On December 5, 2023, the 11th China SIF Annual Conference was successfully held in Beijing. The conference was hosted by SynTao Green Finance, with co-hosts from the United Nations Environment Programme Finance Initiative (UNEP FI) and the United Nations Sustainable Stock Exchanges Initiative (UN SSE). A number of experts from regulatory bodies, markets, and academia delivered speeches or participated in discussions at the conference. Over 300 representatives attended the event in person, and approximately 300,000 people watched the live-stream.
The theme of this year's China SIF Annual Conference is "ESG and High-Quality Development" The Chairman of China SIF and Chairman of SynTao Green Finance, Dr. GUO Peiyuan, hosted the conference. He elucidated the importance of this year's topic: On one hand, the development of ESG can promote high-quality development, establishing a positive and synergistic relationship between the two. On the other hand, ESG itself also requires high-quality development.
Eric USHER, Head of the United Nations Environment Programme Finance Initiative (UNEP FI), and WANG Zhongmin, Honorary Chairman of China SIF and former Vice Chairman of the National Council for Social Security Fund, delivered opening remarks. Eric sent his remarks from the COP28 in Dubai. He stated that COP28 has made significant progress, emphasizing the need for financial institutions to strengthen cooperation and promote sustainable development. UNEP FI is willing to collaborate with Chinese banks, insurance, and other financial institutions on issues such as climate change mitigation and adaptation, nature and biodiversity, and just transition.
WANG Zhongmin, under the theme of "From Entropy to Harmony", proposed advancing sustainable development through internalization, digitization, and marketization. Achieving symmetry between macro costs and benefits and promoting overall and individual synergy and unity is fundamental to advancing society from entropy to harmony.
The first round of keynote speeches focused on "ESG for High-Quality Development". TU Guangshao, Executive Director of Shanghai Advanced Institute of Finance (SAIF) at Shanghai Jiao Tong University and Chairman of Shanghai Finance Institute, mentioned that the high-quality and sustainable development of ESG can be gradually promoted in four ways: internalization of corporate ESG operational activities, standardization of corporate ESG disclosure reports, systematization of corporate ESG evaluation systems, and concretization of corporate ESG value realization. The high-quality and sustainable development of ESG can inject strong momentum and vitality into our entire economic and social development.
ZHU Guangyao, former Deputy Minister of Finance, highlighted the significance of China SIF coinciding with COP28. With certain countries advocating for nuclear energy development at COP28, he stressed the need for international coordination to address this major shift. He also emphasized the importance of proactive research and response, especially considering the substantial progress in renewable energy, to achieve carbon neutrality goals promptly.
LI Xiaowen, Secondary Inspector at the Policy Research Bureau of the National Financial Regulatory Administration (NFRA), highlighted that responsible investment is an inherent requirement for driving high-quality development in the financial industry. It serves as an effective approach to promote the high-quality development of financial markets. By fulfilling ESG responsibilities and ensuring information disclosure, financial institutions achieve a positive interaction between economic, social, and environmental benefits. Strengthening ESG management enhances their risk management capabilities, thereby improving the transparency and stability of the financial market. While China has initially formed a responsible investment ecosystem, collaborative efforts are still needed to optimize policies, refine standards, foster talent, and enhance international exchanges.
CAO Deyun, Executive Vice President and Secretary-General of the Insurance Asset Management Association of China (IAMAC), highlighted the positive strides made in recent years within the Chinese insurance industry regarding ESG-related policy formulation, the elevation of principles, investment practices, and international engagement. In the next phase, IAMAC aims to deepen industry understanding, advance ESG investment guidelines, enhance information disclosure and communication, and integrate internal and external resources. These efforts are geared towards supporting the development of ESG investments in insurance assets and collectively contributing to the establishment of a robust ESG ecosystem.
The first round of the panel discussion, moderated by Dr. GUO Peiyuan, focused on "Policy Dialogue". Representatives from the International Capital Market Association (ICMA), Ricco ZHANG, the Deputy Secretary-General of the China Development Research Foundation, YU Jiantuo, and the Commissioner of the Bangladesh Securities and Exchange Commission, Dr. Shaikh Shamsuddin AHMED, shared insights into the progress of ESG policies in the Asia-Pacific region, China, and Bangladesh, respectively.
