products with green and ESG attributes have appeared in the market, and the market demand for ESG investment continues to grow. On the basis of the continuous improvement of ESG infrastructure such as information disclosure, more standardized corporate non-financial information provides investors with a more transparent and reliable basis for decision-making. Yuan Zhihong, chairman of Huaxia Financial Management, wrote at the beginning of the report.
According to the report, domestic ESG public funds are mainly environmental protection theme and pure ESG theme fund types. As of the end of June 2023, the scale of domestic ESG public funds exceeded 590 billion yuan. From 2018 to the end of June 2023, a total of 477 ESG-themed public funds named after keywords such as "ESG", "social responsibility" and "green" have been issued in China, and the fund types are mainly hybrid and equity funds.
The release of domestic ESG indices has slowed down in the past two years. As of the end of June 2023, a total of 818 ESG indices have been issued in the market, including 323 core ESG indices named after "ESG" and "responsibility", and 495 pan-ESG indices named after other broad ESG keywords. In the pan-ESG index, "green", "carbon neutrality" and "environmental protection" are the themes that are frequently followed.
Image source: "2023 Research Report on ESG Investment Development of China's Asset Management Industry"
According to the report, the scale of ESG banks' wealth management products in China continues to grow rapidly. As of the end of June 2023, the scale of ESG-themed wealth management products was 158.6 billion yuan, a year-on-year increase of 51.29%, and more than 300 ESG-themed wealth management products were issued in the domestic market, of which the product types were mainly fixed income (74.5%), and the investment cycle was mostly 1 to 3 years (46.5%).
There is a lack of standardized ESG information disclosure rules
The report also analyzes and compares the ESG investment disclosure policies and practices of asset management institutions. According to the report, the current ESG investment disclosure policy documents issued in Europe, the United States and the Asia-Pacific region are mainly mandatory, and at the same time, strengthening climate-related disclosure is the overall trend of major international markets. In contrast, there are still no ESG investment-related disclosure policy requirements in China, but climate information disclosure requirements have already started.
It is reported that in order to understand the latest development trend of ESG in the mainland asset management industry, the research team also conducted a questionnaire survey on ESG investment in China's asset management industry, collected a total of 152 questionnaires, and conducted interviews with professional fund managers at the same time.
According to the survey results, respondents believe that domestic institutions can quickly grasp the trend and hot spots of ESG investment through learning and Xi understanding, and gradually close the gap with overseas institutions in ESG layout. In 2023, a total of 95 domestic institutions will incorporate ESG factors into their investment decisions, accounting for 62% of the surveyed institutions this year. Despite a slight contraction in 2022, ESG investing has seen a lot of attention in 2023. Looking ahead, 32% of institutions said they would consider the integration of ESG and the whole process of investment research in the next five years.
Image source: "2023 Research Report on ESG Investment Development of China's Asset Management Industry"
In addition, at present, institutions prefer to disclose official data, and independently build an ESG evaluation system by purchasing third-party ratings and data, combined with their own survey data, and integrate ESG into the whole channel of investment research. At present, nearly half of the companies (about 44%) have established or are in the process of establishing an ESG investment evaluation system. 16% of companies said that although they have not yet established their own ESG evaluation system, they plan to do so in the future to better promote the process of ESG investment. At the same time, the vast majority of institutions basically recognize the ESG ratings provided by domestic and foreign third-party institutions, and the number of skeptical institutions has decreased year by year. According to in-depth interviews, most institutions purchase ESG rating data from multiple sources, carry out data governance work, and build their own ESG evaluation systems on this basis.
According to statistics, among the 152 institutions surveyed, a total of 85 institutions have issued ESG or sustainability-related themed products in 2023, accounting for 56%, compared with the 50 issuers in 2022, the mainland asset management industry has moved more rapidly on ESG-themed products.
In terms of challenges and directions for improvement, the report shows that in 2023, "lack of standardized ESG information disclosure rules" will replace "difficult to obtain, incomplete or not credible ESG-related information" as the biggest obstacle for institutions. The second is that institutions are "uncertain or insignificant about the value that can be obtained from practicing ESG, and there is insufficient motivation", and market conditions have hit the investment confidence of institutions.
Image source: "2023 Research Report on ESG Investment Development of China's Asset Management Industry"
Judging from the results of the questionnaire, ESG investment in mainland China is still in the development stage, and it is still necessary for all participants to actively participate in the regulatory system, information quality and result evaluation and formulate standards to standardize and promote the healthy development of the industry. In addition, as the current popularization of ESG investment needs to be further strengthened, many fund managers believe that ESG investment customers are not in demand and social awareness is not high, so it is necessary for academia and industry to work together to promote investor education, popularize ESG investment concepts, and cultivate more relevant professionals.
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