21st Century Business Herald reporter Hu Tianjiao Beijing report On November 3, Zhang Jiayu, founding investor and executive director of Noah Holdings, said at the 16th 21st Century Asian Financial Annual Conference Low Carbon Forum that the global development trend of ESG is very obvious, from just an initiative in the past to the needs of the market now. ESG and double carbon is actually a combination of macro and micro, long-term and short-term organic combination, if the combination of the two is good, you can further and efficiently achieve the goal of "double carbon" and "common prosperity".
Zhang Jiayu said that in the past two or three decades, Europe and the United States have carried out more practical implementation and implementation of ESG, establishing a clearer framework and scope, thereby helping investment institutions to consider how to invest in a company from a non-financial perspective. "In the past, many people doubted why they should invest in ESG, but after more than 20 years of evolution, the question has now shifted from why to why to why not to invest."
"For the purpose of business operation, the company itself has carried out a lot of reflection, that is, only focusing on the interests of shareholders can not make the enterprise sustainable, only all relevant stakeholders to form a win-win and co-prosperity environment, the opportunity to truly create strategic value, so that the long-term sustainable development of the enterprise." Zhang Jiayu added that the investment community has also reflected on it, from looking only at financial statements in the past to seeing more non-financial reports now.
She pointed out that free cash flow and average operating costs are the two most concerned indicators in the investment community, which are also increasingly recognized. "More importantly, the early days of ESG investment are a beautiful yearning, after time precipitation, the return pursued by ESG investment is the average market value that has been adjusted for risk, and the financial return is only the basis of the house, if you want to see the long-term sustainable value, how high the house can be built, it is very important, and this is what we are most concerned about, non-financial factors just play an important role in it."
Zhang Jiayu believes that not understanding carbon asset management as a way to potentially obtain additional benefits is one of the most important jobs that companies today are most likely to overlook. "Companies should consider their own carbon footprint to achieve carbon neutrality within the scope of their supply chain. Trading is only possible when a company's own carbon assets are calculated and effectively managed. After this, carbon assets can be used as collateral to obtain low-interest loans from banks, forming a very good brand image and achieving better disclosure. ”
Zhang Jiayu explained that the growth rate of global ESG asset scale was 13.02%, exceeding the average growth rate of general asset management by 6%. "The UN pri signatories have also expanded to more than 4,000, with assets under management of 121 trillion yuan, Noah was the signatory of the PRI last year, when only 47 institutions in China signed, and now the number has exceeded 75, and I believe this number will continue to increase in the future."
"The pandemic has accelerated international investors' understanding of ESGs," she further showed, adding that according to msci's survey, 77% of investors have significantly increased or moderately increased their investment in ESGs in response to the pandemic. 30% of these large institutional investors have made it clear that climate change will be seen as a very important key factor in investment considerations in the next 3-5 years.
At the same time, Zhang Jiayu said that a trend that can be seen at the same time is that after 30 years of evolution, the investment strategy of ESG around the world has also developed from the simplest negative to today's new investment strategies, such as positive screening, ESG integration, sustainable theme funds, and impact investing. "Of course, the positive screening we are currently seeing is still the mainstream of ESG investment, and the most important dependence on positive screening comes from the information disclosure of various listed companies."
"In China's practice, in terms of green credit, securities, sustainable investment, industrial funds, and even thematic double carbon funds, there is already a lot of capital investment from the data point of view." Zhang Jiayu pointed out that ESG is inseparable from the collaboration of wealth and asset management services.
"Noah is a wealth management company that was listed on the New York Stock Exchange in 2010 with an allocation of about 900 billion yuan." She added that in 2017, Noah released ESG reports to global investors, joined international organizations to learn, understand international trends, and provide investors with relevant and appropriate choices. This year, Noah also released the "Impact Investing Report" and formed the GP Alliance. "We hope that through our own strength, we will work with private equity investors and invested companies to promote the development of enterprises to be more in line with the goal of sustainable development."
However, Zhang Jiayu also admitted that a reality that must be faced is that Noah mainly serves high-net-worth customers, through the survey, Noah found that 55% of the respondents said that they did not know the specific reason for ESG, 25% of the respondents claimed that they still needed to observe, and only 15% of the respondents said they could try to invest. "However, looking ahead, it is very clear that millennials' recognition and demand for ESG is very obvious."
She said that at present, ESG is still in its infancy, and enterprises and investment institutions need to work hard to do a good job in information disclosure and rating.
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