On July 11, the 2023 China SIF Summer Summit was held in Beijing. Experts engaged in in-depth discussions and exchanges on investors' engagement with companies. This year's Summit is hosted by SynTao Green Finance and the Institute of Finance and Sustainability (IFS), with the Asia Investor Group on Climate Change (AIGCC) as co-organiser. Strategic partners include Moody's and AXA SPDB Investment Management. The China Climate Engagement Initiative (CCEI) was successfully launched at the Summer Summit.
Dr. Guo Peiyuan, Chairman of China SIF and of SynTao Green Finance, moderated the Summit. He stated that there is a big gap in the application of engagement and stewardship between Chinese and foreign institutional investors. This year's China SIF Summer Summit aims to increase the understanding of engagement and stewardship in the Chinese capital market through in-depth discussions and to promote dialogue between investors and listed companies.
Mr. Wang Zhongmin, former Vice Chairman of the National Council for Social Security Fund and Honorary Chairman of China SIF gave the first keynote speech titled "From Shareholder Engagement to Full Commitment", in which he proposed the necessity to establish a complete set of governance frameworks and to expand the concept of "shareholder engagement" to the whole society to promote the high-quality development of China together.
Dr. Ma Jun, Director of the China Green Finance Committee and the Institute for Finance and Sustainability, stated that green finance has developed rapidly domestically and globally in recent years. The market size has been continuously expanding. However, in response to global climate change, it is essential to improve the transition finance framework so as to promote the orderly transition of high-carbon industries to low-carbon ones. He stressed that practising engagement is an important step for institutional investors to participate in transition finance through the investment side and thus support enterprises to achieve low-carbon transition, and that working together can bring influences and expertise together to empower enterprises and work with them to push forward the transition process through dialogues with investee enterprises.
Mr. Cao Deyun, Executive Vice President and Secretary General of the Insurance Asset Management Association of China (IAMAC), introduced the background and significance of engagement in the insurance asset management industry in terms of the social relevance and commercial value of ESG investment as well as the current problems faced by the insurance industry. He pointed out that the IAMAC is actively exploring the introduction of engagement tools. The IAMAC intends first to promote a group of institutions that have the foundation and ability to carry out pilot projects and then promote the implementation of engagement requirements in the industry in a gradual manner, so as to guide the various parties involved in ESG investment in the construction of an ESG investment ecosystem, to jointly promote the economic and social green, low-carbon transition and sustainable development of the economy and society, as well as the implementation of ESG investment.
Mr. Wang Yida, Chairman of the Supervisory Board of National Green Development Fund put forward several thoughts on deepening ESG responsible investment practice. He pointed out the great potential for green investment to promote green and low-carbon development. Responsible investment is value-driven and has a mid-to-long-term nature; integrating factors such as ecological benefits, social values and corporate governance into the investment evaluation system provides enterprises with a framework for action to better respond to the challenges of risk and thus achieve sustainable development.
At this year's Summer Summit, the China Climate Engagement Initiative (CCEI) was officially launched by China SIF and the IFS, with 24 institutional investors, including local mutual funds, insurance asset managers, bank wealth managers, private funds and selected international asset managers, representing more than CNY 40 trillion in asset under management. The CCEI aims to assist institutional investors in proactively communicating with investee companies and guiding them to transition to green, low-carbon and high-quality business, and to actively leverage the influence of their shareholders in order to promote the creation of long-term value for investee companies. Through collaborative participation, investors can widely integrate professional experience and technical resources in stewardship, more efficiently enhance the willingness, ability and effectiveness of Chinese enterprises to transition, and participate on a deeper level in the process of realising China's "dual-carbon" goal.
The first round of panel discussion focused on "Shareholder Engagement and Stewardship". It was moderated by Mr. Jonathan Qian, Secretary General of China SIF and Vice President of SynTao Green Finance. Ms. Valerie Kwan, Director of Engagement at AIGCC, first shared her view on the topic. She believes that the CCEI can help promote the low-carbon transition of enterprises. Ms. Katherine Han, Head of ESG Research & Investment at Harvest Fund Management, expects the CCEI to promote both engagement and stewardship of institutional investors. Ms. Su Yingying, Senior Client Portfolio Manager of the Investment Department at Invesco Great Wall, introduced Invesco Great Wall's specific practices in shareholder engagement and stewardship practices. Ms. Gao Zhenli, Director of the Department of Securities and Investor Relations, Securities Affairs Representative, China Longyuan Power Group and Ms. Willow Wu, Director of Investor Relations of China Mengniu Dairy Company Limited responded to the concerns of institutional investors about listed companies' efforts to address climate change from a corporate perspective and shared their companies' excellent practices in contributing to the dual-carbon goal.
In the Release Session, Mr. Raymond Zhang, CEO of SynTao Green Finance and Director of China SIF, released SynTao Green Finance's latest research result in the report "An Overview of China A-Share ESG Performance 2023". The report shows that the overall ESG performance of A-share listed companies has been steadily improving over the past year, but the improvement in the "quality" of ESG disclosure has lagged behind the improvement in the "quantity" of disclosure, and there are structural differences in the overall ESG performance among industries. Listed companies still face a high frequency of ESG risk controversies, but the trend is stabilising compared to the past three years. Meanwhile, the report found that for 80% of A-share industries, industry materiality issues have financial materiality, which has obvious transmission effects on share prices.
