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: SASAC of the State Council promotes central enterprises to fully perform their responsibilities, and requires the management level to clarify ESG working departments, posts and responsibilities. First, we should do more ESG governance of enterprises from the top. Build an ESG key index system in line with the characteristics of Chinese enterprises. Establish ESG working departments, posts and responsibilities from the management level, incorporate ESG into performance appraisal, and form a complete organizational structure. Second, we should speed up the construction of ESG evaluation system. Reverse export China’s green development concept and let overseas understand the progress of Chinese enterprises in green development, social responsibility and corporate governance. Scientific guidance for small and medium-sized enterprises on zero carbon emission reduction: the Chinese version of the international zero carbon emission reduction standard is published. The release of the Chinese version is conducive to the majority of small and medium-sized enterprises that lack practical guidance tools at the end of the supply chain, and help them first clearly understand the international standard of enterprise net zero carbon emission. It is expected that more Chinese enterprises will sign and actively formulate a net zero carbon emission reduction target based on climate science.
Sustainable investment and financing: as of April 29, 2022, the cumulative returns of CSI 300esg and CSI 500esg benchmark indexes since July 2017 are 2.63% and 8.05% higher than the parent index respectively. Recently, the downward trend of CSI 500esg index is obvious. From the industry composition of the index, 58% of the constituent stocks in the CSI 500esg benchmark index belong to the manufacturing industry. Affected by the recurrence of covid-19 epidemic, they are facing the dilemma of shutdown. The market is pessimistic about the resumption of work and production. However, the performance of 500esg is still stronger than the parent index, indicating that in dealing with risks, screening based on ESG governance still has important value.
Analysis of sustainable supply chain in key industries: mineral mining is a labor-intensive process, involving potential social conflicts and environmental risks. If it is not managed properly, it may cause lasting negative effects. A growing number of studies suggest that these significant risks may be related to tin (SN), tungsten (W), tantalum (TA) and gold (AU), as well as other rare and precious metals and minerals. Governments, non-governmental organizations (NGOs), investors, customers and other industry stakeholders have increasingly high expectations for the private sector to promote responsible behavior into its supply chain. The responsible minerals Initiative (RMI) came into being.
Risk tips: 1 The promotion of ESG policies outside China was less than expected; 2. The macroeconomic downturn exceeded expectations.
