The United Nations Environment Finance Initiative (UNEP FI), the Principles for Responsible Investment (PRI), The Generation Foundation, and the International Institute of Green Finance (IIGF) today published the report – Investor Duties and ESG Integration in China. The report is discussing about the development of an investment and regulatory environment that promotes consideration of financially material environmental, social and governance (ESG) issues, consistent with investor obligations and duties. The duties of investor should reflect and align with the Chinese government’s guidelines for establishing a green financial system (GEGFS). Domestic and international capital markets are expected to play a significant role in financing China’s green transformation and growth. The report also makes recommendations in five areas policy guidance, pension regulatory guidance, corporate disclosure, standardized labels, and investor education. 
    Publishing guidance on green and sustainable investment that articulates how institutional investors and their investment managers should implement the GEGFS;
    Introducing regulation for pension funds to integrate ESG issues, encourage high standards in investee companies and disclose on ESG practices and performance;
    Ensuring and monitoring the effectiveness of the mandatory environmental disclosure framework for companies, and aligning with international disclosure standards for ESG issues;
    Expanding a standardized offering of green and sustainable investment products and comprehensive tools to support their market uptake; and
    Supporting investor education and ESG investment research.
China is the leading country in taking action against climate change, sustainability and green gas. Their bold efforts at addressing climate change, as well as transforming the country’s economic structure. As part of aligning financial markets with China’s development goals, asset managers are increasingly integrating ESG factors into their investment decisions also the comprehensive approach of this report is an important contribution to this agenda, providing tangible recommendations within guidance, regulation, disclosure, standards, and investor education.

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This project, driven by the progress of green finance and a rising interest in ESG integration in China, builds knowledge and shares experience among policy makers and investors on how integration of material ESG factors contributes to long-term sustainability, said Eric Usher, Head of UNEP FI.
As part of aligning financial markets with China’s development goals, asset managers are increasingly integrating ESG factors into their investment decisions,” explained Wang Yao, director general of the IIGF.

Source:UNEPFI

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Picture credit to:Hanson Lu