SHANGHAI, Sept. 15, 2023 /PRNewswire/ — 2023 ESG Global Leaders Conference was held at the Greenland Bund Center in Huangpu District, Shanghai from September 13 to 15, with the theme of “Sustainable economic growth, social development, and environmental protection”. The Conference was hosted by Sina Finance and CITIC Press Group, cohosted by LaoFengXiang, and specially supported by Shanghai Municipal Commission of Economy and Informatization and Huangpu District People’s Government.
At the conference, scholars, entrepreneurs, financiers and professionals from around the world discussed how to promote sustainable development through the implementation of ESG strategies. Ms. Christina, managing director of the International Monetary Fund, sent a video message of congratulations to the conference.
ESG Road and the Future of Mankind
Tu Guangshao, executive director of Shanghai Advanced Institute of Finance and co-chairman of the ESG Leaders Association Forum, pointed out that it is necessary to promote domestic and international exchanges and interactions in the development of ESG. He said that sustainable development, including ESG, is a common task and shared demand of the whole world, and also need global joint efforts to promote.
In Tu Guangshao’s view, on the one hand, in the process of developing ESG and sustainable development, China can learn more from international best practices. At the same time, in the process of promoting ESG and sustainable development, we will also contribute Chinese wisdom, such exchanges and interactions are particularly important at present and in the future. He suggested that we should participate more in the formulation of international standards and form a Chinese ESG system that combines international trends and basic norms with Chinese characteristics.
Kevin Kelly, founding editor of Wired magazine and author of The Next 5000 Days and Excellent Advice for Living and and Liu Jun, president of Bank of Communications, discussed the future of human’s sustainable development. In KK’s view, the three pillars of ESG should be thought of from a technical perspective: the first is globalism, the second is inclusiveness, the third is long-termism, and technology is the most important force for change in the world.
“Build a clock inside a mountain and it will last for 10,000 years. To make it last for three generations, how can we do that? If we just consider the present and don’t care about what the world will be like after death, we probably can’t build such a clock”, said KK when talking about a prior project.
He said that there will be many changes in the future, and things such as policy, economy, business, will develop slowly in the future, which is the part of what ESG has to think about now. “Also from an ESG perspective, we need to take a long-term view, to understand the future better, and to gaze with a longer and slower vision.”
In KK’s argument that future society is protopia (progress + topia), the implication is: Tomorrow might not be as perfect as we imagine, but it will be slightly better than today. As he said, “If we accumulate a little bit progress and positive energy every year, such protopia can be achieved, and ESG can help us get there. By taking one small step forward each year, we can take a leap in the future.”
What’s the Role of Green Finance in ESG?
In Liu Jun opinion, the concept of green finance is still expanding. Systemically important financial institutions around the world offer a wide range of ESG financial products. The continuous improvement of global standards for sustainable development boosted ESG financial practices. At present, China insists on actively promoting the development of transformational finance and climate investment, and regards them as important supplements to green development.
Liu said, “Financial institutions should strongly support the development of green technology. From the perspective of what we should do, finance is a value exchange across time and space, which is essentially to guide the allocation of resources to key areas. Thus, we should support innovation in green technology. In view of what we can do, in addition to offering conventional lending services to traditional green industries, financial institutions can also create innovative models to provide solutions for the full life cycle of green science and innovation enterprises.”
Tu Guangshao spoke specifically about promoting the interaction between companies of the real economy and the financial services system in ESG development. He said that to achieve carbon neutrality by 2060 requires a huge amount of capital investment in such aspects including rural revitalization and regional coordinated development. Therefore, the financial system needs to provide more financial resources for enterprises for ESG practice.
Tu said, “In turn, to meet the requirements of sustainable development of the financial system, we must continue to deepen the function of the system. As enterprises invest in ESG and sustainable development, the financial system on the one hand can provide support for the real economy, on the other hand can open up a broad space for the development of itself. Thus, it is necessary to promote the interaction between the ESG practice of the real economy and the ESG investment finance of financial institutions.”
Liu cited an old Bobby McFerlin song that says, “In every life we have some trouble, when you worry you make it double.”
