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1、Shenzhen Finance Institute,The Chinese University of Hong Kong,Shenzhenand Huaxia Wealth Management Co.,Ltd.Annual Report on ESG Investing in Chinas Asset Management Industry 2022EDITORIAL BOARD MEMBERSEDITORS-IN-CHIEFEDITORIAL BOARDEXECUTIVE EDITOREDITORIAL MEMBERSYuan ZhihongXia BinWang Wenxu Li X
2、iao Wang HankuiQin DanXiong WanfangJiang PingpingYang WenhaoZhang BohuiHuman society is experiencing the double impact of changes unseen for centuries and a severe pandemic.Complicated and changeable externalities,such as frequent extreme climate events,fluxional financial markets,and an intensified
3、 energy crisis pose severe challenges to global economic recovery.In this context,all sectors of the world must assume the mission of creating opportunities during this crisis and turn a new page.The just concluded 27th United Nations Climate Change Conference reached a resolution to establish the L
4、oss and Damage Fund to help developing countries bear the immediate costs of climate-induced events.The report to the 20th National Congress of the CPC also put forward new requirements for green and low-carbon development and actively yet prudently promoting carbon peaking and carbon neutrality.The
5、 financial industry plays an important role in addressing climate change and promoting low-carbon transition.As an important pillar of sustainable finance development,ESG emphasizes the coordinated development of the economy,environment,and society,which coincides with the policy principle of high-q
6、uality development and green development in China.With the global popularization of ESG,investment practices continuously improve,and funds grow in scale.ESG investing has gradually become mainstream.According to a review article on ESG published by Atz,Van Holt,Liu and Bruno in 2022,the number of r
7、esearch paper on ESG has increased dramatically since 2015,indicating that ESG research is also developing rapidly in the academic world.Despite the current dispute about whether ESG investing improves earnings,there is a consensus that ESG demonstrated favorable abilities to withstand downside risk
8、s during a socio-economic crisis.As the national strategy,regulatory direction,industry consensus,and customer demand gradually become clearer,this report was prepared to jointly promote the development of ESG investing in China and to explore new opportunities in global ESG investing.It focuses EXE
9、CUTIVESUMMARYon global ESG standards and disclosure practices,and pays attention to the development of sustainable investment and financing.Through the research on domestic ESG data and the empirical analysis of global ESG rating systems,we conducted a questionnaire survey on ESG investing in Chinas
10、 asset management industry and an in-depth analysis of ESG disclosure.We hope this report encourages actors of the asset management industry to practice ESG investing,promote the establishment and improvement of ESG standards and rating systems,and strengthen corporate information disclosure,thus co
11、ntributing to Chinas green and low-carbon transition,and sustainable and high-quality development.As an ancient Chinese saying goes,good principles should adapt to changing times to remain relevant.Only the judgment and choice suited to the needs of the times are correct.ESG conforms to the law of C
12、hinas economic development and to top-level policy design directions.With historical opportunities in this new era,ESG will play a positive role and receive significant long-term attention.Here,wed like to express our gratitude to institutions involved in the survey of this report for their support
13、and cooperation.Furthermore,wed like to acknowledge the hard work of all the experts and researchers on the Editorial Board!Zhang BohuiNovember 2022 in ShenzhenIn 2022,global sustainable development has faced more serious challenges.Extreme weather events,notably drought,flood and summer heat,have b
14、rought serious threats to ecological environment,social order,and peoples lives and health.The transmission of COVID-19 variants and geopolitical conflicts have intensified the risk of a global economic recession,and changes in the world energy supply have affected global investment for climate chan
15、ge to some extent.Environmental,Social and Governance(ESG)investing has also been questioned,regarding the authenticity of the investment scale,differences in the evaluation methods,and short-term conflicts between the practice and real world social issues.Meanwhile,challenges are accompanied by new
16、 opportunities for global sustainable development.First,despite the pressure of energy security and economic recovery this year,countries still honor their commitments under the Paris Agreement,and the trend of global low-carbon transitions remains unchanged.Secondly,there has been substantial progr
17、ess in the global convergence of sustainability disclosure standards,highlighting the importance of climate issues.In addition,progress has been made by the worlds major economies on common taxonomy of green economic activities,transition finance frameworks,data processing of ESG financial products,
18、and development of carbon markets.The challenges of sustainable development and the deficiencies in ESG investment are continuously improved and solved.On October 27,the Ministry of Ecology and Environment of the Peoples Republic of China issued the 2022 Annual Report on Chinas Climate Change Polici
19、es and Actions.Guided by the spirit of the 20th National Congress of the CPC,China has implemented a national strategy to actively address climate change,and has incorporated carbon peak and carbon neutrality into the overall layout for ecological civilization construction and the countrys overall e
20、conomic EXECUTIVESUMMARYand social development.This strategy shows the world Chinas responsibility to build a community with a shared future for mankind.The report to the 20th National Congress of the CPC made an important claim about the Chinese path to modernization.Under the essential requirement
21、s of high-quality development,common prosperity,and harmony between humanity and nature,ESG has become an important tool to promote the sustainable development of the country.For businesses,ESG provides effective practice direction and measurement for high-quality development.Driven by relevant nati
22、onal policies,businesses gradually integrate ESG into their daily operations and establish modern enterprise systems in line with international standards by continuously exploring Chinese governance models.For investors,with the continuous expansion of ESG assets under management and the gradual inc
23、rease of the effectiveness of ESG topics in evaluating enterprise competitiveness,businesses with better ESG performances have stronger competitive advantages in the high-quality development stage of the national economy.Overall,China will use ESG as a link between the financial system and the real
24、economy.This year,this report will continue to present the latest progress and development trends of ESG investment in Chinas asset management industry.Thank you for your support and cooperation in writing this report!Thanks to the experts and researchers on the Editorial Board for their hard work!Y
25、uan ZhihongNovember 2022 in BeijingI.ESG Investment Disclosure Practice1.1 Disclosure practices of foreign asset managers1.1.1 Europe 1.1.2 USA1.1.3 Canada1.1.4 Australia1.1.5 Japan1.2 Disclosure practices of Chinese asset managers 1.2.1 Mainland China1.2.2 Hong Kong1.3 Disclosure recommendations fo
26、r asset managersII.Development of ESG Investing2.1 Development of international ESG investing2.1.1 UN PRI signatories2.1.2 Global ESG Fund2.2 Development of domestic ESG investment2.2.1 Domestic ESG public funds2.2.2 Domestic core ESG public funds2.2.3 Domestic ESG indexes2.2.4 Domestic ESG bank wea
27、lth management products2.2.5 ESG-related research of domestic securities companiesIII.ESG Data and Weight Design 3.1 ESG underlying data classification 3.1.1 Environmental(E)dimension3.1.2 Social(S)dimension3.1.3 Governance(G)dimension023234343739CONTENTS3.2 Comparat
28、ive research on weight design of ESG rating indicators3.2.1 Research topic 3.2.2 Research approach3.2.3 Research content3.2.4 Conclusions and discussionIV.Empirical Research on ESG Rating4.1 Corporate ESG rating correlation and empirical analysis4.1.1 Overview and correlation of ESG ratings of compa
29、nies4.1.2 Empirical analysis of ESG ratings and stock yield4.1.3 Empirical analysis of ESG ratings and stock price volatility4.1.4 Empirical analysis of ESG primary indicators and stock yield4.1.5 Empirical analysis of ESG primary indicators and stock price volatility4.2 Fund ESG rating correlation
30、and empirical analysis4.2.1 ESG rating methodology and correlation of funds4.2.2 Empirical analysis of ESG rating at fund levelV.Survey on ESG Investing in the Chinese Asset Management Industry5.1 Institutional questionnaire5.1.1 Opinions and understanding5.1.2 Organizational structure and external
31、resources5.1.3 Strategy and analysis system 5.1.4 Product issuance and performance5.1.5 Challenges and directions for improvement5.2 Product questionnaire5.2.1 Client portrait and staffing5.2.2 ESG strategies and rating systems5.2.3 Emphasis on ESG and excess returnsAppendicesI.Questionnaire design
32、methodologyII.Questionnaire distribution and collection References 404045459677778085878890909I.ESG Investment Disclosure in PracticeESG Investment Disclosure PracticeAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|2ESG investment disclosure r
33、efers to the process by which an asset management institution reports information to users about its ESG investment methods and practices within a given timeframe.On the one hand,there is increasing demand from clients and stakeholders for information related to sustainable development from asset ma
34、nagers.On the other hand,disclosure is an important way for the latter to demonstrate its fudiciary duty to clients and other stakeholders,improve credibility,and guide investors in decision-making.However,there is no unified international ESG investment disclosure framework.This section attempts to
35、 provide relevant disclosure suggestions for Chinese asset managers by sorting out the disclosure practices of asset managers in Europe,North America,Canada,Australia,Japan,Mainland China,and Hong Kong.The main findings and conclusions are as follows:The emphases of domestic and foreign ESG investme
36、nt and disclosure differ.Foreign institutions focus mainly on net zero,racial and gender equality,and labor rights.Biodiversity has also been given increasing attention where some asset managers include it as their primary focus for shareholder engagement.Domestic institutions focus on common prospe
37、rity,rural revitalization,party construction,and other issues more suited to Chinas national conditions.Despite these differences,both domestic and overseas institutions align with the United Nations Sustainable Development Goals(SDG)to achieve SDG through ESG investment performance.All regions have
38、 strengthened the importance of climate change-related disclosures.Climate change is one of the material issues addressed by almost all asset managers.Some institutions have now publicly supported the Task Force on Climate-Related Financial Disclosure(TCFD)and disclosed climate-related information f
39、ollowing TCFD recommendations.Most of them prepare a seperate TCFD report,some of them address climate-related information in social responsibility reports,and a few of them disclose with their parent company.Only a few institutions carry out third-party assurance of ESG investment process and data
40、on Scope 1,2,and 3 emissions.As required by regulators in the UK,the United States,Canada,Australia,and China,TCFD serve as the primary framework for climate-related disclosure,and TCFD report is the primary form of disclosure globally.In terms of content,a complete ESG investment disclosure include
41、s but is not limited to investment outcomes.Leading disclosure practices distinguish two types of disclosed content:ESG investing methodology and practice.According to the definition and process of ESG investing,methodology covers policies and guidelines such as responsible investment policy,steward
42、ship policy,and environment policy.Practice covers information such as investment outcomes,lists and details of shareholder engagement,voting history.The difference in disclosure quality involves the amount and frequency of disclosure.Meanwhile,public funds will emphasize on stewadship performance i
