Building an ESG Smart Evaluation System with Chinese Characteristics Ping An actively promotes the development of responsible investment

The author | Ke Yi

On June 22, at the sub-forum of the 2020 Caixin Summer Summit - "Registration System Reform and ESG Information Disclosure and Evaluation of Listed Companies", Sheng Ruisheng, Secretary of the Board of Directors and Brand Director of Ping An of China, delivered a keynote speech, which introduced the responsible investment system of Ping An of China in detail. Adhering to the dual identity of "responsible asset owner" + "technology product provider", Ping An has built an ESG investment management system integrating "tao, control, instrument and thing", and created a systematic, intelligent and practical CN-ESG smart evaluation system with Chinese characteristics, which is conducive to helping Chinese enterprises improve the level of ESG information disclosure, and can also play a reference role for investor decision-making, and promote long-term stable investment and sustainable development of the industry.

Sheng Ruisheng said that ESG is in the ascendant in China. As a pioneer of ESG in China, Ping An has gained first-mover advantages in the field of ESG in terms of methodology system, financial investment business practice, and product tools. Looking forward to the future, Ping An will continue to do a good job in its ESG strategy and investment practices, while adhering to an open attitude, actively serving the society and empowering the industry.

<h4>Adapt to the medium Chinese environment to build a CN-ESG intelligent evaluation system</h4>

At this forum, many experts pointed out that although the ESG information disclosure rate has been improving, the scope and quality of ESG information disclosure of Chinese companies still lag behind other major capital markets. The reason is that Chinese enterprises started late at the ESG data disclosure level, and the management system needs to be improved. In addition, the ESG information disclosure and evaluation standards are not uniform, and the ESG rating of the same company is quite different, which is difficult to provide feasible insights for enterprises, which is not conducive to helping enterprises improve ESG performance or make investment decisions.

Sheng Ruisheng said that to solve the above problems, it is necessary for regulators and industry associations to issue relevant guidelines or guidelines, as well as the participation of enterprises, investors and other parties to use technical means to break the situation. Ping An actively promotes the development of ESG and builds a systematic, intelligent and practical CN-ESG intelligent evaluation system with Chinese characteristics.

It is understood that ping an CN-ESG system contains three modules: general indicators, industry matrix, and public opinion adjustment, including four dimensions: environmental E (Environmental), social S (Social), governance G (Governance) and industry characteristic business B (Business). The CN-ESG system sorts out the compliance disclosure requirements of domestic ESG such as the Hong Kong Stock Exchange and the Shanghai Stock Exchange, and integrates into the core issues of the overseas MSCI and DJSI evaluation systems, and is compatible with the current existing domestic systems, and has both local and international perspectives in the information, standards and indicators disclosed by ESG, which can meet the needs of many parties. On the one hand, Ping An's CN-ESG system can help enterprises deeply understand and improve their own ESG performance and improve the level of ESG information disclosure; on the other hand, the system helps to eliminate ESG risks, tap the company's new value, provide information supplements for investment decisions, and identify industries and companies with more investment value.

<h4>Focus on long-term development and build an ESG investment management system of "road, control, device and thing"</h4>

Sheng Ruisheng said that under the new crown epidemic, the global capital market has been impacted many times, but ESG theme investment has shown good pressure resistance and is more favored by investors. Ping An of China selected ESG-friendly industries such as technology, medical care and environmental protection in the CSI 300, comparing them with unfriendly industries. The analysis found that the yield of ESG-friendly industries during the epidemic period was significantly 54 percentage points ahead of the benchmark, while the unfriendly industries were significantly behind the benchmark by 53 percentage points, reflecting the increasingly significant impact of ESG on the mainstream domestic market.

As the first asset owner in China to sign the UN Principles for Responsible Investment, Ping An focuses on long-term sustainable development. As of the end of 2019, Ping An's insurance capital investment scale reached 3.22 trillion yuan. Through professional financial products and services, it is the fundamental mission of Ping An of China to fulfill its ESG responsibilities by promoting the development of the industry and society to be resource-friendly and socially friendly, and to better empower the society.

To this end, Ping An of China has established an ESG-driven responsible investment system that integrates "tao, control, instrument and thing". "Tao" means to implement the values of responsible investment according to the principles of responsible investment formulated; "control" represents the integration of environmental and social risks into the risk management system of the group; "instrument" provides intelligent tools and data support for the development of ESG investment management tools; "things" means to fully integrate ESG theory with investment portfolios and carry out comprehensive application practice at the business level.

Driven by the four-in-one responsible investment system, ping an investment in green products reached RMB51.245 billion and RMB903.204 billion in social inclusion in 2019. Ping An's outstanding performance in responsible investment has been widely recognized by investors and international rating agencies. Earlier this month, Ping An of China won the "Best ESG Investment Institution of the Year - Insurance Category" award issued by the international professional financial magazine "The Asset" for two consecutive years, and was included in the 2019 Dow Jones Sustainable Development Emerging Markets Index, the Hang Seng National Index ESG Index, cdp and other ratings ranked first among China's financial enterprises.

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