Preface
ESG (environmental, social and Governance) is an investment concept that focuses on corporate environment, social responsibility, environmental protection and sustainable development rather than just financial indicators, covering multiple dimensions such as ESG information disclosure, rating and investment. It aims to promote the company to integrate external factors such as social and environmental governance into the internal business management of the enterprise, reduce risks, give full play to the social responsibility of the enterprise and realize the greater value of the enterprise. The research and innovation Department of Huabao securities aims to track the ESG field for a long time, release the ESG high-frequency signal, create research results in the ESG field, explore the index quantification method of China’s ESG evaluation system, and help industrial enterprises and investors have a deeper and comprehensive understanding of the ESG evaluation system, ESG information disclosure and ESG investment.
Research viewpoint
ESG event focus: China Securities Regulatory Commission issued new regulations to strengthen ESG information phi. On April 15, the CSRC issued the guidelines on the management of investor relations of listed companies (hereinafter referred to as the guidelines), which will come into force on May 15, 2022.
Comments: the changes in regulatory rules represent the market demand and the expectations of regulators. The guidelines issued this time clarify that the company’s environmental, social and governance information and corporate culture construction are as important as other legally disclosed information. They are an important part of the communication content of investor relations of listed companies, marking that the management of investor relations of listed companies will reach a new level, It is also a progress in the construction of high standard market and the improvement of supervision and governance. With the continuous improvement of investors’ requirements for ESG information disclosure of listed companies, the improvement of ESG ability and performance of listed companies will help listed companies win more trust and favor of value investors and enhance the international image of China’s capital market.
Sustainable investment and financing: as of mid April 2022, the cumulative returns of CSI 300 ESG benchmark index and CSI 500 ESG benchmark index since July 2017 are 2.17% and 6.44% higher than the parent index respectively. Among the latest constituent stocks of the two indexes, 78.72% and 49.75% of the listed companies have taken clear carbon emission reduction measures, which are higher than those of CSI 300 and CSI 500 index respectively, It reflects the excellent performance of ESG benchmark index relative to the parent index in ESG.
ESG management analysis of key companies: Schneider Electric – a global benchmark in the field of sustainable development. Schneider is also the darling of many authoritative ESG rating agencies. In 2020, the group won the ecovadis platinum Medal (top 1%). For the tenth consecutive year, the group was rated CDP climate change a, AAA by MSCI, low risk by sustainalytics, and leader in the electronic components and equipment industry by DJSI. From the perspective of governance structure, practice framework, strategy formulation, performance evaluation and information disclosure, this paper comprehensively analyzes Schneider Electric’s sustainable development practice, so as to provide reference for Chinese enterprises interested in making achievements in the field of sustainable development.
Risk tips: 1 The promotion of ESG policies outside China was less than expected; 2. The macroeconomic downturn exceeded expectations.