43、n their disclosures compared with other asset managers.In terms of form,an independently prepared ESG investment report is the main form of presentation.Through their official websites,asset managers in Europe and America present ESG investment methods and results in a Responsible Investment Report
44、or a Stewardship Report,and their target readers are investment practitioners and clients.In addition,leading institutions also publish their ESG investment-ESG Investment Disclosure PracticeAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|3related policies on their official w
45、ebsites as separate documents.Other forms of disclosure include sustainability report or social responsibility report,with additional content covering the companys own ESG operations.At present,standards from the Sustainability Accounting Standards Board(SASB)and the Global Reporting Initiative(GRI)
46、are commonly used.In terms of frequency,ESG investment information is disclosed at least once a year.Best practices show that ESG investment policies are usually revised annually after publication,and dedicated reports are updated quarterly.The best practice of proxy voting disclosure is published a
47、s an online inquiry system the day after the vote.Institutions with higher disclosure frequencies can present more timely and transparent ESG investment information.Currently,asset managers in Europe have the best disclosure quality.In the context of mature development of ESG investment and mandator
48、y regulatory requirements,sustainable development plays an important role in the missions of most European institutions,along with more comprehensive disclosures.Even though European asset managers generally publish proxy voting records,only a few now disclose the logical basis behind their votes.In
49、 China,ESG investing is still in the development phase.The relevant regulatory requirements currently undergo gradual standardization,and the awareness of ESG disclosure also gradually forms in asset management institutions.This report suggests that public disclosure should start with ESG investment
50、 policies in the form of dedicated reports during the investment.1.1 Disclosure practices of foreign assetmanagers Based on Investment&Pensions Europes 2022 List of Top Asset Managers by assets under management and ranking of leading ESG Investors from Morningstar and ShareAction,we selected 15 Euro
51、pean,15 American,3 Canadian,3 Australian,and 3 Japanese institutions as sample.Table 1 Foreign Asset Manager Research SampleRegion Institution Europe Affirmative Investment Management,Impax Asset Management,Robeco,Stewart Investors,Amundi Asset Management,BNP Paribas Asset Management,HSBC Global Ass
52、et Management,Jupiter Asset Management,Legal&General Investment Management,Schroders,AXA Investment Managers,Comgest,NN Investment Partners,APG Asset Management,Aegon Asset Management USA Calvert,Parnassus,Federated Hermes,Nuveen Asset Management,AllianceBernstein,Wellington Management Company,Black
53、Rock,Invesco,State Street Global Advisors,Capital Group,J.P.Morgan Asset Management,BNY Mellon,Vanguard Group,Fidelity International,Goldman Sachs Canada BMO Global Asset Management,Manulife Investment Management,RBC Global Asset Management Australia Australian Ethical,Altius Investment Management,M
54、acquarie Asset ManagementJapan Asset Management One,Nomura Asset Management,Nikko Asset Management ESG Investment Disclosure PracticeAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|41.1.1 Europe Europe has had ESG investing practices for a long time,and has sound policies to
55、improve asset managers disclosure quality.Recently issued relevant policies include the Shareholder Rights Directive II(2017 Revision),which stipulates disclosure requirements for engagement policies and implementation,and the Sustainable Finance Disclosure Regulation(SFDR),which became effective in
56、 March 2021 and required all asset managers to disclose ESG considerations in their investment decisions.In terms of environmental information disclosure,since April 2022,the UK become the first G20 country to pass laws that require asset managers to disclose environmental information in line with T
57、CFD recommendations.Under strict regulations,the overall disclosure depth and scope of European institutions are higher.Among this chapters sample institutions,statistics show that most institutions disclose information through dedicated reports,such as stewardship reports.The importance of climate
58、change increased:12 institutions disclosed climate information in line with TCFD recommendations,half of that information was presented in social responsibility reports or sustainability reports.10 institutions disclosed voting policies or guidelines and voting results to the public,5 of them provid
59、ed detailed explanations of their voting rationale,and only one disclosed its voting information the day after the vote,others disclose their voting information annually.While focusing on climate change,some asset mangers also address policies and solutions regarding biodiversity.As GRI suggests,cli
60、mate is a multi-dimensional topic that requires to be addressed with issues such as human rights and biodiversity.Among best practices,Robeco published a 100-page Sustainability Report that is divided into six sections and have obtained third-party assurance:company presentation,annual overview(resu
61、lts,financial information,and material analysis),approach to sustainability(strategies,governance,risk management,SFDR compliance),active ownership(stewardship,voting,engagement,and negative screening),sustainable investment focus topics(climate,biodiversity,human rights,and SDG),and sustainable bus
62、iness operation.Among other things,its TCFD disclosure is conducted as a cross-reference to indicate its location in other policy documents.Table 2 Public Disclosures of ESG Investing of Some Asset Managers in EuropeRobeco BNP Paribas Asset Legal&General InvestmentManagement Primary asset class unde
63、r managementListed equity Listed equity Fixed income ESGinvestment RelevantpoliciesSustainability policy,sustainable risk policy,and exclusion policies ESG integration guidelines,Global sustainability strategy,industry policies Global corporate governance andresponsible invesment principles,sustaina
64、ble development policies Negative screening ESG integration Thematic investment ESG Investment Disclosure PracticeAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|5Note:Data collated as of June 30,2022 Source:Public informationRobeco BNP Paribas Asset Legal&General InvestmentM
65、anagement StewardshipRelevant policies Stewardship policies,voting policies,and engagement policies Stewardship policies,governance and voting policies-Proxy votingrecords Next day Annually Monthly Voting detailsOnly for votes against-Only for votes againstEngagement Response to climate change Relev
66、ant policies2050 net zero roadmap Biodiversity roadmap Climate change policy,biodiversity policy Environmental information reports Based on TCFD recommendations in annual sustainability report -TCFD report(including assurance on Scope 1,2,and 3 emissions)Form of disclosureDedicated reports Annual st
67、ewardship report,quarterly active ownership reportAnnual stewardship report,annual voting report,semi-annual social responsibility reportQuarterly ESG impact report,monthly voting report,and annul active ownership reportComprehensive reports Annual sustainability report Annual sustainability reportS
68、ocial responsibility report Table 2 Public Disclosures of ESG Investing of Some Asset Managers in Europe(continued)1.1.2 USAThe United States Securities and Exchange Commission(SEC)issued its proposed climate-related disclosure policy in March 2022,requiring companies to disclose climate-related ris
69、k governance information in line with TCFD recommendations in their registration reports and periodic reports.Meanwhile in August 2022,the American government passed the largest climate investment act in its history,indicating a future climate-centered ESG-related disclosure trends.The disclosure qu
70、ality of the 15 American asset managers in this study sample differed,and the disclosure scope was not related to their assets under management(AUM).Compared with European institutions,fewer American institutions disclosure policies and overview reports.Only 5 institutions disclosed relevant policie
71、s about ESG investing methods,nine institutions disclosed proxy voting policies,and 3 institutions mentioned ESG investing in their sustainability reports or social responsibility reports.On the topic of climate,11 institutions disclosed dedicated climate reports or TCFD reports based on TCFD reocmm
72、endations,3 of which published their first report in 2022,and only BlackRock assured its carbon emissions data by a third party.It is worth mentioning that Nuveen Asset Management disclosed their proxy voting rationale for more than 300 S&P 500 companies of which it has shares to strengthen transpar
73、ency.It included company names,industries,meeting dates,resolutions,categories of shareholder resolutions,management voting recommendations,voting instructions,voting principles,and reasons for voting.ESG Investment Disclosure PracticeAnnual Report on ESG Investing in Chinas Asset Management Industr
74、y 2022|6Table 3 Public Disclosures of ESG Investing of Some Asset Managers in the United StatesBlackRock Nuveen Asset Management State Street Global Advisors Primary asset class under managementFixed income Fixed income Listed equity ESG investmentRelevant policiesESG investment policies Principles
75、for responsible investment of the parent company Principles for responsible investment Positive screening-Negative screening-ESG integration Thematic investment StewardshipRelevant policiesPrinciples for global stewardship Principles for proxy voting of the parent company Global and regional voting
76、guidelines Historical proxy voting Annually Quarterly Quarterly Voting detailsMajor annual voting Voting details for S&P 500-Engagement Response to climate change Relevant policies-Climate-related disclosure requirements,disclosure requirements for climate transformation plans Environmental informat
77、ion reports TCFD report(including the assurance of Scopes 1,2,and 3 emissions)-TCFD report Form of disclosure Dedicated reports Overview of global EngagementAnnual stewardship reports,global fixed income impact reports,and annual real estate ESG reports Quarterly stewardship reports,and annual votin
78、g overview reports Comprehensive reports Sustainability report-Note:Data collated as of June 30,2022 Source:Public informationIn addition,State Street Global Advisors focused on the lists of engagement enterprises and topics in response to climate change.It also published its disclosure requirements
79、 and carbon data measurement methods for climate transformation schemes of the invested enterprises for a low-carbon transformation,and the information it obtains reflects the way it assesses the ability of a company to cope with climate change.Unlike most institutions with a parent company,State St
80、reet Global Advisors sees different risks and opportunities in its asset management business from those of its parent company and has published a separate TCFD report.1.1.3 Canada In January 2021,the Capital Markets Modernization Task Force in Ontario,Canada,issued the Capital Market Modernization T
81、ask Force Final Report and recommended that listed companies disclose their management information on climate-related risks through the TCFD framework.In April 2022,the ESG Investment Disclosure PracticeAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|7Table 4 Public Disclosur
82、es of ESG Investment of Some Asset Management Institutions in CanadaBMO Global Asset Management Manulife Investment Management RBC Global Asset Management Primary asset class under managementListed equity,fixed income Listed equity Fixed income ESG investmentRelevant policies ESG policy statement-Re
83、sponsible investment method Positive screening-Negative screening ESG integration Thematic investment Impact investment method-StewardshipRelevant policies Stewardship method and Engagementpolicies Proxy voting policies Proxy voting guidelines Historical proxy voting Quarterly Annually Quarterly Vot