Ricco ZHANG stated that the Asia-Pacific region has made significant progress in transitioning standards, climate-related disclosure, and anti-greenwashing efforts. He emphasized the need for genuine emission reduction goals rather than merely achieving carbon neutrality through carbon offsetting. Ricco also highlighted the importance of implementing financial transition at the institutional level, not just at the project level.
YU Jiantuo noted that various Chinese ministries have recently introduced ESG-related policies and measures, such as the ESG information disclosure guidelines research by the State-owned Assets Supervision and Administration Commission (SASAC). He advocated for considering the overarching policy framework for ESG, enhancing ministerial coordination, in order to drive ESG to better serve high-quality development.
Dr. Shaikh Shamsuddin AHMED emphasized the strong emphasis of Bangladeshi regulatory authorities on ESG. They are actively studying and expect to soon release ESG guidelines, strengthen climate disclosure policies, and establish a climate adaptation fund. He highlighted the importance of raising awareness and building capacity for ESG in Bangladesh.
In the first report release session, Raymond ZHANG, CEO of SynTao Green Finance and Director of China SIF, unveiled the "China Sustainable Investment Review 2023". This marks the fifth consecutive year that the series of reports has been released at the China SIF Annual Conference. Raymond explained that the report comprehensively analyzes the market situation from four major dimensions: policy progress in ESG investment in China, market scale, market development, and the attitudes of relevant stakeholders.
In summarizing the 2023 outlook for China's ESG responsible investment market, Raymond highlighted key developmental trends, including the sustained, orderly progression of policies, continuous growth in market scale, deeper institutional investment practices with increased complexity, improvement in asset owners' responsible management, and the internalization of public investment values. He emphasized that the development of China's ESG market needs to transition from quantity accumulation to qualitative improvement.
In the second round of keynote speeches, which focused on promoting the high-quality development of ESG, WANG Yida, Chairman of the Supervisory Board of the National Green Development Fund, emphasized the essential role of green finance in resource allocation, price discovery, and climate risk management for green and low-carbon development. He highlighted that green investments should return to the essence of value investment. Through refining systems, long-term incentives, and constraint mechanisms, the professionalism of ESG investments can be enhanced. Investments in green equities and equity classes can channel capital into the extensive and long-term areas of green and low-carbon sectors. This, in turn, encourages investment institutions to strengthen their layout and investment in green and low-carbon technological innovations and commercial applications. The ultimate goal is to achieve a unified value investment that combines ecological benefits, social benefits, and economic benefits.
Puleng NDJWILI-POTELE, Co-Head of Banking at the United Nations Environment Programme Finance Initiative (UNEP FI), highlighted that the Principles for Responsible Banking (PRB) signatory banks represent 54% of the global banking industry's total assets. China, being a significant partner of UNEP FI, has 25 signatory banks to the PRB. She acknowledged the alignment of Chinese banks, with important strategic areas such as green finance, rural revitalization, and common prosperity, reflecting consistency with sustainable development goals. The progress in corporate governance by Chinese banks was also recognized.
Kris NATHANAIL, Chief of Staff at the International Organization of Securities Commissions (IOSCO), mentioned that "It is an honor to participate at the China SIF annual conference, a tradition for us at IOSCO nowadays and one that we meet with great pleasure. IOSCO endorsed the ISSB Standards in July 2023, calling on jurisdictions to implement, apply or be informed by these Standards. The time is now to implementation and jurisdictions will face their own set of challenges in implementing those Standards. IOSCO has called on the ISSB to develop adoption guidance to assist jurisdictions in these endeavours and will implement a capacity building programme to assist its members in their journey."
