On 14 December 2022, the 10th China SIF Annual Conference was successfully held online. China SIF was launched by SynTao Green Finance in 2012, marking a decade of success. During these ten years, China SIF has witnessed the rapid development of ESG investment at home and abroad, with more and more financial markets incorporating ESG regulation and many financial institutions developing and launching ESG investment products.
The 10th China Sustainable Investment Forum (China SIF) Annual Conference, organised by SynTao Green Finance and co-hosted by the United Nations Environment Programme Finance Initiative (UNEP FI) and the United Nations Sustainable Stock Exchange Initiative (UN SSEi), was successfully held online. This year's Conference was supported by strategic partners Moody's, Harvest Fund and AXA SPDB Investment Managers. As the grand finale of the China SIF Week 2022, the 10th Annual China SIF Conference was themed "ESG Investing Comes of Age", looking back on the development of ESG from its emergence and rise to its gradual maturation into the mainstream over the past decade, and looking forward to the prospects, trends and key features of ESG investment in the next decade.
Raymond ZHANG, CEO of SynTao Green Finance and Director of China SIF, released the
China Sustainable Investment Review 2022, (hereinafter referred to as "the Review"), marking the fourth consecutive year the Review series has been released at the China SIF Annual Conference. Raymond explained that this Review series focuses on the four dimensions of ESG responsible investment in China, including policy progress, market size, market development and stakeholders' attitudes. In 2022, China's ESG responsible investment market continued to be on a fast track of development, with policies continuing to advance, market size rapidly increasing, institutional practices developing, and asset owners (AOs) and public acceptance increasing. The market will continue to grow at a rapid pace. To increase the accessibility of the Review, the project team has also launched an online interactive version of the Review.
The online version of the Review is available via the following links:
For access with your computer:
https://dataexplorer.syntaogf.com/china-sustainable-investment-review-2022
For access with your mobile devices:
http://dataexplorer.syntaogf.com/china-sustainable-investment-review-2022
The PDF version of the Review is available via the following links:
https://www.chinasif.org/products/csir2022
https://www.syntaogf.com/products/csir2022
Commenting on the report is
YU Hua, Director of China SIF and former Chairman of Morgan Stanley Huaxin Fund. He pointed out that this series of reports has maintained its consistent content integrity, continuity and consistency, and has provided complete coverage and comprehensive and detailed introduction to the various entities of the Chinese ESG investment market based on detailed data and standardised calibre.
Policy Progress: Five Directions, Accelerated Progress
The
China Sustainable Investment Review 2022 ("the Review") begins with a summary of policy developments over the past year. In the past year, China's green finance and ESG policies have contributed to the accelerated development of China's ESG investment market in the following five major directions: firstly, the standard system for ESG investment is being completed and accelerated; secondly, information disclosure is being steadily and continuously promoted; thirdly, incentive mechanisms have been adopted to promote the development of the market through a combination of measures; fourthly, ESG product innovation is blossoming; and finally, in international cooperation, more fruitful cooperation and exchanges have been achieved. Looking ahead, China's green finance and ESG policies will continue to maintain a strong top-down impetus.
Market Size: Significant Growth Rate, Uneven Structure
The Review provides year-on-year statistics on the overall size of the ESG responsible investment market in China. According to the available data, the overall size of China's ESG responsible investment market is growing rapidly, with the total market size exceeding CNY 24.6 trillion in 2022, representing an increase of nearly 80% compared to 2020. However, the overall market structure is still unevenly developed, with the market as a whole still dominated by the assets of bank credit represented by green credit, which has reached CNY 20.9 trillion in 2022, accounting for approximately over 80% of the overall market size. The size of sustainability bonds, ESG mutual funds and other sustainable securities is about CNY 3.07 trillion, and sustainable equities, represented by ESG private equity investments, is about CNY 0.6 trillion.
Market Development: Institutional Practice, Product Development
In order to comprehensively assess the level of responsible investment practices of China's asset management institutions, SynTao Green Finance has constructed the
Responsible Investment Capacity Evaluation (RICE) Database, which consists of six dimensions and more than 50 indicators, to comprehensively assess the development level and trend of investment institutions in ESG investment. The Review shows the evaluation results of China's mutual funds, insurance management and banking companies. Looking at the overall results, there is currently no asset management institution in China that has reached the global leading level (five spikes). Still, seven mutual funds are already at a good global level (four spikes), while most of the small and medium-sized institutions are still only at a low level (one spike). Regarding the types of institutions, the ESG investment practices of mutual fund companies are better developed than those of insurance and banking institutions.
The Review analyses the development of ESG investment products in China in terms of three representative product categories: ESG Indexes, ESG Funds and ESG Financial Products. Since the first Chinese ESG Index was launched in 2005, a total of 157 ESG Indexes have been released this year. Among them, the pace of new ESG Index products released in the past year has accelerated significantly. In terms of market performance, the ESG Index series of Syntao Green Finance, for example, has outperformed the index benchmark to a certain extent in the past few years, reflecting that ESG investment still has some back-testing validity in an emerging market like China.
The Review makes a critical determination of ESG mutual funds based on a careful analysis of the investment methodology published in mutual fund offerings. Since the first ESG mutual fund was released in 2005, there are 606 ESG mutual funds in the market by the end of 2022, with a total size of approximately CNY 500 billion. In the past three years, the number of ESG mutual funds has increased from 167 to 606, with a significant increase in growth rate. Although the market size of ESG mutual funds follows the macro market with certain fluctuations, it is still generally in the process of rapid development.
