CFIC Guide
Wang Junhui, chief investment officer of Chinese Life Insurance (Group) Company, secretary of the party committee and president of Chinese Life Asset Management Co., Ltd., believes that under the "double carbon" strategy, green investment will be the main investment theme and track in the future, so insurance funds must seize the opportunity and follow the trend, accelerate the improvement of the investment framework, improve the capability matrix, expand the business model, and continuously improve the green investment capabilities. This requires a good top-level design of green investment from the strategic level, strengthening the ability to support variety investment, and continuously improving the multi-asset portfolio and risk management capabilities. To this end, China Life Assets has fully launched the "Green Engine" plan, doing a good job of "green articles" around key areas, and launching a "green brand".
Wang Junhui, Party Secretary and President of China Life Assets
"The essence of investment is to find certainty in uncertainty, and the 'double carbon' strategy is the greatest certainty in the future global economic operation and capital market uncertainty." It will stimulate the energy revolution and industrial restructuring, profoundly change the domestic economic growth model, promote major changes in the investment logic of financial markets, and spawn new investment opportunities. Recently, Wang Junhui, chief investment officer of Chinese Life Insurance (Group) Company, secretary of the party committee and president of Chinese Life Asset Management Co., Ltd., deeply analyzed the unprecedented development opportunities under this strategy in an exclusive interview with a reporter from Shanghai Securities News.
He believes that under the "double carbon" strategy, green investment will be the main investment theme and track in the future, so insurance funds must seize the opportunity, follow the trend, accelerate the improvement of the investment framework, improve the capability matrix, expand the business model, and continuously improve the green investment capabilities. This requires a good top-level design of green investment from the strategic level, strengthening the ability to support variety investment, and continuously improving the multi-asset portfolio and risk management capabilities. To this end, China Life Assets has fully launched the "Green Engine" plan, doing a good job of "green articles" around key areas, and launching a "green brand".
Green investment reshapes the allocation structure of insurance capital
Wang Junhui believes that from the perspective of the capital market, the "double carbon" strategy will promote the second transformation of China's economic supply structure, promote the comprehensive transformation of the industrial structure from traditional manufacturing with high carbon consumption to low-carbon and environmentally friendly high-end manufacturing, and bring investment opportunities in the two dimensions of "new" and "old".
In terms of "new", strategic emerging industries such as new energy industry, new energy automobile industry, energy conservation and environmental protection industry, and high-end equipment manufacturing industry based on the energy revolution will enter a new round of historic development fast lane, and new investment is expected to reach 100 trillion yuan before 2060. The new energy-led energy supply pattern will also further affect downstream energy consumption, accelerate the efficiency of new energy utilization technology, and create a number of high-quality enterprises that use new energy.
On the "old" side, high-carbon emission industries such as electricity and steel will face structural adjustment opportunities, stricter environmental protection standards will force backward production capacity to be cleared, only a small number of leading enterprises with leading energy consumption levels will have the opportunity to win, and the investment value of these high-quality leading enterprises will gradually appear.
From the perspective of the use of insurance funds, he believes that under the "double carbon" strategy, green investment will become a "blue ocean" for insurance funds to reshape the investment structure. In the era of low interest rates in which the long-term interest rate center continues to move downward, insurance funds focusing on green investment will effectively break through the dilemma of insufficient supply of high-quality assets and alleviate the challenge of yield decline and fluctuation on the insurance asset side.
"It can be expected that under the guidance of regulatory policies, insurance funds will make great achievements in green investment, green financial product development, and participation in carbon trading markets in the future." Specifically, insurance funds can tap a large number of investment opportunities in the fields of new energy applications such as photovoltaics and wind power and transportation electrification, building energy conservation and emission reduction, industrial energy-saving transformation, and promotion of low-carbon carbon sequestration technologies. Wang Junhui said.
Actively integrate into the overall situation of international green development
Green investing is a major historic opportunity for insurance funds, but it also faces some challenges.
Wang Junhui analyzed that the challenges are mainly manifested in the following aspects: First, the market capacity is limited, and the current investment volume and income demand of China's green investment supply and insurance funds cannot be fully matched; second, the market infrastructure is lacking, the formulation of green investment standards is lacking in overall planning, and the relevant systems and information disclosure systems are not perfect enough; third, the insurance investment institutions themselves are still limited in their own capabilities, and the green investment concept is fully integrated into the investment decision-making system and risk control system, and the development of green investment products. The ability to obtain stable earnings has a lot of room for improvement.
He said that for insurance asset management institutions, green investment is by no means a simple investment and profit, but to actively integrate into the overall international green development situation through a whole-process, in-depth investment management transformation.
First, we must accelerate the formation of an ESG green investment system. The ESG green factor is fully integrated into the investment decision-making system and risk control system to realize the transformation of the investment concept from the traditional "risk + return" to "risk + return + green". The second is to improve the ability to allocate large-scale assets. Combined with the characteristics and attributes of insurance funds, select a green investment track suitable for insurance capital investment. At the same time, it is necessary to give full play to the advantages of the diversification of insurance investment methods and find the green investment areas suitable for each investment method. The third is to attach importance to scientific and technological empowerment. Build an integrated platform for green investment data analysis, enrich the source of basic research information, and effectively help achieve the goal of "carbon neutrality".
He said that as a large-scale professional institutional investor, China Life Assets is comprehensively building a "green engine" plan, firmly establishing a green investment concept, focusing on key areas such as environmental protection and energy conservation, clean production, clean energy, ecological environment, green upgrading of infrastructure, and green services, and coordinating the use of a variety of investment tools to promote the specialization, productization and branding of green investment.
"In the investment decision-making process, based on the principle of green development, according to the division system of different varieties of industries, the positive and negative investment lists are set up separately, the industry research and judgment and risk control in the investment field are pre-positioned, and the efficiency of investment decision-making is improved; in the infrastructure construction link, in the face of the current green investment standards, statistical caliber and other reality that it is temporarily difficult to unify, take the initiative to develop a statistical system and standard system with national life characteristics, try to carry out simulation tests, and lay a solid foundation for regularly sorting out investment progress, optimizing programs and allocation strategies." He said.
He revealed that combined with the medium- and long-term development plan, China Life Assets has initially formulated a green investment allocation target plan for 2030, and has made joint efforts in the three major investment varieties of bonds, stocks and non-standards, and strives to reach the leading level in the industry. Based on current market conditions and underlying assumptions, it is planned to increase the share of green investment in fixed income assets to more than 15% and the proportion of alternative assets to more than 20% by 2030.
"We will closely track the implementation of green development plans at the national level and in various industries, actively carry out research and analysis, and continue to dynamically revise relevant indicators." Wang Junhui said that according to the current system, financial institutions cannot directly participate in carbon emission trading and direct investment, but the company will continue to closely follow up and make relevant research reserves for future participation in carbon market trading.
Source of this article: Shanghai Securities News
Author: Han Songhui
WeChat Editor: Zhang Deren
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