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ESG China Fireside Chat | How Southern Asset Management in China is Incorporating ESG

November 25, 2020

SHANGHAI, CHINA – New Energy Nexus is thrilled to launch ‘ESG China Fireside Chat’ with China Southern Asset Management, one of the first and largest asset management firms in China with a steadfast commitment for incorporating (Environmental, Social, Governance) ESG practices in their investment strategies and business operations. With over USD 180 billion in assets under management (AUM), Southern Asset Management has been an industry leader in managing portfolios that include mutual funds, social security, corporate annuity and high net-worth clients. In 2018 Southern Asset Management became a signatory to the United Nations Principles for Responsible Investment (UNPRI) joining a coalition of asset owners and asset managers with over USD 90 trillion in AUM to help further promote ESG investments across industries and to build a standard evaluation framework for companies.

The ‘ESG China Fireside Chat’ series aims to interview both innovators and trendsetters from the international investment ecosystem that demonstrate measurable ESG or corporate social responsibility (CSR) practices. Through comprehensive discussions of these ESG practices and toolkits, investors and corporates alike will be able to better understand what the key components are to successful ESG investing. These sessions will be mutually beneficial to investors looking to mitigate risk and invest in ESG companies, while also beneficial to underlying fund companies demonstrating strong CSR values who are looking to raise institutional capital.

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Timing is everything. In 2018, according to the Global Sustainable Investment Alliance global sustainable investment amounted to USD 30.68 trillion. In the US, approximately USD 24 billion flowed into ESG-focused funds as of July 31, which already surpasses the calendar-year record of USD 21.4 billion set in 2019, a number four times the 2018 total. These metrics imply that more capital will flow into ESG solutions in 2020 than the prior 3 years combined.

 

“By August 31 this year, the total market value of our investment in renewable energy stocks has exceeded RMB 18 billion (USD 2.75 billion), accounting for more than 5%. The proportion of pollution-related stocks has also dropped significantly from 7% at the end of 2016 to about 2.6% at present. In the past few years, ESG has been very effective in directing funds towards sustainable development,” says Wu Zengtao, Chief Marketing Officer of Southern Asset Management. 

Southern Asset Management has developed a four ESG-tier investment strategy including:

  1. Negative Screening – Companies that have a low ESG score or don’t meet the ESG selection criteria may be excluded from getting listed.

  2. Positive Selection – Companies with high ESG scores with reputable corporate social responsibility are “preferred” investments

  3. Active Ownership – Southern Asset Management actively engages with stakeholders and shareholders of their sustainable business practices.

  4. ESG Integration – Southern Asset Manangement’s investment philosophy is long-term, value-based and responsible which translates into steady and sustainable returns

 

The video interview with Southern Asset Management’s Chief Marketing Officer Wu Zengtao is the first episode of ‘ESG China Fireside Chat’ series. 

 

China Southern Asset Management

Southern Asset Management (southernfund.com) was officially established in 1998 as one of the first domestic asset management companies approved and regulated by the China Securities Regulatory Commission, which symbolizes the start of the nation’s “New Golden Era for Funds”. It has integrated ESG principles into business operation and investment process. In June 2018, Southern Asset Management became a signatory to Principles for Responsible Investment (PRI). Meanwhile, as a member of the council of China ESG Leaders Association, Southern Asset Management works with other business leaders, promoting ESG investment in China. 

New Energy Nexus

New Energy Nexus (newenergynexus.com) is a non-profit international organization that strives towards an abundant world with a 100% clean energy economy for 100% of the population in the shortest time possible. To achieve this goal, we support diverse clean energy entrepreneurs with funds, accelerators, and networks. We started in California and now operate programs in New York, China, India, Southeast Asia and East Africa.

 

Media Contact

Andrew Chang – andrew.chang@newenergynexus.com