In terms of ESG financial products, by the end of June 2022, 134 ESG-themed financial products issued by 32 banks were available, with a balance of CNY 104.9 billion. ESG financial products are growing rapidly in size, but the ESG strategies applied are still slightly rudimentary. We expect to see more ESG investment approaches applied to financial products in the future.
Market Attitudes: AOs are Positive, Public is Accepting
The Review depicts the attitudes of major market participants towards ESG responsible investment in China in two dimensions, namely asset owners and individual investors. For asset owners, SynTao Green Finance, together with Southern Asset Management, conducted an innovative global survey on asset owners' attitudes towards ESG responsible investment in China this year, covering 51 asset owners of various types, with a total AUM of over USD 2.4 trillion, of which 60% were domestic institutions and 40% were foreign institutions. The survey found that global asset owners have a positive attitude towards ESG investment in China. The top three factors driving asset owners' investment decisions in China to incorporate ESG are, in order, regulatory requirements, fiduciary needs and investment risk avoidance. At the same time, a total of approximately 70% of asset managers include a degree of consideration of the asset manager's ESG capabilities when selecting an external asset manager.
For individual investors, SynTao Green Finance has collaborated with Sina Finance for the third consecutive year to conduct a survey on ESG investment. The survey found that the level of understanding and acceptance of ESG investment among individual investors has continued to increase over the past three years. For different groups of individual investors, the younger investors and high net worth individuals have a higher level of understanding and acceptance of ESG investment, which fully reflects the strong public base for the future development of the market.
Finally, Raymond gave an outlook on the ESG responsible investment market in China, saying that ESG investment will play a more important role in the current context of rising global uncertainty and will, to a certain extent, become a "certainty factor" in an "uncertain" macro environment". The ESG responsible investment market in China will continue to be on a stable and fast track of development.
Yu Hua then commented on the Review. Yu Hua suggested that the Review was published in an era of multiple challenges such as the Russian-Ukrainian war, inflation, energy crisis and global pandemic. Against this background, the Review nevertheless maintains the series' consistent integrity, continuity and consistency of content, providing complete coverage and comprehensive details of the various players in China's ESG responsible investment market based on detailed data and standardised calibres, as well as a clear grasp of domestic and international trends.
In addition, Yu Hua summarised two highlights from the Review. First, is the mapping of institutional investors and private investors in the Review, which reflects the confidence of the major asset providers in the market in ESG responsible investment in China and their grasp of the future development. Also, the results of the survey are particularly timely given the current complex circumstances. Secondly, it provides an ESG performance evaluation of asset management institutions and analyses the ESG management capabilities of investment managers. The work will further promote the investment management industry to improve its own ESG investment management capabilities, and also help the general investors' understanding of ESG investment and boost their confidence in related products.
The 10th China SIF Annual Conference and the 2022 China SIF Week 2022 is supported by media including Securities Times, Sina Finance and house.china.com.cn. Acknowledgements to: Responsible Investment Association of Australasia (RIAA), Caixin International, CDP, Ford Foundation (Beijing Office), International Finance Corporation, International Capital Markets Association (ICMA), Korea Sustainability Investing Forum (Kosif), Sustainable Banking and Finance Network (SBFN), Lianhe Equator, Norwegian Forum for Responsible Sustainable Investment (Norsif), Europe- based national Sustainable Investment Fora (EuroSIF), Cliumate Bonds Initiative (CBI), Global Sustainable Investment Alliance (GSIA), Sweden's Sustainable Investment Forum (SweSIF), SynTao Consulting, Shenzhen Finance Institute, Shenzhen Stock Exchange, CUEB China ESG Institute, CCM CSR Promotion Centre, iFinD, Wind Content Conference Community, Asia Investor Group on Climate Change (AIGCC), UK Partnering forAccelerate的ClimateTransitions（UK PACT), UK Sustainable Investment and Finance Association (UKSIF), and Yuze Charity for the contribution to 2022 China SIF Week.
Prior to the Annual Conference, 2022 China SIF Week has already hosted a series of 11 Side Events covering various aspects of responsible investment such as Sustainable Agriculture, Bond Markets for Sustainable Development, Net Zero Investment Trends in Asia and Asset Owners' Expectations on ESG Investment in China, Academic Workshop on ESG Practice and Investment Return, Training on Sustainable Blue Economy and Climate Change Management, TCFD Training for Listed Companies, Climate and Sustainability Disclosure in Stock Exchanges, Wealth Management for A Good Cause, China's Overseas Responsible Investments and ESG Information Disclosure for Enterprises, etc. In addition, we have contacted eight organisations from the Global SIFs Network to jointly look at the next decade of global responsible investment in a webinar format.
More than 2,000 professionals from around the world registered for the 10th China SIF Annual Conference and 2022 China SIF Week. 8,265 views were recorded on the day of the live broadcast through the China SIF website (chinasif.org), Wind 3C Conference, iFinD Terminal and WeChat video, with a total of 114,254 minutes of viewing time. The number of registrations and live streams watched reached a new record high. Click "Read More" to fill in the registration information and get the link to the playback of the 2022 China SIF Week events. Please contact the organisers for information on cooperation with China SIF and more at：
contact@syntaogf.com
About China SIF
China Sustainable Investment Forum (China SIF), established in Beijing as a non-profit organisation in 2012, was officially registered as a private non-enterprise unit in Shenzhen in 2016, the Jifeng Green Finance Promotion Center of Shenzhen City, is dedicated to promoting responsible investment and to provide 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.
Since the establishment, China SIF has held 10 Annual Conferences, 5 Summer Summits, 6 China SIF Weeks, and a series of featured seminars and webinars, 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, as well as representatives from media have joined our discussion and endeavor 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.