He said, “Let us follow the road of green economic development, accelerate the pace of green technology innovation, plus the effect of green finance empowerment, and continue to move forward to the future vision. It’s like the song’s name Don’t Worry, Be Happy.”
ESG and High-quality Development of Real Economy
Li Yangmin, president of China Eastern Airlines, said in his speech that in terms of carbon reduction, China Eastern Airlines has done a lot of work, including route optimization, taking an active role in the carbon market mechanisms, promoting the construction of the carbon market in the civil aviation industry, exploring sustainable fuels, implementing full life cycle carbon integrated flights, and developing and manufacturing aviation special vehicles and equipment. China Eastern Airlines is also the first to use sustainable fuels, in terms of passenger privacy and data security, the company has passed the international information security standards and national service management system verification, and is the first domestic civil aviation enterprise to pass the ISO international dual certification.
He suggested that it is necessary to establish and improve a set of ESG evaluation system with Chinese characteristics that meets the needs of “Chinese modernization” as soon as possible, with modernized concepts, Chinese standards, international system and transparent evaluation.
“CRRC has already reached its carbon peak in 2018.” Sun Yongcai, chairman of CRRC, said that CRRC rail transit equipment series products, represented by the Fuxing EMU, generally have the characteristics of large volume, low energy consumption, less emissions and less pollution. Based on the whole industrial chain, the whole value chain, the whole life cycle and the whole process, the “carbon peak” and “carbon neutral” action plans have been issued and implemented. We will strive to achieve carbon neutrality in operation by 2035 and in the whole industrial chain by 2050.
Wang Guoquan, deputy general manager of CITIC Group, said that CITIC will actively explore the paths of integrating ESG into Chinese enterprises, and lead more Chinese enterprises to realize all-round transformation of governance system, management capacity, development model and performance evaluation with ESG as the starting point. It will help accelerate the improvement of China’s ESG policy system disclosure standards, practice guidance and evaluation methods, to create long-term value for Chinese enterprises and create new advantages and new momentum.
Liu Yonghao, chairman of New Hope Group, said that New Hope will integrate ESG into the daily operation and business process, and continue to mobilize upstream and downstream partners in the industrial chain to participate, to achieve sustainable development of enterprises, society and the environment. “We have united 21 large grain consumption entities to form a grain saving consortium. We hope that our joint efforts will contribute to food conservation and make our due contribution to the protection of the social environment.”
Nan Cunhui, member of the Standing Committee of the CPPCC National Committee, President of Zhejiang Business Association and chairman of Chint Group, pointed out that the practice of ESG concept will bring new requirements for business content, development strategy, management style, performance evaluation and governance system, and help realize the organic unity of shareholder value, commercial value, social value and relevant values, and thus provide protect for enterprises to achieve green innovation and high-quality development.
“The fact that ESG can be universally recognized and valued around the world, is fundamentally a matter of development concept. As for enterprises, there are two kinds of development concepts, one is profit maximization as the center, and the other is sustainable value as the center.”said Ding Xiongjun, chairman of China Kweichow Moutai Distillery (Group) and Chairman of Kweichow Moutai. He said that Moutai adheres to the construction of mountains, forests and micro life community, actively implements the “dual carbon” action, invests 50 million yuan annually for the ecological protection of Chishui River, and donates 100 million yuan annually to the public welfare activities of China Moutai Pillars of the Country for 12 consecutive years.
Wang Shi, founder of China Vanke Group and Destone Holdings LLC, said carbon neutral communities will be representative in the future. “We expect to develop different types of carbon neutral communities in Qingdao, Zhengzhou, Ordos and Xinjiang next year, some of these are 10 square kilometers, some 0.5 square kilometers, and some 5 square kilometers. In any case, it is operated under commercial model. It’s better to have subsidie, but without it we should still go forward..”
Jia Shaoqian, chairman of Hisense Group, said that the premise of doing ESG well is long-termism and the key is to lead by technology. To do ESG well with long-termism needs endurance, and the fundamental of it lie is altruism and win-win.