84、ing details-Engagement Response to climate change Relevant policies-Climate change statement Response to climate change Environmental information reports TCFD reports(no data on carbon emissions)TCFD reports(including the assurance of Scope 1,2,and 3 emissions)TCFD reports(including the assurance of
85、 Scope 1,2,and 3 emissions)Form of disclosure Dedicated reports Stewardship reports,responsible investment review Stewardship reports Impact investment reports,corporate governance,and responsible investment reports Comprehensive reports-ESG report,sustainability report-Government of Canada indicate
86、d that it plans to require financial institutions to disclose TCFD climate risk-related financial information beginning in early 2024.Institute for Sustainable Finance(ISF)pointed out that net zero emission is a major concern for Canadian asset managers.In the context of COVID-19,social topics such
87、as diversity,equality,and inclusion also became more important.Three institutions in this report disclosed their stewardship policies and TCFD reports,but they did not give detailed explanations on proxy voting.It is worth mentioning that BMO Global Asset Management was the only institution in the s
88、tudy sample that disclosed the way it supervised external managers,and its responsible investment review reports also cited numerous cases to justify its ESG investment practices.In addition,RBC Global Asset Management,in its Responsible Investment Report,not only presented ESG investing outcomes,bu
89、t also shared its research relating ESG.Note:Data collated as of June 30,2022 Source:Public informationESG Investment Disclosure PracticeAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|8Table 5 Public Disclosures of ESG Investment of Some Asset Management Institutions in Aust
90、raliaAustralian EthicalAltius Investment Management Macquarie Asset ManagementPrimary asset class under managementListed equity Fixed income Fixed income ESG investmentRelevant policies Australian Ethical Investments Articles of Association and investment policies and its position on ESG key topics
91、Cash and fixed-interest sustainable policies-Positive screening-Negative screening ESG integration-Thematic investment-1.1.4 Australia After review of relevant policies,the Australian Securities and Investment Commission issued the Disclosure Guidelines on the Company Act 1013DA in 2011,which stipul
92、ated the ESG information required for disclosure by listed companies in their investment products.In November 2021,the Australian Prudential Regulation Authority(APRA),Australias financial security regulator,issued the Prudential Practice Guide CPG229 Climate Change Financial Risks,which advises fin
93、ancial institutions to carry out climate risk management as soon as possible and provide guidance on their climate-related financial risk disclosures.According to a report by the Responsible Investment Association Australasia(RIAA)in 2022,84%of Australian asset managers published their ESG investing
94、 policies,many Australian formulated or updated their stewardship policies in 2021 and improved their stewardship disclosure.In terms of topics of concern,climate remains the most critical issue,with gender diversity and women empowerment jumping from tenth to sixth place in importance in 2021.Of th
95、e three sample institutions,Australian Ethical was outstanding in Morningstars ESG investing rankings as it disclosed investment policies,detailed explanations on proxy voting,stewardship reports,and other information.In addition,it is worth mentioning that Australian Ethical published its position
96、on 39 industrial and ESG topics on its official website.For example,it proposed a 2040 carbon reduction target and a 2030 climate investment target in terms of climate change and proposed a threshold for investment in fossil fuel industries.Macquarie Asset Management conducted a detailed analysis of
97、 cases in its sustainability reports,covering the challenges,interactive content and results,and gains from those cases of the invested enterprises.Macquaries climate information was disclosed jointly with Macquarie Group.Unlike the aforementioned two institutions,Altius Investment Management ranked
98、 at the forefront of Morningstars ESG investment rankings,but it made fewer public disclosures without signing up to the United Nations Principles for Responsible Investment(UN PRI)or any other organizations.ESG Investment Disclosure PracticeAnnual Report on ESG Investing in Chinas Asset Management
99、Industry 2022|9Australian EthicalAltius Investment Management Macquarie Asset ManagementStewardshipRelevant policies Proxy voting policy-Historical proxy voting Annually-Annually Voting detailsOnly on some votes against-Interactive practices -Response to climate change Relevant policies Position on
100、climate actions-Environmental information reports TCFD report(including the assurance of Scope 1,2,and 3 emissions)-Form of disclosureDedicated reports Semi-annual stewardship overview,annual SDG reports-Annual stewardship reports Comprehensive reports Annual sustainability report Quarterly sustaina
101、bility report Annual sustainability report Table 5 Public Disclosures of ESG Investment of Some Asset Management Institutions in Australia(continued)Note:Data collated as of June 30,2022 Source:Public information1.1.5 JapanThe Guidance for Collaborative Value Creation issued by Japan in 2017 require
102、s asset managers to focus on incorporating ESG considerations,and the Stewardship Code revised in 2017 requires asset managers to formulate and disclose stewardship policies,voting policies,and stewardship and voting practices.In this context,three Japanese institutions in this study sample illustra
103、ted the importance of identifying,considering,and addressing ESG topics to fulfill fiduciary duties,create additional investor value,and strengthen capital management capacities and also disclosed the relevant policies and reports.According to the survey issued by the Japan Sustainable Investment Fo
104、rum(JSIF)in 2022,52 Japanese asset managers surveyed formulated ESG investment-related policies within their companies,more than 94%of which disclosed such policies to the public.In terms of shareholder engagement,the topics of most concern to the respondents are carbon emission disclosures,TCFD-rel
105、ated actions,diversification promotion measures,board effectiveness evaluation,and supply chain management.Some enterprises said that carbon emission and TCFD were the topics included in the interactive content over the past two years,which indicate that Japanese enterprises will attach importance t
106、o coping with climate change this year.As an outstanding case,the 2021 Sustainability Report of Asset Management One contains 16 pages of statements on the substantive analysis methodology.When discussing its key substantive areas(i.e.,climate change,biodiversity and environmental damage,human right
107、s,and health and well-being),Asset Management One made a statement in terms of the importance,potential positive impact,risks&opportunities of related investments,and interactive cases of stakeholders.Disclosures in line with the TCFD framework were embedded in the presentation of climate change by
108、Asset Management One.In addition,when disclosing information related to stewardship,Asset Management One conducted a self-ESG Investment Disclosure PracticeAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|10assessment of the previous yearswork and stewardship within the report
109、ing period and briefly stated the future work arrangement using the Plan,Do&Check,Action framework.Table 6 Public Disclosures of ESG Investment of Some Asset Management Institutions in JapanAsset Management One Nomura Asset Management Nikko Asset Management Primary asset class under managementListed
110、 equity Listed equity Listed equity ESG investmentRelevant policies-ESG statements,basic policies for responsible investment management Fiduciary and ESG principles,responsible investment policies Negative screening-ESG integration Thematic investment-Stewardship Relevant policies Proxy voting polic
111、ies Proxy voting policies Interactive and stewardship policies Historical proxy voting Quarterly Quarterly Quarterly Voting details-Only on negative votes Engagement Response to climate change Relevant policies-Statement of position on climate change Environmental information reports TCFD reports TC
112、FD reports TCFD reports Form of disclosure Dedicated reports Stewardship reports Proxy voting reports,responsible investment reports-Comprehensive reports Sustainability report-Sustainability report Note:Data collated as of June 30,2022 Source:Public information 1.2 Disclosure practices of Chinese a
113、sset managersConsidering the state of development of ESG investing in China,fewer Chinese asset managers were included in the international ESG investment rankings.Therefore,Chinese a s s e t m a n a g e r s a m p l e s were selected from UN PRI signatories.In Mainland China,73 asset managers that s
114、igned UN PRI before the end of June 2022 were selected for this report,which attempted to summarize the disclosure trend of Chinas ESG investing market.In Hong Kong,the number Table 7 Hong Kong Asset Manager Research SampleRegionHong Kong InstitutionAsia Debt Management Hong Kong Ltd.,Orchid Asia Ho
115、ng Kong Management Co.,Ltd.,NewQuest Capital Partners,ARCH Capital Management Co.,Ltd.,Longtou Capital Manage(HK)Co.,Limited,MBK Partners,Kerogen Capital,Mirae Asset Global Investments(Hong Kong)Ltd.,AIF Capital,Advantage Partners,Brawn Capital Limited,Welkin Capital Management,Nexus Point,Affinity
116、Equity Partners,Link Real Estate Investment Trust,Allard Partners,JK Capital Management Limited,CLSA Capital Partners Limited,Essence Asset Management(Hong Kong)Limited,AvantFaire Investment Management Limited ESG Investment Disclosure PracticeAnnual Report on ESG Investing in Chinas Asset Managemen
117、t Industry 2022|11Table 8 ESG Investment Disclosures of UN PRI Signatories in Mainland ChinaPublic funds Private funds Others Total UN PRI signatories 21341873The following has been disclosed:ESG investment reports 1-1ESG reports-213Annual reports or social responsibility reports mentionning ESG inv
118、esting2-13Reports in line with TCFD recommendations-Targets,planning,and roadmap of carbon neutrality 3-3ESG investing-related guidelines or policies 5117Introductory information on ESG apart from the above 22-4Total 1353-Note:Others include bank asset management institutions,venture capital institu
119、tions,and comprehensive asset management institutions Source:Public informationof asset managers that signed UN PRI increased dramatically since 2019,and in this report,20 UN PRI signatories before 2019 were selected as samples.1.2.1 Mainland China There is no current mandatory requirement for ESG i
120、nvesting disclosure in China.The Peoples Bank of China issued the Guidelines for Financial Institutions Environmental Information Disclosure in July 2021,which stipulated the principles,forms,and content of the disclosure and encouraged financial institutions to disclose environment-related informat
121、ion at least annually.In June 2022,the China Banking and Insurance Regulatory Commission issued the Guidelines on Green Finance for the Banking and Insurance Industries,and suggested that banking and insurance institutions should implement green finance investment policies,institutional governance f
122、ramework,post-investment management,and sustainable development of institutions within one year,publicly disclose green finance strategies,policies,and development,and conduct a third-party audit verification as appropriate.The overall ESG investment practice of asset management institutions in Main
123、land China is still in its initial development stage,with additional investment disclosures coming soon.Among the 73 UN PRI signatories,ESG methodology was the most popular type of disclosure content.Nearly 10%of asset management institutions disclosed their responsible investment policies,voting po
124、licies,or engagement policies,most of which were public funds.With different forms of ESG investing disclosures,few institutions introduced a specific process and strategy of ESG investing.Currently,only Southern Asset Management issued independent ESG investing Reports and made nearly 70 pages of s
125、tatements on its ESG investing management,solutions,risk management methods,effectiveness,and its own ESG performance.Three asset managers disclosed ESG investing management and results and their own ESG operations in their ESG reports.Three asset management institutions disclosed the relevant conte