In the second round of panel discussion focusing on "Promoting the High-Quality Development in ESG" hosted by Jonathan Qian, Secretary General of China SIF and Vice President of SynTao Green Finance, several key insights were shared by participants: LIU Wei, Deputy General Manager of China Securities Index (CSI), highlighted the flourishing development of ESG indices and indexed investments as sustainable investment principles become a global consensus. The global count of ESG indices has exceeded 50,000, and CSI has established a comprehensive ESG index system. Looking forward, efforts will be directed at promoting and guiding the ESG philosophy, expanding ESG-indexed investments, and jointly constructing a positive development ecosystem for ESG-indexed investments. HAN Ning, Director of the Market Innovation Department of the National Association of Financial Market Institutional Investors (NAFMII) noted that China has become the world's second-largest green bond market. Green debt financing instruments registered with the association have cumulatively issued nearly CNY 10 trillion, leading the market in corporate credit green bonds. Sustainable financial products related to environmental (E) aspects continue to innovate, with expectations for more innovative products in the social (S) and governance (G) aspects to meet diversified market financing demands. QI Yue, Deputy Director of the International Cooperation Research Department at the Research Center of the State-owned Assets Supervision and Administration Commission (SASAC) highlighted SASAC's active role in supporting ESG capacity building for central enterprises (SOEs). They have released a series of achievements, including the "Research on the Compilation of Special Reports on ESG of Central Enterprises' Listed Companies". Currently, 86.8% of centrally controlled listed companies have disclosed ESG-related reports. The next step for the research center involves initiating comprehensive studies on corporate social value to more fully support the high-quality ESG development of central enterprises.
SHI Bo, Deputy General Manager of Southern Asset Management, believes that integrating ESG investments requires combining financial data with a company's ESG performance. However, since ESG data is not yet fully standardized, and market incentive mechanisms need improvement, collaboration from all parties is still needed to promote the widespread adoption of ESG principles. John WANG, Vice President and Senior Analyst at Moody's Investors Service, stated that incorporating ESG factors into credit ratings requires attention to industry characteristics and a clear distinction between ESG risk exposure and the impact of ESG on the creditworthiness of entities being evaluated. In practice, some companies may see their ratings affected due to poor ESG performance. Additionally, capital markets are placing increasingly stringent requirements on high-carbon-emitting companies, which will be reflected in bond issuance conditions and pricing. Therefore, companies introducing credible ESG practices will be better equipped to manage transitional risks. Dr. Roman NOVOZHILOV, Head of ESG at the New Development Bank (NDB), shared the three-pillar framework adopted by the NDB for integrating ESG. This framework includes ESG assessments during the project approval phase, monitoring during project implementation, and the issuance of green bonds to promote sustainable investments. In addition to ESG frameworks, internal communication and employee education are crucial for the ESG performance of financial institutions.
In the second report release session, Professor & Dean at the School of Public Policy and Management at Tsinghua University and Executive Dean of the Institute for Sustainable Development Goals at Tsinghua University, ZHU Xufeng, presented the "Research on the ESG Rating System of Provincial and Municipal Governments (2023)." This research, supported by SynTao Green Finance and Moody's, involved ESG ratings across three dimensions for 72 cities and 30 provinces/autonomous regions. The findings revealed an overall improvement in the ESG average level among the 72 cities, but with significant regional variations. Most provinces received ESG ratings concentrated in the A and BBB categories. Prof. ZHU Xufeng recommended the continued promotion of research and practical application of ESG ratings for local governments. He encouraged diverse stakeholders to participate in enhancing China's ESG ecosystem.
Subsequently, Dr. AN Guojun, Vice Chairman China SIF and Deputy Secretary-General of the Green Finance Committee of the China Society of Finance, provided a written summary of the morning session. She emphasized that achieving the "dual-carbon goals" requires promoting the coordinated development of green finance, responsible investment, ESG, and sustainable finance. This involves creating a well-functioning and interactive ecosystem within the financial market. Dr. An Guojun also noted that there is considerable room for improvement in China's ESG indicator construction, information disclosure, product innovation, and other aspects.
In the afternoon, parallel forums were held on topics such as "ESG Investment Strategies for Equity Investments," "ESG Investment Strategies In Fixed Income," "Dialogue between Financial Institutions and Companies for Transition," and "Disclosure and High-Quality Development".
The Parallel Forum on "ESG Investment Strategies for Equity Investments" was moderated by Raymond ZHANG, CEO of SynTao Green Finance and borad member of China SIF.
YU Jin, Director of International Business Department at the AXA SPDB Investment Managers, introduced the ESG investment practices of AXA SPDB Investment Managers: from establishing the ESG analysis framework and combining ESG research with fundamental investment to issuing several ESG-themed funds and joining the relevant domestic and international responsible investment organisations. AXA SPDB Asset Managers has been moving forward and exploring ESG investment practices for many years.