Zhang Yuliang, Chairman and President of Greenland Group, said that enterprises should take gradual steps to improve and perfect their ESG practices, which have broad prospects. He suggested to establish a unified standard and system at the national level, and give priority to expanding the scope of ESG participation among listed companies. In the process of ESG practice, enterprises should be encouraged appropriately, and we should also vigorously develop third-party institutions specialized in ESG evaluation.
Tang Liang, vice chairman of All-China Federation of Industry and Commerce and chairman of Aosen Group, said that in essence, the ESG evaluation system redefines the boundary between enterprises and the market, encourages enterprises to create greater value for society with the help of the market, and promotes economic and social progress and sustainable development.
Zheng Hongmeng, Chairman and CEO of Foxconn Industrial Internet Co., Ltd.., said that the emphasis on ESG by enterprises has been greatly improved compared with the past. In particular, the promotion of ESG has made enterprises more effective and more obvious in the application of new technologies, large-scale applications, transparency, flexibility and resilience of responsibility supply chain, control and cultivation of talent echelon, etc., and created a different ESG business value.
Zhu Jiangming, founder, chairman and CEO of Leap Motor, introduced that the company has set four environmental management targets for ESG, including energy saving targets, water saving targets, emission reduction targets and waste reduction targets, hoping to achieve a waste reduction target of 5%-10% within five years.
In the keynote speech of “China’s Carbon Future”, Zhu Yufeng, president of GCL-CSG Group Holdings Limited, said that GCL-CSG has integrated ESG concepts into the whole process of research and development, production, sales, channels, customers, investor relations, partnerships and so on, and promoted the construction of a green and low-carbon ecosystem based on ESG concepts. “Enterprises must practice ESG if they want to pursue long-term principles. For green and low-carbon enterprises such as GCL-CSG, ‘going green’ with all their efforts is the biggest ESG.”
Yao Jinli, chairman of Meijin Hydrogen Energy Technology, said that the road traffic sector, especially commercial vehicle models, has a significant responsibility to achieve the double carbon target, and there is also much to do. Li Hualun, chairman of Zhuque Equity Investment Management Co., Ltd., believes that ESG investment will certainly promote the growth of a new generation of entrepreneurs and create greater well-being for society.
In the keynote speech “ESG Enhances Corporate Social Value”, Xie Chang‘an, CEO of PepsiCo Greater China, said that every enterprise and individual has the responsibility to actively participate in the construction of ESG, and work together to achieve sustainable and high-quality development. Su Qingcan, chairman of Huaxia Eye Hospital Group, said that providing affordable and accessible medical resources to residents is crucial, which is also a problem that the medical industry must face and solve in the future. Sun Xi, founder and CEO of ESGuru in Singapore and chief ESG consultant of Menglang, said that ESG is not a special medicine that can produce immediate results, but a health care product that needs to work for a long time.
The Development of ESG Standards and How to Enhance Potential
At Venue A, Chen Kai, chairman, Greater China CEO and global management committee of EY China, said that Chinese enterprises should actively formulate action plans to continuously improve the quality of ESG information in terms of the indicators and targets of risk management on the governance strategy. They should also prepare comparable and verifiable ESG data, in response to stricter disclosure requirements, as well as the upcoming ESG information authentication work requirements.
Jiang Ying, President of Deloitte China, stressed that we should focus not only on economic benefits but also on the entire transition process. She hoped that fair transition can cover the maximum social and economic benefits, truly realizing people first.
“What we should do is not to emphasize the localization of international standards, but the internationalization of Chinese practices”, said Feng Wen, Ph.D., managing director of Morningstar China.
Wang Xiaoshu, head of APAC ESG & Climate Research, MSCI, said that climate change will bring about the largest reconstruction of the global economic model since the Industrial Revolution, in which hide ample transition opportunities, while enterprises that lag behind are at risk. More and more large institutional investors are taking ESG into considerations when making investment decisions.
Mark Wang, deputy chairman, president and CEO of HSBC Bank (China) Company Limited said that banks need to develop their own near-zero emission plans in which the most important point is to gradually lower banks’ investment and financing emissions, namely the total emissions generated from customers and projects funded by banks, to net zero. As a result, such customers and projects need to be deeply decarbonized for the change in the path of the real economy.
