On November 29th, Yin Xiaopeng, Dean of the Global Value Chain Research Institute of the University of International Economics, and Yang Liangci, Senior Investment Manager of Luen Mei Holdings Investment Development Center, participated in an ESG-themed roundtable discussion at the 36Kr Wise "Gold Rush in the Waves - Capital Market Conference", and respectively expounded their insights on "how to tell ESG stories well for enterprises".
How to Tell ESG Stories Well" roundtable forum.
Yin Xiaopeng has studied the global value chain for many years, and at the moment when the problem of climate change is prominent, what kind of asset depreciation and financial risks will the global value chain of many carbon-intensive industries be threatened?
Yin Xiaopeng shared several views on this issue. He mentioned that, first, there was the issue of transformation. Resources long known as fossil fuels are bound to be gradually replaced. There are two alternatives, one is to not use such resources at all, but to use other resources such as new, solar, wind, geothermal and tidal energy;The other is that existing energy sources are used in other ways. Thirty or forty years ago, there were experiments that tried to burn coal to the level of plasma, which was more efficient and less polluting. Despite the high cost of this solution, it is difficult to commercialize. But for those in the industry, it's a much more viable path.
The second is the issue of environmental taxes and carbon tariffs. Yin Xiaopeng believes that in this regard, enterprises will most likely be limited in the future. Domestic environmental taxes may manifest themselves as paying for pollution from businesses. Abroad, European-designed carbon tariffs have been vetoed by many countries, and some countries can now be exempted. But in the long run, if you continue to operate in the traditional way, the environmental costs of the business will increase.
In the middle of the above two, there are also issues related to policy support, such as financial support. If companies still rely on traditional methods, they should gradually depreciate. However, Yin Xiaopeng also mentioned that enterprises usually operate multiple types of products, some of which do not rely on traditional models, so there is still room for development in terms of enterprises themselves.
In June this year, the ISSB officially released IFRS Sustainability Disclosure Standard 1 General Requirements for Sustainability-related Financial Information Disclosures and IFRS Sustainability Disclosure Standard 2 Climate-related Disclosures, which will come into effect after January 1, 2024. It is widely believed in the industry that this is the first set of global ESG reporting standards.
Regarding the impact of the release of the above standards on enterprises, Yin Xiaopeng said:
First, it may turn what used to be a temporary restriction into an institutional requirement. "It's a big challenge for businesses. If you (the enterprise) do not accelerate the transformation, some traditional products may be greatly limited and will be forced to exit due to cost reasons. ”
However, for China, the efficiency of educational resources and R&D is very high, so this is also a new opportunity for China. "For example, some resources are in the east, and what we envisioned back then was that the development of the east would be transferred to the west, so that jobs would not be lost;But if you move overseas, although the value is still there, because the company has a controlling stake, the job opportunities are lost. "So it's an opportunity and a challenge. If environmental standards increase, and there are environmental taxes or even carbon tariffs on carbon emissions at home and abroad, then the original idea may have to change, which means that it may be more appropriate to move overseas. In this sense, it is both an opportunity and a challenge, which has a promoting effect on the transformation of enterprises.
Promotion, sometimes by incentives, sometimes by restrictions, one by pulling, one by pushing. Due to the domestic dual carbon policy and international trends, China may have to gradually start to implement corresponding measures, and it will basically be an institutional arrangement. Do domestic companies have any way to deal with it, what are they doing now, and whether they can carry it down. Policies are likely to be implemented in the country gradually, and will be largely institutional. The impact is great, but there are opportunities and challenges. Yin Xiaopeng said.
From the perspective of enterprises, Yang Liangci cited the investment and R&D made by Luen Mei Holdings in the past as an example to show that domestic enterprises have formed some technical solutions for carbon reduction and carbon reduction.
He said that Luen Mei Holdings positions itself as a comprehensive energy company that provides heat supply with clean energy, and the types of energy involved include the traditional clean utilization of coal, as well as natural gas, electricity, as well as new technologies and applications such as geothermal heat pumps and air source heat pumps.
Yang Liangci mentioned that Luen Mei Holdings' biomass cogeneration enterprise in Jiangsu is relatively successful. Biomass, which sounds a little rudimentary, is the burning of some agricultural straw to generate electricity and heat supply. But in fact, it is more low-carbon than photovoltaic and wind power, and it is truly zero-carbon. Because photovoltaic and wind power need 1It takes 4 years to offset the carbon that occurs in the production and manufacturing process, but biomass, that is, straw, can consume carbon through photosynthesis in the production process, and then burn it and release it into the air, making a cycle every year, which is truly low-carbon.
In addition, the conversion of solar energy into electricity or heat energy is not as economical as it is at present, but our company is more successful in this regard. We have built a biopharmaceutical industrial park in Jiangsu, specializing in undertaking foreign pharmaceutical companies. Because Europe, the United States and North America have high requirements for the carbon footprint of products, they have attracted a large number of foreign pharmaceutical companies to settle down, which allows us to maintain our economic benefits. Yang Liangci said.
Looking ahead, in the face of the new standards for corporate information disclosure proposed by international institutions and the new requirements put forward by investment institutions for the ESG management level of enterprises, Yin Xiaopeng and Yang Liangci expressed their views on how enterprises should tell ESG stories well.
Yang Liangci believes that the premise of the company's own sustainable development is to make a profit. In order to promote sustainable ESG development, companies should first inject new genes into themselves by managing or embracing the Internet thinking of the new era, so that they can achieve profitability themselves. Only then can we have the strength and ability to strengthen social benefits, do technological reform or business model innovation, or optimize investment layout, so as to help ESG management and improve the overall social benefits.