126、nt in the form of social responsibility reports and annual reports.ESG Investment Disclosure PracticeAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|12Table 9 Public Disclosures of ESG Investment of Some Asset Management Institutions in Mainland ChinaSouthern Asset Management
127、 Orient Securities Guoyuan Securities Primary asset class under managementFixed income-ESGinvestment Relevant policies-ESG risk management statement,responsible investment statement Guidelines on responsible investment Positive screening Negative screening ESG integration Thematic investment Steward
128、ship Relevant policies-Historical proxy voting Integrated data and individual cases-Voting details-Engagement-Response to climatechange Relevant policiesCarbon neutrality action plans of Southern Asset Management Carbon neutrality targets and action plans of Orient Securities-Environmental informati
129、on reports-Descriptions in social responsibility reports based on the TCFD framework Descriptions in ESG reports based on the TCFD framework Form of disclosure Dedicated reports ESG investment reports-Comprehensive reports-Social responsibility reports Annual ESG reports Due to different understandi
130、ngs of ESG concepts in China and abroad,ESG information disclosures by asset managers in Mainland China have Chinese characteristics,including a focus on the core local topics of ESG.The key topics on intra-company management of Southern Asset Management include party construction,intellectual prope
131、rty protection,and anti-money laundering.As the first Chinese asset manager that joined UN PRI,JD Capital has included equity investment data for rural revitalization and common prosperity(boosting economic growth and supporting small and medium-sized enterprises)in its annual reports since 2016.On
132、the topic of the environment,asset managers in Mainland China primarily use a carbon peaking and carbon neutrality starting point,but need improved disclosure of climate governance.At present,Aegon-industrial Fund Management Co.,Ltd.has disclosed the most comprehensive content on this topic,includin
133、g a white paper on carbon neutrality that contains a carbon neutrality declaration,carbon neutrality planning,and realization path.None of the nine UN PRI signatories supporting the TCFD has released a separate TCFD report.The Research Report on Climate Performance of Chinese Asset Management Instit
134、utions(2022)also pointed out that asset management institutions need to strengthen the climate risk management structure and method and risk impact assessment.In the context of Chinas carbon neutrality and carbon peaking,addressing climate change and reducing carbon emissions will be one of the core
135、 themes of future ESG investments and disclosures by asset management institutions in Mainland China.Note:Data collated as of June 30,2022 Source:Public informationESG Investment Disclosure PracticeAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|131.2.2 Hong Kong On the regul
136、ation level,Hong Kong Exchanges and Clearing Limited(HKEX)revised a previously issued ESG Reporting Guide in 2019.Listed companies emphasized the disclosure of ESG responsibilities of the Board of Directors based on the principle of comply or explain and disclosed climate-related information in acco
137、rdance with TCFD.In November 2021,HKEX pointed out,in the Reporting on TCFD recommendations-Guidance on Climate Disclosures,that it intends to force listed companies to make climate-related information disclosures in line with TCFD recommendations by 2025,and it also encourages the implementation of
138、 TCFD reports as soon as possible.Among the 20 asset managers in Hong Kong that joined UN PRI before 2019,most are private funds and primarily disclose ESG-related policies to the public.Nine asset managers disclosed their responsible investment policies,three asset managers disclosed their proxy vo
139、ting policies,and one disclosed its sustainability and responsible investment reports.In this context,five institutions provided access to the UN PRI annual transparency report on their official websites.In terms of environmental information disclosure,of the three institutions that support TCFD,two
140、 disclosed the TCFD environmental disclosures,and three disclosed their environmental or biodiversity policies.Specifically,Asia Debt Management Hong Kong Ltd.(ADM Capital)is the first fund company in Asia(excluding Japan)to join the UN PRI.In its sustainability report,ADM Capital provided detailed
141、information on ESG integration based on responsible investment policies,team building,and ESG investing.This report has a separate environmental section showing the portfolios carbon footprint,zero-emission attitude,and information disclosure in line with TCFD recommendations.In addition,Mirae Asset
142、 Global Investments(Hong Kong)Ltd.disclosed its ESG-related research resources by providing a web link at the end of the responsible investment report that included industry research published during the reporting period,ESG field perspectives,ESG presentations,and videos of previous ESG summits.Tab
143、le 10 Public Disclosures of ESG Investing of Some Asset Managers in Hong KongAsia Debt Management Hong Kong Ltd.Mirae Asset Global Investments(Hong Kong)Ltd.Advantage PartnersPrimary asset class under managementFixed income Listed equity Private equity ESG investment Relevant policies ESG policy Res
144、ponsible investment policy ESG policy Positive screening-Negative screening ESG integration Thematic investment-Stewardship Relevant policies Stewardship and engagement policies Stewardship rules,voting and engagement policies-Historical proxy voting-Semi-annual overview-Voting details-Engagement -E
145、SG Investment Disclosure PracticeAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|14Table 11 Disclosure Content Recommendations for Asset Managers ESG Investment ReportTopic Methodology disclosure content Practice disclosure content Company overview-Leaders speech Involvement
146、of external organizations Awards ESG investing governance framework Post setting and training mechanism Internal research papersExternal service providers Asia Debt Management Hong Kong Ltd.Mirae Asset Global Investments(Hong Kong)Ltd.Advantage PartnersResponse to climate change Relevant policiesCli
147、mate change statement-Environmental information reports TCFD reports TCFD reports-Reporting form Dedicated reports(Privately raised bonds)annual sustainability reports Annual voting reports,annual responsible investment reports-Non-financial comprehensive reports-Table 10 Public Disclosures of ESG I
148、nvesting of Some Asset Managers in Hong Kong(continued)Note:Data collated as of June 30,2022 Source:Public information 1.3 Disclosure recommendations for asset managersAccording to the 2022 Global ESG Study of the Capital Group,54%of the global asset managers surveyed believe that transparent ESG in
149、vestment-related information effectively prevents asset managers from greenwashing.Therefore,making active,multi-dimensional,and accurate ESG information disclosures reflect the competitive advantages of asset managers and demonstrate their commitment to sustainable development and ESG investing res
150、ults.However,regarding ESG investing of Chinese asset managers,the Boston Consulting Group pointed out that the lack of a unified standard for measuring and disclosing the performance of ESG investments represents a significant challenge.This report attempts to put forward a framework for compiling
151、ESG investment reports suitable for Chinese asset management institutions.A comprehensive ESG investing disclosure content can be divided into three categories referring to international leading practices and UN PRI reporting standards.The first is a company overview;the second is a methodology base
152、d on policies and system documents;the third is practice information focusing on showing practice content,performance,and impact.These three categories can be centrally demonstrated in the ESG investing report,and the specific content of individual sections were disclosed in detail as separate docum
153、ents,e.g.,ESG investing policies.ESG Investment Disclosure PracticeAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|15Topic Methodology disclosure content Practice disclosure content ESG investment ESG investing strategy ESG materiality analysis and key issues-ESG investment-r
154、elated policies ESG investing process ESG investment-related products and services Achievement of sustainability goals Stewardship Positions on shareholder engagement policy and key topics Shareholder engagement,engagement list and topics,and cases Proxy voting policy,voting guidelines,and expectati
155、ons for investee companies Proxy voting records and rationale,shareholder proposals,and cases Environmental topics Climate change policy Biodiversity policyTCFD reports Table 11 Disclosure Content Recommendations for Asset Managers ESG Investment Report(Continued)Chinese asset managers are advised t
156、o actively disclose the progress of ESG investment-related work.In the initial stage of ESG practice in China,asset managers were advised to first formulate and disclose ESG investing strategies and policies(including governance structure and ESG investment process),then prepare ESG investing report
157、s based on the implementation of ESG investing,and disclose the practice at least annually.If an institution has joined a relevant industry organization such as UN PRI,it should publish a transparency report submitted to the organization on its official website at the same time.If an institution int
158、ends to disclose ESG investment information by releasing social responsibility or sustainability reports,the SASB or GRI framework may be used.It should be noted that ESG investment disclosure should focus on specific actions and impacts of institutions,using specific cases and quantifiable indicato
159、rs to avoid a disconnect between disclosure and reality.A new and informative disclosure framework will be introduced.Based on the TCFD framework,the International Sustainability Standards Board(ISSB)issued Exposure Draft IFRS S1General Requirements for Disclosure of Sustainability-related Financial
160、 Information and Exposure Draft IFRS S2Climate-related Disclosures.The ISSB also plans to introduce ESG disclosure standards by the end of 2022,expected to promote international harmonization on ESG disclosures.Additionally,according to the World Economic Forums Global Risks Report 2020,biodiversity
161、 is among the top five risks for the next decade.By establishing the TCFD in 2022,it may provide a common risk management and disclosure framework for asset management institutions.The importance of supporting TCFD,accelerating the establishment and improvement of a risk governance structure,risk id
162、entification and management and key indicators have once again been emphasized.This will also help lay a good foundation for subsequent ESG-related work.II.Development of ESG InvestingDevelopment of ESG InvestingAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|17From a global
163、perspective,this section summarizes the international sustainable investment development based on two factors:UN PRI signatories and global sustainable funds.Domestically,ESG public funds,ESG indexes,and ESG wealth management products of banks are introduced,and the status quo of ESG research develo
164、pment is analyzed through interviews with securities companies.The main findings and conclusions are as follows:Global ESG investor practices have seen significant growth,primarily in North America and Asia-Pacific.As of the beginning of 2021,more than 3,800 institutions had signed the UN PRI,and th
165、e assets under management(AUM)of the signatory institutions amounted to USD 121.3 trillion.Compared with asset owners,asset managers and service providers contributed more to the increase of signatories in recent years.From a regional performance perspective,contributions from North America and Asia
166、-Pacific to incremental signatories continued to grow.North America and Asia-Pacific contributed 28%and 19%of the incremental signatories,respectively,in the first half of 2022.In Mainland China,in addition to private funds,asset managers such as insurance asset management companies,bank wealth mana
