This event is divided into two parts: for the first part, Mr. Wang Yang, Bloomberg's Head of China Buy-Side Market Specialists, delivered a keynote presentation titled "ESG Trends Outlook for 2024." ; for the second part, hosted by Ms. Lin Yigu, the Executive Secretary-General of Jingyi Consulting, led a panel discussion with Mr. Qiang Fu, Investment Partner at Lanchi Ventures, and Ray Li, founder and chairman of Heroad Investments. The panelists explored he topic of "How to achieve 'both financial returns and positive social and environmental impact' through ESG impact investing?"
The organizer of this event was WOA (World of Allocators), established in 2020 with the mission of promoting long-term endowment investment strategies within China's asset management industry. WOA is operated by Shanghai Ziben Consulting Management Co., Ltd. and is the officially authorized party for Ted Seides' podcast "Capital Allocators." This event is generously supported by the Bloomberg Beijing office, which has provided the multifunctional hall venue and a delicious variety of refreshments during the tea break.
On May 17th, WOA hosted a captivating ESG-themed event at Bloomberg's Beijing office.
- Bloomberg Wang Yang's ESG Keynote Presentation——ESG Trends Outlook for 2024
Mr. Wang first introduced an ESG survey completed in November 2023, which surveyed 250 executives and 250 senior investors from around the world. While ESG has been in the public eye in recent years, there has been a mix of positive and negative reviews. A catchy description in this sharing, "Finding clarity amidst the noise," highlights the purpose of the survey.
The survey found that 85% of investors believe that ESG can lead to better returns; 84% of executives say that ESG can help form a more robust corporate strategy. Among the many views, the survey found that "investors and executives are firmly committed to ESG principles to improve profits, competitiveness, and brand value."
Mr. Wang Yang also raised a question, "Is ESG still mainstream?" Although short-term attention has shifted towards geopolitical and macro issues, 85% of investors and companies plan to increase their investment in ESG. In 2024, with a heightened focus and scrutiny on businesses and investors, regulatory actionability and climate risk assessment will also become key areas for companies to concentrate on.
ESG, also known as sustainable finance, is primarily driven and guided by policies and regulations. Mr. Wang mentioned that sustainable finance policies can be divided into four categories to qualitatively assess the strength of sustainable development regulations in different regions: Raise Awareness, Define Sustainable Finance, Increase Transparency, and Enforce Action. Their tracking research shows that Europe has comprehensive deployments in all four areas, while most of the Asia-Pacific region is still in the first stage, which qualitatively illustrates that Europe's regulation on sustainable development is stronger than that of the Asia-Pacific region.
What does ESG mean for investment portfolios? According to the Bloomberg ESG scores from 2021 for the S&P 500 and STOXX 600, the relative return reached 5% (compared to the benchmark). For low-carbon companies in the United States, there is an enhancement of portfolio performance; conversely, in Europe, ESG is an optimization of portfolio risk rather than an optimization of returns.
- Panel Discussion — "How to achieve 'both financial returns and positive social and environmental impact' through ESG impact investing?"
In the thematic dialogue session, the moderator Ms. Lin Yigu first introduced the concept of impact investing and its core characteristics, and elaborated on its relationship with ESG investing and the overview of the global and Chinese impact investing market. Then, through the form of questions and answers, Mr. Fu Qiang and Ray Li had an in-depth discussion on " How to achieve 'both financial returns and positive social and environmental impact' through ESG impact investing?".
Impact Investing, a concept proposed by the Rockefeller Foundation in 2007, is defined by the Global Impact Investing Network (GIIN) as an investment activity that intends to create positive, measurable social and environmental benefits while generating financial returns. Distinguished from traditional investing, which focuses solely on maximizing financial returns, impact investing aims to effectively address social and environmental issues while also obtaining the appropriate financial returns for investing in these good solutions. In recent years, as the most advanced strategy within ESG investing, impact investing has attracted increasing attention and practice from investors. As of December 2021, according to the AUM statistics of related direct investment projects, 3,349 impact investing institutions globally managed assets reaching 1.16 trillion US dollars.
The two guests, as experienced investors, affirmed the value of impact investing as a more adaptable trend for future market development. Ray Li pointed out that impact investing can help investors and investees create long-term value and is a higher-quality investment behavior. Mr. Fu Qiang believes that the key to impact investing is people, by finding "intentional" and "powerful" people to create incremental value for traditional philanthropy and business fields. The investment cases of the two guests show that more and more asset owners and fund managers are integrating their personal values and visions into their investment behavior, which will continue to drive the expansion of the impact investment market.
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