On December 5, the 11th China Responsible Investment Forum (China SIF) Annual Conference was successfully held in Beijing. The annual meeting was hosted by SynTao Green Finance and co-hosted by the United Nations Environment Programme Finance Initiative (UNEP FI) and the United Nations Sustainable Exchange Initiative (UN SSE). Dozens of experts from regulatory, market and academia spoke or participated in dialogues at the annual meeting, and more than 300 delegates attended the meeting.
Zhang Dachuan, Head of ESG Practice at J.P. Morgan Asset Management China.
First of all, Zhang Dachuan introduced J.P. Morgan Asset Management's global sustainable bond investment strategy. J.P. Morgan Asset Management builds a sustainable investment strategy based on its self-developed Sustainable Inclusive Economy Framework (SIE). Starting from the Sustainable Development Goals, we help clients capture investment opportunities for sustainable transformation.
Zhang Dachuan divides J.P. Morgan Asset Management's sustainable investment strategies into two categories, namely ESG integration and sustainable focus strategies. The so-called ESG integration is aimed at managing risk and improving long-term investment performance, emphasizing the systematic inclusion of financially material ESG factors in investment analysis and decision-making. A sustainability focus strategy, on the other hand, goes beyond ESG integration to identify more specific sustainability priorities or themes. Under the sustainable investment framework, J.P. Morgan Asset Management's fixed income strategy can be further incorporated into rules such as regulatory or industry exclusion mechanisms, issuer ESG performance evaluation, and debt use review, which will be implemented according to the definition of the product.
When asked, how to deploy transition finance in the fixed income sector, and how to identify credible transitions?Zhang Dachuan said that companies may be affected by the transition due to changes in the climate-friendliness of products, carbon prices, energy consumption and other factors, and climate-related risks will be increasingly valued by investors. Transition factors are very broad in fixed income investing and can be understood in three ways.
First, it is important to assess the transformation readiness of the company to identify transformation investment opportunities. J.P. Morgan Asset Management's research shows three key ways companies can prepare for the low-carbon transition:
Emissions management: Reducing direct emissions and benefiting from the shift in consumer demand for low-carbon intensity products;Managing resources: electricity, water and waste management, etc.;Managing climate-related risks: Mainly physical and reputational risks. Second, it is also important to assess the key sustainability indicators of the debt on an issuer-level basis. Zhang Dachuan believes that the use of raised funds, project selection and management, and duration disclosure deserve priority attention.
Third, due diligence is also an important means of supporting enterprise transformation. For example, in a green bond strategy, you can focus on issues such as the use of proceeds and the credibility of the SDG implementation plan.
At the end of the roundtable discussion, Zhang Dachuan introduced the development of J.P. Morgan Asset Management in the field of sustainable investment in China. At present, J.P. Morgan Asset Management China is fully integrating global sustainable investment resources in terms of processes, data, investment and research frameworks, and is simultaneously developing various sustainable investment strategies suitable for the local market.
In the future, Zhang Dachuan said that J.P. Morgan Asset Management will continue to take "for tomorrow, invest for tomorrow" as its sustainable investment vision, bring positive impact to the world through investment, and strive to create sustainable returns for customers.