Li Liang, founding partner of Hillhouse Capital, thought that ESG is not only an inherent requirement for investors, but also provides investors with natural investment criteria and the best investment, which is to find environmentally friendly companies with complete governance that can create long-term value for society.
Cary Zhang, general manager of general manager of Wellington Private of Wellington Private Fund Management (Shanghai) LTD, pointed out that as a growing trend, climate change will reshape global economy, but the importance of this macro-inflection point is still underestimated, and its huge impact on the regulation of infrastructure spending and geopolitical dynamics has not been fully appreciated.
Four female managers also shared their views on enterprises’ sustainable development. Carol Liao, chairman of Boston Consulting Group (BCG) Greater China, said that females are a strong driving force in sustainable consumption and the concept of green consumption are everywhere in basic necessities of life, including food, clothing, housing and transportation.
Cherry Zhu, president of Dow Greater China, said that the pursuit of sustainable development should not only be the responsibility of one generation, but also the habit of each generation, so it is of great essential for the next generation to deeply understand the necessity of sustainable development and participate in its practice. Phyllis Cheung, CEO, McDonald’s China expressed her wish to continue to promote a diverse and inclusive corporate culture, which is also the epitome of McDonald’s ESG efforts in China.
Guan Xiaohui, vice president of Fosun International Limited, vice chairman of Shanghai Fosun Pharmaceutical (Group) Co., Ltd., believes that the most significant social responsibility (in S) is the accessibility and affordability of products.
In addition, Ewe Hong Tat, president of Universiti Tunku Abdul Rahman, emphasized the importance of new learning to sustainable development in the future. In enterprises and schools, new learning can enhance our sense of identity for ESG and make us willing to support it. Only in this way can human society and the earth brace for better development.
Ma Jingfen, founder of Chu Orange Manor and chairman of Chu Ma Cultural Exchange Center, who came from Yunnan Province, said in her speech that she wanted to establish a comprehensive health care and rehabilitation center. “This is what I’m always thinking about and also the last mission that I must complete in my life”, said Ma.
“Only 5 percent of investors’ decisions are made from traditional financial information and the remaining are all non-financial information. The most important is sustainability information”, said Zhang Zhengwei, special advisor to the chair of the International Suatainability Standards Board (ISSB) and Director of Beijing Office.
According to Li Tao, director of Sina Finance ESG Rating Center, the center divides enterprises’ ESG development into 5 stages, which are ESG deficiency, ESG cognition, ESG action, ESG influence and ESG lead These 5 stages are progressive one after another, around which the center customized 14 related services for enterprises.
What Does ESG Bring to the Capital Market
At venue B on the afternoon of September 13，senior executives from three major stock exchanges in Shanghai, Shenzhen, and Beijing, as well as from securities firms and funds, discussed how ESG can contribute to the high-quality development of the capital market.
Wang Bo, executive vice president of the Shanghai Stock Exchange, stated that the core concept of ESG is highly consistent with the requirements of the development of modern capital markets with Chinese characteristics. In 2004, the United Nations Global Compact organization first proposed the concept of ESG. The core idea of green sustainable development advocated by ESG is highly consistent with China’s new development concepts of innovation, coordination, green development, opening up and sharing, and coincide with the Five-sphere Integrated Plan
Li Hui, executive vice president of Shenzhen Stock Exchange, said that at present, there are nearly 300 listed companies in the green low-carbon field on the stock exchange, with a cumulative equity financing of nearly 1 trillion yuan and a total market value of about 6 trillion yuan, accounting for about 20% of the total market value of listed companies in Shenzhen. It covers multiple industries such as new energy, new energy vehicles, and energy conservation and environmental protection.
Sun Li, deputy general manager of Beijing Stock Exchange, said that at present, the 218 listed companies on the Beijing Stock Exchange have raised a total of 43.768 billion yuan, with an average of 200 million yuan each. In terms of the use of funds raised, eighty percent of the funds raised are invested in green innovation areas such as low-carbon environmental protection, digital economy, new energy and new materials.