In the second keynote session, Dr. Wang Weihua, Chief Investment Officer of China Life Asset Management focused on the importance of engagement and stewardship management in the investment decision-making of institutional investors. Dr. Wang Weihua introduced China Life Asset's thinking and exploration on engagement and stewardship, as well as two policy recommendations, mainly from the perspective of insurance asset management institutions. He pointed out that investment institutions should take the initiative to positively impact their asset holdings through engagement and stewardship, improving the transparency of investee companies and effectively enhancing their sustainable development value while bringing long-term value returns. Regulators can gradually transition from voluntary and incentive mechanisms to mandatory ESG information disclosure and actively promote a clear regulatory framework. Regulators can also actively promote relevant professional organisations to conduct research on climate and transition risks, as well as introduce climate insurance and derivatives to hedge against potential climate risks.
Ms. Luo Nan, Head of China at Principles for Responsible Investment (PRI), delivered a keynote speech on how PRI is supporting stewardship practices, noting that PRI's work focuses on establishing an online collaborative platform for investors to collaborate on stewardship. Ms. Luo pointed out that PRI's stewardship work focuses on establishing an online cooperation platform for investors, supporting investors to collaborate on stewardship, supporting investors to use voting to make an impact, and addressing barriers to effective investor stewardship. In 2017, PRI and its partners launched the CA100+ project, which helps investors communicate with 171 listed companies worldwide that have the highest carbon emissions and urges them to transition. Five years into the programme, much progress has been made. PRI's stewardship work has now expanded from climate to social and environmental issues.
Mr. Yang Yuebin, Fund Manager of Equity Investment in AXA SPDB Asset Managers, believes it is fund managers' fiduciary responsibility to practice the organic combination of value investment and ESG. Value investment is pricing assets by judging the life cycle's discounted free cash flow, and higher risk corresponds to a higher return. During market turbulence, companies with abundant free cash flow can offer investors the opportunity of risk-return asymmetry. The ability to allocate free cash flow is partly a function of a company's governance, which, along with other factors, determines its intrinsic value. AXA SPDB Asset Managers has created a three-way mutual support and synergy mechanism of "ESG Investment Research + Fundamental Investment Research + Low-Carbon Transition Stewardship" to comprehensively judge the intrinsic value of companies and make more reasonable investment behaviours.
The second round of panel discussion focused on promoting orderly transition, and was moderated by Ms. Phoebe Zhao, Senior Researcher and Stewardship Project Manager at Greentech Innovation and Investment Gateway, Institute of Finance and Sustainability. The first panelist Mr. Chen Feng, Managing Director of Changjiang Pension, argued that asset managers should uphold the concept of ESG investment and adhere to the value proposition of long-term and steady development. Followed by Mr. Nicholas Zhu, Vice President and Senior Credit Officer of Moody's Investors Service, who shared about Moody's experience in helping investment institutions assess the performance of enterprises in low-carbon transition and analysed the path of orderly transition from the perspective of professional service institutions. Ms. Wang Xuan, Responsible Person for ESG & SD of Lenovo Group and Secretary General of ESG & Social Value Committee of Lenovo China Site, said that Lenovo Group has proposed the 2050 Net-Zero Goal to become the first high-tech manufacturing company in China to be verified by the SBTi Net-Zero Goal and to have its MSCI ESG rating upgraded to AAA grade by the end of 2022. Ms. Crystal Geng, Asia ESG Research Lead, BNP Paribas Asset Management, shared BNP Paribas Asset Management's achievements in ESG integration and stewardship. And finally, Mr. Wang Bo, Head of ESG Research, Research Department at Yinhua Fund Management, introduced the effective practice of Yinhua Fund in reaching the dual-carbon goal and promoting transition finance.
This year's Summer Summit was supported by Sina Finance, CCTV Network, the Economic Observer, Jiemian News, NetEase Finance and other media. It was broadcasted live through China SIF website, Wind 3C Conference, iFinD Terminal and WeChat video. The playback of the Summer Summit is available on China SIF website.
Please contact the organisers of China SIF for cooperation and information requests：email@example.com
About China SIF
China Sustainable Investment Forum (China SIF), established in Beijing as a non-profit organisation in 2012, is dedicated to promoting responsible investment and providing an internationalised platform for exchanging and sharing ideas on issues concerning sustainable development, with focus on facilitating Environmental, Social and Governance (ESG) integration, advocating green finance, and contributing to a responsible capital market in China as well as its sustainability.
As a member of the Global SIFs Network, China SIF organises Annual Conferences, Summer Summits, SIF Weeks and a series of featured seminars and webinars annually, convening policymakers as well as domestic and foreign experts to share their views, research, and good practice. Professionals and practitioners from research institutes, financial institutions, listed companies, government agencies, and media representatives have joined our discussion and endeavour to explore multiple ways to promote and practice responsible investment and green finance.
China SIF keeps launching a series of landmark research reports, such as China Sustainable Investment Review, supporting the Dissertation Competition on ESG and Sustainable Finance and developing the "ESG Online Classes" series of educational videos together with partners and industry experts to promote ESG investment concepts and practices. Over the years, China SIF has become one of the most influential responsible investment forums in the region.
Please visit https://en.chinasif.org/ for more information.