167、gement departments,and public funds have also joined the UN PRI and begun to practice ESG.Asia(excluding Japan)ranks third in terms of the number of sustainable funds,which shows a positive development trend.The number of global sustainable investment funds reached an all-time high in Q3 2021.During
168、 that same period,new sustainable funds launched in China led to a 69%increase in the AUM of sustainable funds in Asia(excluding Japan).Excluding suspected greenwashed products,the number of global sustainable investment funds declined to 5,932 in Q4 2021 with assets of USD 2,744.3 billion.A downwar
169、d trend was particularly evident in Europe,while other regions maintained their growth.At the end of June 2022,the global capital invested in sustainable investment funds decreased due to geopolitical conflicts and global asset price fluctuations,while the scale of sustainable investment funds in As
170、ia(excluding Japan)remained largely stable,and maintains third place worldwide.Most domestic ESG public funds are active and equity investment funds,and a trend that ranks core ESG public funds by downside risk and information ratio were superior to those in the same category.In 2020,the scale of ES
171、G public funds grew significantly after President Xi Jinping solemnly announced at the United Nations General Assembly that China will strive to achieve peak of carbon emissions by 2030 and carbon neutrality by 2060.In terms of fund types,active and stock funds predominate among ESG public funds.In
172、terms of performance,at the end of June 2022 and compared with the performance over the previous eighteen months,the proportion of core ESG funds ranked by downside risk and information ratio exceeded the median of those in the same category over the past two to three years.The proportion of core ES
173、G funds with a Sharpe ratio above the performance benchmark exceeded 50%over the past two to three years.The large scale of Chinese ESG bank wealth management products is an important force in ESG practices.At the end of June 2022,according to the latest statistics from L,a total of 276 ESG bank wea
174、lth management products were launched in the domestic market,raising over RMB 150 billion.In terms of ESG strategy,ESG bank wealth management products mainly invested in industries like green Development of ESG InvestingAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|18develo
175、pment,clean energy,energy conservation,environmental protection,consumption upgrading,health and medicine,rural revitalization,inclusive finance,and support for small and micro enterprises,which reflected the theme of green upgrades and promoted high-quality economic development.In terms of asset al
176、location,65.7%of ESG bank wealth products are fixed-income assets,and 33.5%are mixed assets.The ESG practice of bank financing subsidiaries in bond investment will accelerate the integration of domestic fixed income ESG investment.Chinese securities companies have joined the ESG ecosystem and contri
177、bute to the analysis and processing of ESG information.Securities companies are important service providers in the investment market,and their participation in the analysis and processing of ESG information facilitates considering ESG factors in the investment process.Focusing on China,some research
178、es promote relevant research due to the importance shareholders attach to green finance;some conduct ESG per client commissions,index construction,and ESG materiality-related research needs.In terms of research content,most related researches focus on ESG investing concepts and market development tr
179、ends,and index and evaluation system construction.ESG and information disclosure,as the basis of ESG rating and investment application,is a key market concern.Regarding the development direction of ESG research,some securities companies believe that more industries will consider ESG,while others fee
180、l ESG indexes may become important benchmarks for performance comparison and tracking indexes.2.1 Development of international ESG investing2.1.1 UN PRI signatories UN PRI is the most influential responsible investor organization in the world,committed to developing a more sustainable global financi
181、al system and implementing six responsible investment principles in the investment field.By becoming a UN PRI signatory,an Asset Owner,Asset Manager,or Service Provider commits to consider ESG factors in investment and ownership decision making.Therefore,UN PRI signatories and AUM reflect global ESG
182、 awareness and future development trends.The number of UN PRI signatories and their AUM continue to grow.As of the beginning of 2021,more than 3,826 institutions Fig.1 Number of UN PRI Signatories and Their AUMAUM of all signatories(USD trillion)(left axis)AUM of asset owners(USD trillion)(left axis
183、)Number of all signatories (right axis)Number of asset owner signatories(right axis)6040200425040003750350032503000275025002250200005002006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source:UN PRIDevelopment of ESG InvestingAnnual Repo
184、rt on ESG Investing in Chinas Asset Management Industry 2022|192016 2017 2018 2019 2020 2021 2022/6/30 455 3480893227938206323491586219Fig.2 Number of UN PRI Signatories by RegionArab countries North America Africa South America&Latin America Eu
185、rope Asia&Pacific Middle East Source:UN PRIhad signed the UN PRI,an increase of 788 compared to 2020;their AUM topped USD 121.3 trillion,a year-over-year increase of 17.3%.An analysis of UN PRI signatory types shows that the number of asset owners steadily increased at a compound annual growth rate
186、of 22%.By 2021,the number of asset owners signing UN PRI increased from 32 in 2006 to 609,and their AUM rose from USD 2.0 trillion in 2006 to USD 29.2 trillion.The number of signing asset managers and service providers increased rapidly(compounded annual growth rate of 36%),from 31 in 2006 to 3,217
187、in 2021,and contributed more to the growth in the number of recent signatories.As of early 2021,the AUM of asset managers and service providers signing the UN PRI eclipsed USD 92.1 trillion,accounting for 76%of all signatories.UN PRI signatories primarily come from major economies in Europe,North Am
188、erica,and Asia-Pacific.As of June 30,2022,the cumulative number of signatories from those three regions were 2,662,1,233,and 703,which accounted for 53%,25%,and 14%of all signatories,respectively.From an incremental perspective,Europe saw more than 300 new signatories from 2019 to 2021,consistently
189、contributing more than 50%of the increase in signatories.The contribution of North America and Asia-Pacific to incremental signatories also continued to grow.North America and Asia-Pacific contributed 28%and 19%,respectively,in the first half of 2022.Fig.3 Number and Types of UN PRI Signatories in C
190、hina2222292012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022/6/30Service providers Asset managers Asset owners Source:UN PRIDevelopment of ESG InvestingAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|20As of June 30,2022,a total of 188 institutions i
191、n China(including the Mainland and Hong Kong)had joined the UN PRI,including seven asset owners,148 asset managers,and 33 service providers.The number of Mainland signatories exceeded 100(102 in total),including four asset owners,74 asset managers,and 24 service providers.In addition to private fund
192、s,investment institutions in the category of asset managers such as insurance asset management,bank wealth management departments,and public funds began to pay attention to ESG.The 74 asset managers include four insurance asset managers(Allianz Asset Management,China Life Asset Management,CPIC,and T
193、aikang Asset),two bank asset managers(Huaxia Wealth Management and Hengfeng Bank Asset Management Department),22 public funds,and three asset managers of securities companies(First Capital,Great Wall Securities,and Guoyuan Securities).Of those,at the end of 2021,China Pacific Insurance(Group)Co.,Ltd
194、.(CPIC)joined the UN PRI as an asset owner and asset manager,and represents the third domestic institution with dual identities in the organization after Taikang Asset Management Co.,Ltd.and Taikang Insurance Group.2.1.2 Global ESG Fund In a global context,asset managers constantly redefine their ex
195、isting fund products in a sustainable direction.After the EU SFDR(March 2021 edition)came into effect,in Q2 2021,many European institutions,by amending investment objectives and/or investment policies,changed approximately 1,800 fund products from SFDR Article 6 non-sustainable products to Article 8
196、 or 9 sustainable products.Thus,the number of global sustainable investment funds reached an all-time high in Q3 2021,up 51.9%from Q2,with 7,486 funds representing USD 3,904,600 million in AUM.During the same period,the AUM of sustainable funds in Asia(excluding Japan)grew by 69%,primarily due to ne
197、w sustainable fund offerings in China.The number of global sustainable investment funds declined to 5,932 in Q4 2021 with coverage of USD 2,744,300 million.The downward trend was particularly evident in Europe,while other regions maintained their growth.According to a Morningstar analysis,some of th
198、e adjusted products did not explain their environmental and social performance in detail in accordance with the nature of SFDR Article 8 products in their marketing and legal documents,and some ESG strategies produced no material impact on investment results and were suspected of greenwashing.After
199、excluding those funds,the number and AUM of European sustainable funds decreased by 27.4%and 35%,respectively,in Q4 2021.Since 2022,money invested in sustainable investment funds decreased due to the combined impact of the Russia-Ukraine war,rising interest rate,and market volatility.At the end of J
200、une 2022,the number of global sustainable investment funds increased by 13.1%compared with Q4 2021,while the AUM decreased by 10.2%to USD 2,465,000 million.In terms of regional contribution,compared with the all-time high in Q3 2022,the AUM of funds in the U.S.,Canada,Australia/New Zealand,and Japan
201、 declined by 17%,12%,15%,and 29%,respectively.Sustainable investment funds in Asia(excluding Japan)remained unchanged.Development of ESG InvestingAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|21Fig.4 AUM of Sustainable Investment Funds by Region45000400003500030000250002000
202、000002020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2Europe (USD 100 million)USA(USD 100 million)Japan(USD 100 million)Australia/New Zealand(USD 100 million)Canada (USD 100 million)Asia(excluding Japan)(USD 100 million)Source:MorningstarTable 12 Keywords That Define E
203、SG InvestmentsType of ESG investment Keywords used for screening Core ESG investments ESG,responsibility Broad ESG investments Environmental:environmental protection,low carbon,carbon neutrality,green,beautiful China,energy saving,ecological,climate change,regeneration Social:sustainability Governan
204、ce:corporate governance 2.2 Development of domestic ESG investment In this report,ESG investments are divided into core ESG investments and broad ESG investments.Core ESG investments represent those made in financial products whose product name,investment objective,investment philosophy,investment s
205、cope,or performance benchmark contain the keywords ESG and responsibility.Broad ESG investments refer to those that focus on related industries or themes encouraged by the ESG concept.Whether environment,environmental protection,low carbon,carbon neutrality,green,beautiful China,energy saving,ecolog
206、ical,climate change,regeneration,sustainability,corporate governance,or other keywords are included in the product name,investment objective,investment philosophy,investment scope,or performance benchmark can be used as a judgment criterion.2.2.1 Domestic ESG public funds Since 2005,the number,share
207、,and AUM of ESG public funds have generally increased.Domestic public funds were screened according to the above criteria.There are 374 domestic ESG public funds as of June 30,2022,(including core ESG public funds and ESG-themed public funds),with over 241.9 billion Development of ESG InvestingAnnua
208、l Report on ESG Investing in Chinas Asset Management Industry 2022|22Based on primary investment type,as of June 30,2022,the ESG public funds were mainly hybrid and stock funds.Both fund types accounted for 65%and 28%of all ESG public funds,fund shares accounted for 69%and 20%of all ESG shares in pu
209、blic funds.The net value accounted for 68%and 26%of all ESG public funds.ESG public bond funds accounted for a relatively small share of all ESG public funds,i.e.,less than 10%,in terms of number of funds,fund shares,or fund net value.Fig.5 Evolution in Share,AUM,and Number of ESG Public FundsSource