“The securities industry is the central part of the capital market and also an important member of the ESG ecosystem, capable of playing multiple important roles in the field of ESG.” Wu Zongmin, executive director and president of China Merchants Securities Co.,Ltd. mentioned that the first is to give full play to its financing service ability. It can provide financing support for enterprises that comply with national strategies and ESG concepts through equity financing and mergers and acquisitions, encouraging them to invest in sustainable development projects to promote win-win results for industrial upgrading and environmental protection. The second is to give full play to investment management ability. The third is to give full play to professional research ability. It can conduct professional research to promote the construction of a Chinese ESG evaluation system, and continuously develop ESG financial instruments and investment strategies that are suitable for China’s national conditions to lead the development trend of green finance globally, and establish the professional image and status of China’s securities industry in the process of global sustainable development.
Ms. Jin Wenzhong, chairman of Orient Securities Co., Ltd. stated that from value discovery to resource allocation, the investment logic of the capital market is quietly changing. With the initiative of the state and regulators, the promotion of responsible investors and the attention of stakeholders, the value of sustainable investment is getting more attention and recognition. A new round of resource allocation has begun invisibly, which has brought tremendous market opportunities.
Liu Zhihui, President of Industrial Securities Co., Ltd. said that green and ESG investment is the general trend. Industrial Securities subsidiary AEGON-INDUSTRIAL Fund Management Co., Ltd. began to layout ESG investment as early as 2008, putting green, social responsibility and other concepts into specific strategies and products to guide the reasonable and efficient flow of funds to physical areas in line with the ESG field.
“The United Nations has now proposed a new idea called the inclusive Wealth Measurement Framework. In the past, we only talked about GDP, but now it seems that there is a conflict between ESG and it, but there is not much conflict, the reason is how many resources you use in exchange for GDP. When we are in charge of a company, we will look at the performance of a department and the performance of subsidiaries, but the prerequisite is how many resources you are consuming the company. If most resources are given to you, we don’t think it’s cost-effective.”Liu Yuanrui, president of Changjiang Securities Co., Ltd. said frankly, “ESG evaluation is an overall evaluation of the environment, society and governance. Put in the field of securities firms and funds, for example, the evaluation of fund managers should not only have good performance, but also have sustainable good performance. “
“In the past, the CSRC called the listing conditions of listed companies sustainable profits, but now it has been changed to sustainable operation, which in fact fully embodies the concept of ESG.” Shen Hefu, chairman and president of Guoyuan Securities Co., Ltd. said.
On how to reduce the green premium, Peng Wensheng, chief economist and Head of Research, China International Capital Corporation, Dean of CICC Globe Institute, proposed two ways: one is to increase the cost of carbon emissions through carbon pricing, carbon tax and carbon trading market; the second is to reduce the cost of clean energy through scientific and technological progress and scientific and technological innovation. “Carbon pricing is to reduce the demand for fossil energy from the demand side, and technological progress is to reduce the production cost and supply cost of clean energy from the supply side. These are two routes.” He believes that there are obvious differences in the choice of routes among the world’s major economies, with China focusing on supply-side measures.
Wu Xinrong, executive president of E Fund Management Co., Ltd. pointed out that the connotation of responsible investment is consistent with the new development concept, and responsible investment is an important driving force for promoting high-quality development of the fund industry. “In terms of increasing the proportion of medium-and long-term funds and promoting a high level of openness, responsible investment helps to enhance long-term returns, control long-term risks, and improve the level of long-term funding for services and a high level of openness.”
Li Yimei, CEO of China Asset Management Company, pointed out that ESG in China has entered uncharted waters. In the past, we stressed for the promotion and popularization of the ESG concept. At present, we highlight the practice, implementation and even chinization of ESG, to make it into a more localized practice truly suitable for our national conditions, industrial features, and development stages. According to the CEO, Li’s company is building a climate database for listed companies.
“ESG is not only a concept of responsible investing but also a value and concept of social development. It is deeply in line with the ideas of ‘promoting harmony between humanity and nature’, ‘putting the people first’, and ‘seeking harmony among all nations’ in Chinese traditional culture”, said Li Wen, chairman of China Universal Asset Management Co., Ltd. and chairman of Asset Management Association of Shanghai.