Kiran AZIZ, Head of Responsible Investment at the Norwegian Pension Fund KLP, says that "For us as a long-term investor the most important question is what are the long-term drivers for value creation for your company. This perspective moves ESG from a compliance exercise - a set of boxes to be ticked - to a value creation tool."
WANG Qiwei, ESG Equity Investment Manager at China Merchants Fund; Charles NGUYEN, Managing Director and Head of ESG Asia at Neuberger Berman; Prof. ZHANG Bohui, Executive Dean of School of Management and Economics and Presidential Chair Professor of Finance at The Chinese University of Hong Kong, Shenzhen; Egbert YIN, Senior Director of Product at Chinascope (Shanghai) Technology; and Gayle CHEN, ESG Analyst for MTX at Vontobel Asset Management, engaged in an active discussion of theoretical development and practice of ESG strategies in equity investment.
The Parallel Forum on "ESG Investment Strategies In Fixed Income" was moderated by Grace GUAN, Head of Amundi Responsible Investment China at Amundi Asset Management and board member of China SIF. In her keynote speech, Grace introduced that as the largest asset management company in Europe, Amundi has been deeply committed to responsible investment and has established a professional ESG team and a perfect ESG investment system. In terms of investment in sustainable bonds, Amundi carries out pre-investment assessment and post-investment stewardship of bond-issuing entities and bonds through the GSS team. Grace believes that transition bonds will be an important direction for sustainable bond investment in the future.
According to Jonathan QIAN, Secretary General of China SIF and Vice President of SynTao Green Finance, there are challenges and much room for improvement in ESG integration in fixed income investment. Jonathan shared some of the achievements of SynTao Green Finance's cooperation with investment institutions and academic units, including how to overcome data insufficiency when evaluating the ESG performance of bond issuers, as well as how to apply ESG evaluations to credit analyses and investment strategies.
Rex ZHAO, General Manager of Fixed Income Investment Department and Head of ESG Investment at Allianz Insurance Asset Management Company, DENG Wenshuo, Deputy General Manager of ESG Business Department of Huaxia Wealth Management, GUO Yijin, Sustainable Investment Analyst at Manulife Investment Management, and Dr. Stan HO, Visiting Professor at the School of Economics and Management of the University of Hong Kong, discussed and shared their views on ESG rating methodology in the bond market, and the rating status of China's bond issuers.
The Parallel Forum on "Dialogue Between Financial Institutions and Companies for Transition" was moderated by Phoebe ZHAO, Stewardship Project Lead at the Institute of Finance and Sustainability.
Benjamin MCCARRON, Founder and Managing Director of Asia Research and Engagement (ARE), was invited to give a speech about how financial institutions can use constructive dialogue to accelerate corporate decision-making in line with dual carbon targets. He emphasized that investors and banks must catalyze urgent and transformative action to address climate change, enhancing dialogue and sharing views between companies and financial institutions can add tangible value to responsible investment.
WONG Dan Chi, Head of ESG Advisory and Integration, APAC, at Schroders Investment Management, said the Corporate Climate Risk Commitment aims to protect the underlying investments and optimize investment returns for clients. Schroders, as a founding signatory to the Net Zero Asset Managers Initiative and the largest asset manager to have proposed the SBTi Commitment, is committed to aligning with and validating the 1.5-degree temperature rise set out in the Paris Agreement in 2040. Finally, Schroders is already making climate risk stewardship management a top priority, with tools to manage progress in real-time.
RAO Shuling, Deputy Secretary-General of the Beijing Green Finance Association and Senior Researcher at the Institute of Finance and Sustainability, along with Alexander CHAN, Head of ESG Client Strategies, Asia Pacific, Invesco, WEI Yixi, Chief Analyst of ESG, E Fund Management, and Prof. CT LOW, Geospatial Risk Lead at China Water Risk (CWR), engaged in in-depth discussions on how institutional investors can communicate with invested companies and promote low-carbon transition within enterprises. The focus was on exploring effective strategies for fostering dialogue and facilitating the transition to a low-carbon economy.
The Parallel Forum on "Disclosure and High-Quality Development" was moderated by Selina XU, board member of China SIF, SVP of CE, and Secretary General of CE Foundation.
