Liu Junwei, the chief of Gold Gonggong, CICC: The current situation, strategy application and latest trend of asset owners invest in ESG

21st Century Business Herald reporter Wang Yuanyuan Shanghai report

On August 30th, the second phase of the second phase of the series of Director's Directors of the 21st Century of the Southern Finance and Economics Forum was officially held.

Liu Junwei, chief analyst and executive general manager of CICC (601995.SH) Research Department, attended the meeting and introduced the current status, strategy application and latest trend of asset owners to invest in ESG.

Liu Junwei said that, as one of the subject of ESG investment, the ESG investment and management of asset owners has always been a very noticeable topic. ESG investment has the characteristics of long -term returns, low potential risks, and promoting sustainable development. It is compatible with the concept of social benefits and long -term value of asset owners.

"Today, I will introduce it from three aspects, which includes the current status of ESG, the application of strategies, and the latest trend of the asset owner." Liu Junwei said.

What is an asset owner? According to the definition of the United Nations UN-PRI, the owners of assets mainly include four categories: pension funds, sovereign funds, insurance and family offices. Among them, pension funds and sovereignty funds are the subjects in all the assets. For example, like a very famous Japanese GPIF. The management scale of asset owners is relatively large in terms of ESG investment.

In terms of the status quo of ESG investment in asset owners, from the global perspective, ESG investment in different sizes of asset owners has some obvious differences.

First of all, the head of the head is very concerned about itself, especially some companies that are ranked at the top, and the proportion of UN-PRI is relatively high. But overall, from some questionnaires made in the past three years, we can observe that the coverage of asset owners to ESG needs to be improved. In fact, whether it is the United States or Europe, everyone's ESG maturity is generally low. Whether it is ideas to strategy to the landing of products, they are facing the situation of opportunities and challenges to coexist.

ESG investment focusing on the asset owner of China. Liu Junwei said that we currently believe that it is still in a stage of exploration. However, with the proposal of carbon peaks, carbon neutrality, and targets, domestic institutions are accelerating. Whether it is pension, sovereign funds, including insurance, in fact, there are more attempts in ESG investment and time. It is particularly concerned about the actions of pensions and sovereignty funds. In the field of insurance, it is more focused on green finance and green insurance, and the investment in ESG is relatively smaller.

In terms of the strategy and application of asset owners, it is mainly observed from three aspects: direct investment, passive investment, and foreign investment.

Liu Junwei said that in the active investment in direct investment, integration, participation in corporate governance and negative screening are relatively high, which is different from the ESG investment strategy of the entire asset management industry. In the entire asset management industry, integration, negative screening and participating in corporate governance, their rankings are relatively different, focusing differently.

For example, in the entire asset management industry, the proportion of participating in corporate governance is not particularly high. However, among the specific groups of asset owners, we find that participating in corporate governance has become a way to adopt and adopt asset owners in ESG investment practice.

In terms of passive investment, we will find that ESG -related index products are also strengthened and applied with ESG. There may be two reasons behind:

The first is that with the increase in market transparency and effectiveness, the impact of macro trends such as climate risk and geopolitical conflict on the market has increased on the market. However, these years, the impact on individual stocks is not very clear. In other words, a class of stocks. Therefore, ESG's passive investment and theme investment have become more concerned.

The second is asset ownership. Its volume and capital volume is often relatively large, and the scope of asset allocation is relatively wide. Therefore, the configuration and investment of ESG -related index products is a relatively common trend. For example, Japan's GPIF has established a set of ESG index assessment standards. According to this set of evaluation standards, seven ESG passive index products have been selected. In the past four years, its income is better than the market.

Liu Junwei said that we can see that during the investment process of the entire asset owner, in addition to increasing the consideration of performance in active investment strategies, it is also common to passively through ETF and passive index products.

Finally, as an owner of assets, there is a relatively large difference with ordinary asset managers, which is outsourced investment. For example, my country's social security, including well -known asset owners in the world, will put some funds, even as high as 40%to 50%of funds to manage the way of entrusting external managers. Therefore, for these asset managers, how to choose is a very important process. In order to help the asset owner incorporate ESG into the management process of outsourced investment, UN-PRI has developed a corresponding guide, including five steps to help the asset owner to do this.

Liu Junwei said that according to the survey, we will find that in the selection process of external managers, the focus of assets mainly includes four aspects: first, whether it is the sign of the UN-PRI; Specific personnel are responsible for their own work; the third, at the level of investment portfolio, is there any disclosure of carbon emissions of the combination; fourth, in the process of the entire asset management process, is there any explanation of shareholders' participation in corporate governance. In addition, the current trend of ESG investment in asset owners is also worthy of attention. Liu Junwei believes that there are the following trends:

The first major trend, climate change, climate risk, is currently a focus of global attention. Asset owners have continued to rise because of their attention to climate change, and their attention to investment. However, in the context of global inflation in 2022, the performance of ESG products declined compared to the previous two years. From 2020 to 2021, the global ESG products have performed very well in the past two years, basically surpassing the market benchmark, which has also brought a lot of funds into these products. But this year, with the background of global inflation, coupled with the energy crisis, some traditional energy industries have performed well. Therefore, the performance of ESG products has declined compared to the previous two years, and the doubts about ESG in the market have also fluctuated.

Although we see that asset owners pay close attention to ESG investment, this is a trend. However, in the formulation and application of ESG standards, the integration and exclusion of key issues, and international competition and cooperation, they still need to explore and improve.

The second major trend, for the Chinese market, ESG has also been a very hot topic in the past two years.

There are two big backgrounds: the first is the proposal of the "double carbon" goal of carbon peaks and carbon neutralization. It is very helpful for the public to understand ESG and further understand ESG. We can see that in the past two years, everyone has a lot of discussions about ESG, carbon neutrality, and "double carbon" goals. Secondly, the concept of high quality development and new development in China will also help the development of the entire market ESG.

We can see here that Chinese asset owners are also doing something very detailed and cutting -edge. For example, the Sustainable Development Investment Policy of CIC, whether it is to seize the opportunity of sustainable development themes, or in the investment process, the consideration of ESG, and the establishment of a negative list, etc. are all in the entire CIC company. During the investment process, the concept of "double carbon" goals and high -quality development is constantly incorporated into the governance and management process of the entire company.

Therefore, the second new trend of asset owners in China is from the "double carbon" goals and high -quality development of the two major times.

The third big trend is that in the Chinese market, ESG's future prospects are very broad. There is also a very core reason that the impact of aging on my country is gradually increasing.

Liu Junwei said that this year we can see that the construction and development of the third pillar system of the elderly has taken some substantial steps. We all know that the proportion of the third pillar in the American pension system is very high. And the third pillar has a great promotion effect on various products in the entire financial market. Therefore, we believe that with the construction of China's third pillar system, China's pension management scale will rise further. In addition to social security, in the future, our pensions still have room for further scale.

"As one of the most important subjects of asset owners, we think that ESG investment has always been in line with the investment of pensions. Therefore , Thus driving ESG investment to further take root and germinate in the practice of asset owners. "Liu Junwei said.

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