210、:Wind5000450040003500300025002000002002005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022/6/30Net value of funds(RMB 100 million)(left axis)Fund shares(100 million)(left axis)Number of new funds(Nr.)(right axis)Net value of funds(RMB 100 mi
211、llion)Fund shares(100 million)Number of funds(Nr.)Source:WindFig.6 Number,Share and AUM of Different Types of ESG Public Funds(based on primary investment type)227228433106Bond fund Hybrid fund International(QDII)fund Stock fund shares and a net value of RMB 392.5 billion.In ad
212、dition,ESG public funds gained significant growth after President Xi Jinping declared at the United Nations General Assembly in 2020 that China will strive to achieve carbon peak emissions by 2030 and carbon neutrality by 2060.Based on secondary investment type,as of June 30,2022,stock-based hybrid
213、funds,common stock funds,and flexible funds accounted for the majority of the 393 ESG funds;the number of funds were 185,47,and 55,the shares were 145.1 billion,32.6 billion,and 21.4 billion,and the net values were RMB 200.2 billion,RMB 82.3 billion,and RMB 65 billion,respectively.The number and AUM
214、 of other fund types were small.Development of ESG InvestingAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|23Net value of funds(RMB 100 million)Fund shares(100 million)Number of funds(Nr.)Source:WindFig.7 Number,Share and AUM of Different Types of ESG Public Funds(based on s
215、econdary investment type)228727Enhanced index fund Common stock fund Bond-based hybrid fund Stock-based hybrid fund Flexible fund Hybrid bond primary fund International(QDII)hybrid fundInternational(QDII)stock fund Passive index bond fund Passiv
216、e index fund Fig.8 Number,Share and AUM of Different Types of ESG Public Funds(Active and Passive)35732865Active Passive Net value of funds(RMB 100 million)Fund shares(100 million)Number of funds(Nr.)Source:WindFrom the perspective of active and passive funds,as of June 30,2022,active fun
217、ds take the largest share among the 374 ESG public funds.The 309 active funds cover 209.1 billion fund shares,with a net value of RMB 357.1 billion.In comparison,there are only 65 passive funds covering 32.8 billion shares,with a net value of RMB 357.1 billion.2.2.2 Domestic core ESG public funds In
218、 2006,Bank of China Investment Management launched the first core ESG public fund BOC Sustainable Growth Mixed,and put forward in its investment philosophy:to focus on companies with core competitiveness,sound corporate governance,courage to innovate and social responsibility.In 2013,Caitong Fund la
219、unched the first publicly offered fund with ESG in its product name,Caitong CSI ESG100 Index Enhanced,and tracked the CSI Caitong China Sustainable Development 100 ECPIESG Index.Development of ESG InvestingAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|24Based on primary inv
220、estment type,as of June 30,2022,hybrid funds and stock funds account for most ESG public funds,51%and 37%respectively.Based on fund shares and fund net value,hybrid funds and bond funds account for 53%and 32%of the total fund shares,and 61%and 26%of the total net value.Net value of funds(RMB 100 mil
221、lion)(left axis)Fund shares(100 million)(left axis)Number of new funds(Nr.)(right axis)Source:WindFig.9 AUM,Share,and Number of Core ESG Public Funds2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022/6/3030252006005004003002001000The number of released co
222、re ESG public funds has increased significantly since 2020.In April 2022,the CSRC encouraged public funds to practice the concept of responsible investment and guided the industry to summarize the laws of ESG investing,vigorously develop green finance,and improve the environmental performance of inv
223、estment activities in its Opinions on Accelerating the Promotion of High-Quality Development of the Industry of public funds to promote the release of ESG funds.As of June 30,2022,81 core ESG public funds were screened using keywords ESG and responsible investment included in the product name,invest
224、ment objectives,investment philosophy,investment scope,or performance benchmark.These core funds cover more than 55.6 billion shares and a total fund value of RMB 70.4 billion.The investment objectives,investment philosophy,and investment scope of 13 funds,among the 81 core ESG funds,mention the use
225、 of ESG-related factors for evaluation;57 funds do not explicitly mention that but are related to the ESG concept or sustainability,and nine funds relate to the ESG theme or industry.Fig.10 Number,Share and AUM of Different Types of Core ESG Public Funds(based on primary investment type)Net value of
226、 funds(RMB 100 million)Fund shares(100 million)Number of funds(Nr.)Source:Wind29741878130 Bond fund Hybrid fund Stock fund Development of ESG InvestingAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|25Fig.11 Number,Share and AUM of Different Types of Core ESG Publi
227、c Funds(based on secondary investment type)Net value of funds(RMB 100 million)Fund shares(100 million)Number of funds(Nr.)Source:WindMedium&long-term pure bond fundsEnhanced index fund Common stock fundStock-based hybrid fund Flexible fund Hybrid bond primary fundPassive index bond fund Passive inde
228、x fund 7910 316872Fig.12 Number,Share and AUM of Different Types of Core ESG Public Funds(Active and Passive)47934Active Passive Net value of funds(RMB 100 million)Fund shares(100 million)Number of funds(Nr.)Source:WindBased on secondary investment type,as
229、 of June 30,2022,stock-based hybrid funds and passive index bond funds accounted for most of the 81 ESG funds(40 and 6,respectively),with shares being 28.7 billion and 16.1 billion,net values being RMB 40.2 billion and RMB 16.7 billion,respectively.The number and AUM of other fund types are small.Fr
230、om the perspective of active and passive funds,as of June 30,2022,active funds take the largest share among the 81 ESG public funds.The 57 active funds encompass 34.1 billion fund shares,with a net value of RMB 47.9 billion.In comparison,only 24 passive funds involve 21.5 billion shares,with a net v
231、alue of RMB 22.5 billion.Development of ESG InvestingAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|26In order to investigate the performance of core ESG funds,the research team studied their downside risk ranking percentile,information ratio ranking percentile,annualized ra
232、te of return versus performance benchmark range,and annualized Sharpe ratio versus performance benchmark range as of June 30,2022.Verheyden,Eccles,and Feiner(2016)designed a series of tests to compare portfolios screened by ESG standards with those not screened by ESG standards.They found an ESG scr
233、eening strategy reduced the return rate only slightly but reduced the risk,and had little negative influence on portfolio diversity.Speaking of the actual performance of core ESG actively managed funds,the downside risk rank shows the percentage of such funds outperforming the median over the past t
234、wo and three years exceeds 70%.The information ratio rank shows the percentage of such funds outperforming the median over the past eighteen months exceeds 50%,and the last two to three years soars to 98%.In terms of the rate of return vs performance benchmark,no core ESG actively managed funds have
235、 realized a rate of return significantly higher than 0;in terms of the Sharpe ratio vs performance benchmark,51%of core ESG actively managed funds in the last two and the last three years,respectively have realized a Sharpe ratio significantly higher than 0.Table 13 Rank of Core ESG Actively Managed
236、 Funds and Performance vs BenchmarkRanking criteria Time range Last six months Last year Last two years Last three years Rank by downside risk Number of funds outperforming the median 20224146Proportion of funds outperforming the median of all core ESG actively managed public funds 35%39%72%81%Rank
237、by information ratio Number of funds outperforming the median 29355656Proportion of funds outperforming the median of all core ESG actively managed public funds 51%61%98%98%Annualized rate of return vs benchmark(fund rate of return-benchmark rate of return)Number of funds outperforming 0 12171110Pro
238、portion of funds outperforming 0 of all core ESG actively managed public funds 21%30%19%18%Annualized Sharpe ratio vs benchmark(fund Sharpe ratio-benchmark Sharpe ratio)Number of funds outperforming 0 17202929Proportion of funds outperforming 0 of all core ESG actively managed public funds 30%35%51%
239、51%Source:WindSpeaking of core ESG passively managed funds,the downside risk rank shows the percentage of such funds that outperformed the median over the past one,two,and three years(but not the past six months)exceeded 70%.The information ratio rank shows that 50%of such funds outperformed the med
240、ian.In Development of ESG InvestingAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|27Source:WindTable 14 Rank of Core ESG Passively Managed Funds and Performance vs BenchmarkRanking criteria Time range Last six months Last year Last two years Last three years Rank by downside
241、 risk Number of funds outperforming the median 11172021Proportion of funds outperforming the median of all core ESG passively managed public funds 48%74%87%91%Rank by information ratio Number of funds outperforming the median 13181821Proportion of funds outperforming the median of all core ESG passi
242、vely managed public funds 57%78%78%91%Annualized rate of return vs benchmark(fund rate of return-benchmark rate of return)Number of funds outperforming 0 161063Proportion of funds outperforming 0 of all core ESG passively managed public funds 70%43%26%13%Annualized Sharpe ratio vs benchmark(fund Sha
243、rpe ratio-benchmark Sharpe ratio)Number of funds outperforming 0 10101414Proportion of funds outperforming 0 of all core ESG passively managed public funds 43%43%61%61%Fig.13 Launch Trends of Core and Broad ESG IndexesSource:Wind2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20221801601
244、400200Core ESG indexes Broad ESG indexes2.2.3 Domestic ESG indexesAccording to ESG development in overseas markets,ESG passive funds represent an important trend for future investment development,and ESG-related indexes provide a necessary angle to observe terms of the rate of return vs p
245、erformance benchmark,70%of the core ESG passively managed funds realized a rate of return above 0 in terms of the Sharpe ratio vs performance benchmark,61%of core ESG passively managed funds in the last two and the last three years,respectively have realized a Sharpe ratio above the median 0.Develop
246、ment of ESG InvestingAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|28Table 15 Major Core and Broad ESG Index IssuersIssuer Core ESG indexes Broad ESG indexes China Securities Index Co.,Ltd.98121China Central Depository&Clearing Co.,Ltd.78144Shenzhen Securities Information C
247、o.,Ltd.639Wind Information Co.,Ltd.2022Hang Seng Index Services Limited 2016National Inter-Bank Funding Center 15Shenzhen Stock Exchange 48ShenYin&WanGuo Index 6Shanghai Stock Exchange 8MSCI index 165Sino-Securities Index Information Service(Shanghai)Co.,Ltd.145Changjiang Securities Co.,Ltd.12China
248、International Capital Corporation Limited 6Sinolink Securities Co.,Ltd.4Xinhua Finance 4Others 1413the capital markets attention to ESG.This research team summarized the number of ESG indicies by searching whether the name of an index included ESG investment as defined by the research team.As of Jun
249、e 30,2022,there were 698 ESG indexes in the market,including 274 core ESG indexes and 424 broad ESG indexes.Both core ESG indexes and broad ESG indexes grew significantly in 2021.Among the core ESG indexes,stock and bond indexes accounted for 58%and 39%,respectively.Among the broad ESG indexes,green
250、 indexes accounted for up to 59%,followed by carbon neutrality and environmental protection-related indexes at 13%and 7%,respectively.The indexes screened by green and carbon neutrality were mainly bond-type indexes,with 85%and 46%of the bond indexes in the two categories,respectively.From the persp
251、ective of issuers,China Securities Index Co.,Ltd.(CSI)and China Central Depository&Clearing Co.,Ltd.(CCDC)were the mainstays.In addition,Wind Information Co.,Ltd.(Wind)and Hang Seng Index Services Limited(HSI)publish more core ESG indexes.Shenzhen Securities Information Co.,Ltd.,Wind Information Co.