Harold PAUWELS, Standards Manager at the Global Reporting Initiative (GRI), shared updates during the conference. Harold mentioned that "Many stock exchanges, regulators and investors around the world reference or require use of the GRI Standards for sustainability (or ESG) reporting by listed companies. Resilient and responsible markets begin with transparency about the impact of organizations on the environment, on people including human rights and just transition impacts. The new climate change and Energy GRI standards are the blueprint for climate change reporting including disclosures to report on the organization impact related to Just transition, transition plans, removals and carbon credits. GRI brings investors, stock exchanges, and capital market regulators in dialogue with reporting organizations to support the knowledge and use of sustainability impact reporting and help lay the groundwork for resilient markets and the next generation of global sustainable finance."
During the keynote speech session, WANG Xin, CEO of SynTao Consulting, discussed how companies can improve sustainable information disclosure in the ESG era. He analyzed ESG report statistics for A-share and H-share listed companies, noting an increase in the quantity and quality of ESG reports. Climate information disclosure is gradually becoming more prevalent. He suggested that listed companies make good use of the transition period for the new ISSB guidelines, actively explore, proceed within their capabilities, and gradually advance.
DONG Shanning, Deputy General Manager of the Green Finance Department and the Corporate Finance Department at the Bank of Jiangsu, pointed out that the main driver for commercial banks in China to engage in ESG information disclosure still comes from regulatory requirements. Among the 21 commercial banks directly managed by the People's Bank of China, 17 have published ESG reports. However, this is only a small part compared to the total number of banks nationwide. Regarding the disclosure of climate-related information, commercial banks face challenges related to the accessibility and reliability of carbon emission data, as well as the lack of alignment of climate scenarios with international standards.
Prof. LIU Xuexin, Executive Dean of the China ESG Institute at the Capital University of Economics and Business (CUEB), LIU Yanfeng, Director of Corporate Governance at the China Association for Public Companies (CAPCO), ZHU Ling, Country Lead of Capital Markets at CDP China, SHOU Rufeng, Member of the Party Committee and Vice President of China Power International Development, Tanya XU, Lead ESG Analyst at Sumitomo Mitsui DS Asset Management and CHEN Shuyun, ESG Analyst at BNP Paribas ABC Wealth Management, shared the latest developments in domestic and international ESG information disclosure standards, including the new guidelines from ISSB.
We would like to thank our strategic partners Moody's, AXA SPDB Investment Managers, Southern Asset Management, and partners CDP, Asia Research and Engagement (ARE) for their support of the 11th China SIF Annual Conference. The media support institutions include Sina Finance, Caijing Magazine, Economic Observer, CCTV.com, Jiemian News, Netease Finance, Caixin Global, Wallstreetcn.com, EqualOcean, qeubee live, Wind 3C Conference, iFinD. China SIF received support from the Green and Low-Carbon Publicity Committee of CFEJ, Climate Bonds Initiative (CBI), Ask Health, Sustainable Banking and Finance Network (SBFN), Bank of Beijing, Institute of Finance and Sustainability (IFS), Asia Venture Philanthropy Network (AVPN), Asia Investor Group on Climate Change (AIGCC), Natural Resource Defense Council (NRDC), Corporate Social Value Lab, Yuze Charity, British Embassy Beijing, European Federation of Financial Analysts Societies (EFFAS), CCM CSR Promotion Centre, School of Management and Economics, the Chinese University of Hong Kong, Shenzhen, CUEB China ESG Institute, SynTao, Shenzhen Finance Institute, Green Startups, New Development Bank (NDB), Ford Foundation (Beijing Office), Impact Hub Shanghai, Sustainable Finance Research Hub (SFRH), etc. We extend our heartfelt thanks for their support.
The 11th China SIF Annual Conference serves as the flagship event of the 2023 China SIF Week. Additionally, China SIF Week comprises 12 events, encompassing a wide range of topics. as CESGA training, ESG media training workshop, ESG academic seminars, sustainable stock exchange roundtable, overseas responsible investment and ESG disclosure on mining sector, net-zero transition for financial institutions, sustainable investment roundtable, ESG talent incubation webinar, and more. Furthermore, China SIF Week also organized working meetings for domestic and international organizations such as CCEI, AIGCC, PRBc
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.