252、,Ltd.,Hang Seng Index Services Limited,and National Interbank Funding Center publish more broad ESG indexes.Source:WindDevelopment of ESG InvestingAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|29Total funds raised(RMB 100 million)Number of products launched(Nr.)Source:L(bas
253、ed on launch year)211 21 360 65 697 109Fig.14 Number of Chinese Bank ESG Wealth Management Products Launched and Size of Funds Raised from 2019 to 2022 212 812019 2020 2021 2022/6/302.2.4 Domestic ESG bank wealth management products As of June 2022,according to the latest statistics from L,276 ESG b
254、ank wealth management products were launched domestically and raised over RMB 150 billion.Among them,199 are existing products.In the first half of 2022,81 ESG-related wealth management products were in existence and on sale,1.53 times those as compared to the same period in 2021,which raised approx
255、imately RMB 21.2 billion,up 6.5%YoY.Excluding undisclosed products,products with more than RMB 1 billion AUM accounted for only 3.6%.In terms of market share,as of June 30,2022,Huaxia Bank and its wealth management subsidiary(Huaxia Wealth Management Co.,Ltd.)were the first asset management institut
256、ions to practice ESG and provide ESG wealth management products,and launched a total of 73 ESG bank wealth management products,raising over RMB 43.7 billion.Secondly,Agricultural Bank of China Wealth Management Co.,Ltd.launched a total of 44 ESG bank wealth management products that raised nearly RMB
257、 48.5 billion.In terms of the nature of the wealth managers,most ESG bank wealth management products are offered by wealth management subsidiaries of joint-stock banks,which take 42.9%of the market share of bank wealth management products,followed by state-owned bank wealth management(32.4%market sh
258、are0.Since the end of 2021,foreign banks began to distribute overseas ESG wealth management products in the Chinese market.Among them,Standard Chartered Bank and BlackRock launched their first wealth management products in China with ETF as the main underlying asset,while Citibank had the only ESG w
259、ealth management product in USD in China.In terms of ESG strategy,according to the financial product prospectuses of each bank,ESG wealth management products mainly invest in industries such as green development,clean energy,energy conservation,environmental protection,consumption upgrading,health a
260、nd medicine,rural revitalization,inclusive finance,and support for small and micro enterprises to practice their ESG investment philosophy,which reflects the theme of green upgrading and promoting high-quality economic Development of ESG InvestingAnnual Report on ESG Investing in Chinas Asset Manage
261、ment Industry 2022|30development.Specifically,Chinese banks have explored ESG wealth management products in active,passive,and FOF investments;positive screening,negative exclusion and ESG integration are the most used strategies.In FOF investment,the ESG concept is reflected in the selection of ESG
262、-themed funds and managers.However,the application of ESG investing strategies by various institutions is rarely disclosed in product prospectuses.In terms of asset allocation,65.7%of ESG bank wealth management products are fixed-income assets,and 33.5%are mixed assets.The products come in the form
263、of low to medium risk public offerings.In terms of sales regions,as of June 30,2022,excluding undisclosed products,individual clients make up most of existing ESG wealth management product sales(58.1%),and only 35 existing and on-sale products of rural commercial banks and urban commercial banks are
264、 sold only in specific provinces.Other institutions sell nationwide.2.2.5 ESG-related research of domestic securities companies Securities companies are important service providers in the investment market,their participation in the analysis and processing of ESG information helps account for ESG fa
265、ctors and plays an important role in the ESG ecosystem.By searching research reports with ESG in the title,our research team found 296 market-wide reports as of June 30,2022.According to the year of report release,the number of ESG-related research reports has nearly doubled since 2021(119),and 106
266、reports were released as of June 30,2022.Reports generally classify ESG-related research papers into six types.Among them,ESG investing overview and tracking focuses on ESG invesing and market development trends with 146 related research reports that account for nearly half of all reports.Secondly,t
267、he reports related to ESG strategies and indexes and ESG data and evaluation system account for 15%and 14%,respectively,which indicates the market focuses on the construction of indexes and evaluation systems.ESG and information disclosure,as the basis of ESG rating and investment application,is sti
268、ll a key market concern,and contributes 8%of the reports.Reports related to Substantive discussion of ESG account for 4%,and the specific content of such reports indicates the market has not yet reached a consensus on whether ESG will generate excess returns or how to generate excess returns.Table 1
269、6 Distribution of Topics in ESG-related Research ReportsReport content Number of reports Percentage of reports ESG investment overview and tracking 14649%ESG strategies and indexes 4315%ESG data and evaluation system 4214%ESG analysis of specific industries or companies 289%ESG and information discl
270、osure 248%ESG materiality discussion 134%Source:Development of ESG InvestingAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|31The research team conducted interviews with six securities companies to understand the needs and priorities of securities companies to conduct ESG res
271、earch and their views on the future development of ESG.The main conclusions are as follows.The securities companies conduct ESG research based on shareholders needs,brand building needs,and clients needs.Some researches promote relevant research due to the importance shareholders attach to green fin
272、ance;some conduct ESG research due to a clients commission,index construction,and ESG materiality-related research needs.Clients with demand for ESG research were mainly public funds and private funds initially,and more recently,driven by domestic regulatory policies,social security funds,insurance
273、asset management companies,and bank wealth management subsidiaries have all paid more attention to ESG.The staff at securities companies is classified as either full-time or part-time.Among them,most of the full-time analysts have an education background or experience in climate or environmental stu
274、dies,ESG data,or rating experience.Part-time analysts mainly include quantitative analysts,macro analysts,and strategy analysts,possibly because ESG integration requires consideration of ESG factors from macro,meso,and micro perspectives,as well as quantification and industry fundamentals.Therefore,
275、it is necessary to incorporate ESG considerations in multiple aspects,such as macro analysis,strategy,industry,and quantification.Many securities companies have cooperated with ESG data providers.The indicator mining methods of different data providers vary largely.Therefore,some securities companie
276、s developed their own ESG evaluation systems based on data from different ESG data suppliers.Since the correlation between ESG in active investment and the traditional logic of the industry continues to evolve,securities companies are better at mining key ESG topics based on their understanding of t
277、he industry.It is worth mentioning that securities companies currently pay less attention to ESG scoring on the micro level,possibly because the principles of ESG methodology are still being explored,and no mature methodology has emerged.The securities companies hold different views on future direct
278、ions of ESG research.Some securities companies believe that ESG will not be restrained to the new energy track,and more tracks will see future consideration in ESG-related work.Some believe that ESG indexes will become important performance benchmarks and tracking indicators in the future;however,so
279、me feel that promoting ESG requires a social consensus on ESG issues.III.ESG Data and Weight DesignWith the participation of Dong Lanfeng,Wan Xin and Wang Bo from Yinhua Fund Management Co.,Ltd.in this chapter.ESG Data and Weight DesignAnnual Report on ESG Investing in Chinas Asset Management Indust
280、ry 2022|33The recent and continuous in-depth dissemination of ESG investing in China increased the size and application maturity of ESG investments.In this context,we will examine the materiality of ESG evaluation at the ESG data level based on the ESG infrastructure.Through the classification and d
281、isplay of ESG underlying data and the case analysis of ESG rating indicators,the current status of domestic ESG underlying data is shown,ideas on the use of ESG data are provided,and strongly support ESG evaluation.In the first subsection,by labeling ESG data collected from public sources and drawin
282、g on domestic and international ESG disclosure guidelines,we classified ESG underlying data of the enviornmental(E)dimension into five major categories,13 sub-categories and a total of 39 data categories.The social(S)dimension contained three major categories,ten sub-categories,and 40 categories in
283、total.The governance(G)dimension was broke into two major categories and nine sub-categories(total of 29).In addition,the research team had the following findings:Thanks to the continuous advocacy of relevant national policies,the degree of domestic ESG information release matched the coverage of un
284、derlying data collection.In the context of continued standardization of domestic ESG disclosure,there are signs of convergence in the quality and breadth of data from domestic professional ESG data providers.This convergence was primarily due to public availability,less frequent disclosure of ESG un
285、derlying data,and the maturity of data collection technology usage.Driven by the impetus of national policies and market participants from two directions,domestic ESG data will enter an era of refined development.This report believes that improved overall data richness and comparability of qualitati
286、ve data will refine domestic ESG underlying data with two features:(1)differences in domestic ESG data services will be more clearly reflected in structured data;and(2)due to the different collection and calculation methods,the carbon emission data at the domestic enterprise level will be presented
287、in two different types of data:model estimations and actual enterprise output.In the second subsection,30 representative stocks of CITICs primary industry were taken as samples,and four rating agencies were selected(Wind,MioTech,QuantData,and Refinitiv).This report investigated the initial differenc
288、es in indicator design among multiple ESG rating agencies,and quantitatively compared the degree of divergence among the rating agencies in the weight design of the primary and secondary indicators and the degree of divergence in the weight design among different industries within each rating agency
289、.The main conclusions are as follows:From the perspective of primary weights(Environmental,Social,and Governance),there was no major divergence in the absolute sense in the weight design of different rating agencies for the same stock and its representative industry,while a relative divergence remai
290、ns.For more than half the stocks and the industries they represent,the divergence in the weights of two or more indicators for the same stock and its representative industry given by different rating agencies exceeded the divergence in the average weights for different stocks and the industries they
291、 represent given by rating agencies.Secondly,in terms of the differentiation of individual stocks and the industries they represent within the ESG Data and Weight DesignAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|34same rating agency,there was no absolute differentiation
292、in the weight design of the four rating agencies for industries.Relatively speaking,the greater differentiation of weights among different industries was observed between MioTech and Refinitiv.From the perspective of secondary Environmental and Social(E&S)indicators,the divergence in the design of i
293、ndicators and weights for the same stock and its representative industry widened significantly among the agencies in both absolute and relative senses.The degree of divergence in the weights of the secondary E&S indicators significantly surpassed the primary weights;divergence in the design and weig
294、hts of E&S indicators better explains the differences among rating agencies.In terms of the degree of differentiation between individual stocks and the industries they represent within the same rating agency,the absolute degree of differentiation in the design of E&S secondary indicator weights amon
295、g industries is small among all four rating agencies.However,a relatively large degree of differentiation was observed among three companies:MioTech,Refinitiv,and Wind.Finally,the underlying data shows that state-owned enterprises(SOEs)are leading in ESG disclosure.In 2021,about 48%of SOEs disclosed
296、 their ESG reports,social responsibility reports and the like,higher than 30%,the average level of all A-share listed companies.The leading ESG practices of SOEs will bring significant incremental information for their value judgment and provide guidance for their investment.In the future,the resear
297、ch team will focus on the definition and measurement of ESG evaluation indicators,pay close attention to the ESG data and evaluation system of SOEs,and explore the changes in the benefits brought by the ESG practices of SOEs.3.1 ESG underlying data classificationThe classification of ESG underlying
298、data is the basis for examining ESG materiality.A bottom-up approach was adopted to organize the content of this section based on underlying ESG data available within Huaxia Wealth Management,supplemented by ESG data information obtained from corporates public disclosure reports,government websites,
299、media websites,and other public channels through manual collection/algorithmic operation.Based on this,we first labeled the massive ESG data according to its nature and then presented the underlying data in a classified manner with references to domestic and international ESG disclosure guidelines.I
300、n view of the dispersion of data granularity,only general ESG underlying data obtained as of June 30,2022 was classified,and ESG data with an industry nature was not included.3.1.1 Environmental(E)dimension According to the different data types,environmental(E)dimension data were classified into fiv
301、e categories.The first category is resource consumption data,which refers to data on the consumption of various natural resources,primary and secondary energy,materials,and other resources during business ESG Data and Weight DesignAnnual Report on ESG Investing in Chinas Asset Management Industry 20
302、22|35Table 17 Resource Consumption DataTable 18 Pollutant Discharge DataData category Data type Existing data type Data source Resource consumption data Energy 1.Energy management policy and objectives Corporates public disclosure report 2.Consumption saving through energy management 3.Energy consum
303、ption/cost Water resource 1.Water resource management policy and objective 2.Consumption saving through water resource management 3.Water resources consumption/recovery/costs 4.Type of water source Material resources1.Material resource management policy and objectives 2.Consumption saving through ma
304、terial resource management 3.Material resource consumption/costs Other natural resources such as land 1.Management policy and objectives related to land,wetlands,forests,and other natural resources affected by business of enterprises 2.Consumption saving through management of other natural resources
305、 3.Consumption/cost of other natural resources Data category Data type Existing data type Data source Pollutant discharge dataWastewater1.Wastewater discharge management policy Corporates public disclosure reports;government websites,public news media websites 2.Wastewater discharge reduction 3.Wast
306、ewater discharge Solid waste1.Solid waste discharge management policy 2.Solid waste discharge reduction 3.Solid waste discharge Waste gas 1.Waste gas emission management policy 2.Waste gas emission reduction 3.Waste gas emission The second category is data on the discharge of pollutants produced dur
307、ing business developments,and include wastewater,solid waste,and waste gas.According to data disclosure and the work steps involved in pollutant discharge of enterprises,the data were mainly classified into three types:pollutant discharge management policy,pollutant discharge reduction,pollutant dis
308、charge volume.development.Based on data disclosure and the interactive relationship between enterprises and resources,the data were mainly classified into three types:resource consumption management policy,resource consumption,and resource conservation and consumption.The third category is data on c
309、limate change,which includes data on greenhouse gas emissions and methods used to respond to climate change formed during business development under the topic of ESG Data and Weight DesignAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|36数据来源:慧博climate change.The data are cla
310、ssified as above.According to the status quo of data disclosure,the current GHG emission data mainly focus on the CO2 equivalent of 1&2&3 in the statistical scope,while the data of CH4,N2O,and other GHGs receive little attention.Methods used to respond to climate change relates to the external evalu
311、ation results or business evaluation analysis and goal setting/achievement of enterprises to address the challenges and opportunities brought by climate change.The fourth category is environmental management data,including various types of data related to environmental protection during business dev
312、elopment,and that data are generally dispersed.The fifth category is green financing data,which refers to data related to green and low-carbon financing activities through the financial market.Table 19 Data on Climate Change ResponseData category Data type Existing data type Data source Data on clim
313、ate change response GHG emission 1.GHG emission reduction management measures Corporates public disclosure reports;carbon measurement methods and calculations2.Project/business GHG emission reduction 3.GHG emission/intensity Methods used to respond to climate change 1.Whether it supports the initiat
314、ives of climate-related international organizations/has climate-related ratings Corporates public disclosure reports;official websites of relevant international organizations 2.Specific content of disclosure regarding climate change risks and opportunities Table 20 Environmental Management DataData
315、category Data type Existing data type Data source Environmental management data Environmental violations and penalties 1.Number/amount of environmental penalties Corporates public disclosure reports;government websites,public news media websites 2.Number of negative environmental incidents and viola
316、tions/severity Environmental management systems and plans 1.Environmental protection-related systems and measures 2.Environmental protection-related emergency plans Positive environmental measures 1.Environment-related certification 2.Amount of investment in environmental protection 3.Environmental
317、protection innovation in business process 4.Environmental protection innovation at the product level 5.Number of activities to protect the environment 6.Activity resultsTable 21 Green Financing DataData category Data type Existing data type Data source Green financing data Green financing capacity 1
318、.Types/number of green financing transactions Corporates public disclosure reports;websites related to national public trading and registration and settlement2.Amount of green financing ESG Data and Weight DesignAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|37Table 22 Emplo
319、yee Responsibility DataData category Data type Existing data type Data source Employee responsibility data Employee treatment 1.Employee remuneration policy Corporates public disclosure reports;public news media websites 2.Daily welfare policies for employees,including:(2.1)Leave/maternity policy(2.
320、2)Working hours policy(2.3)Policies for employees to participate in trade unions and other organizations(2.4)Employee suggestion and feedback/satisfaction survey mechanism(2.5)Policy on promoting female employment 3.Number of regular/temporary employees 4.Number of minority employees 5.Number of emp
321、loyees recruited/dismissed 6.Violations of labor rights under the Labor Law of the Peoples Republic of China 7.Negative mass incidents involving employee protests Career development of employees1.Employee training/promotion/incentives/equal employment policy Corporates public disclosure report 2.Com
322、pany diversity and inclusion policy 3.Training time per capita 4.Per capita revenue/profit generated 5.Number of shares held by employees Employee health and safety 1.Safety and health-related management policy and objective Corporates public disclosure reports;government websites,public news media
323、websites 2.Implementation of safety and health-related management policy and objective 3.Safety management system certification 4.Amount invested in safety and health 5.Number of safety accidents 6.Number of injuries/deaths in safety accidents 3.1.2 Social(S)dimensionAccording to the different data
324、types,social(S)dimension data sort into three categories.The first category is employee responsibility data formed based on the rights and obligations of employees(workers who establish a labor relationship with the enterprise)during business development of an enterprise.The data disclosure content
325、and the labor relationship between employees and enterprises breaks down into three different types:employee treatment,employee career development,and employee health and safety.ESG Data and Weight DesignAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|38The second category is
326、 the data related to product responsibility generated in practicing social responsibility.Data disclosure and the product liability scope breaks down into:product quality and safety,product innovation,and consumer-side and supplier-side product liabilities.The third category is the data on community
327、 and regional responsibilities undertaken by enterprises while practicing social responsibility.Data disclosure and the content of community and regional responsibilities sorted the data into three types:community development,public welfare and charity,and national strategic planning.Table 23 Produc
328、t Liability DataData category Data type Existing data type Data source Product liability data Product quality and safety 1.Product quality and safety management system and measures Corporates public disclosure reports;government websites,public news media websites 2.Product quality system certificat
329、ion 3.Data information security management system and measures 4.Product quality and data information security violations/negative incidents Product innovation 1.Product R&D innovation management system 2.Number of product R&D and innovation personnel/investment amount 3.Product R&D innovation award
330、s 4.Number of intellectual property rights/patents for product R&D Consumer rights 1.Consumer management policy and system 2.Number of consumer complaints/processed incidents 3.Consumer satisfaction results 4.Consumer privacy management Supply chain management 1.Supplier management policy and system
331、 2.ESG and other standard certifications passed by suppliers 3.Number of suppliers/scale of business 4.ESG negative incidents/violations of suppliers Table 24 Social Responsibility DataData category Data type Existing data type Data source Social responsibility data Community development 1.Types/num
332、ber of projects to promote community development Corporates public disclosure reports;public news media websites 2.Amount of investments to promote community development Public welfare and charity 1.Number and amount of charitable donations 2.Number/work hours of employees involved in public welfare
333、 projects National strategic planning 1.Response to national strategies such as targeted poverty alleviation and rural revitalization 2.Results of response to national strategies such as targeted poverty alleviation and rural revitalization ESG Data and Weight DesignAnnual Report on ESG Investing in Chinas Asset Management Industry 2022|39Table 25 Governance Structure DataData category Data type E