ESG News | Mar


Selected Monthly ESG News

Green Finance

1. New IPCC Report Reveals Irreversible Impacts of Global Warming, Direct Air Carbon Capture and Storage Technologies May Disappoint

On March 1st, the United Nations Intergovernmental Panel on Climate Change (IPCC) Working Group II released its assessment report Climate Change 2022: Impacts, Adaptation and Vulnerability, which focuses on the causes, impacts and solutions to climate change. According to the report, humanity is being pushed beyond the point of adaptation: more than 40 percent of the population on this earth is "highly vulnerable" to climate change, and more and more people will die from the heat. But if the temperature rise stays below 1.5 degrees Celsius, less losses can be expected to be reduced. So action is needed in the next decade if we want to reverse the current situation.

In addition, the report does not look favorably on measures such as solar radiation management, direct air carbon capture and storage technologies. In the future, policymakers should focus on "climate change adaptation development" to better help society as a whole deal with the reality of climate change.

2. Ministry of Ecology and Environment Releases The 2020 Annual Report on China's Ecological and Environmental Statistics

On March 2nd, the 2020 Annual Report on China's Ecological and Environmental Statistics was published, announcing the national pollutant emissions and treatment, and ecological and environmental management in 2020. 2020 national environmental protection industry operating revenues were about 1.95 trillion yuan, including about 0.65 trillion yuan for the environmental service industry. For the first time, the annual report published financial statistics of the environmental service industry, the overall situation of production or stockpiling of substances controlled by international conventions on the environment of chemicals and other related contents.

In addition, the Ministry of Ecology and Environment has organized to carry out statistical accounting of environmental pollutants and greenhouse gases as a whole, and greenhouse gas emissions such as carbon dioxide have been included in the statistical survey system of emission sources approved and implemented by the National Bureau of Statistics. In the next step, the Ministry of Ecology and Environment will continue to promote the reform of ecological and environmental statistics, continuously improve the timeliness of ecological and environmental statistics release, and enrich the form and content of ecological and environmental statistics release.

3. Central University of Finance and Economics Green Finance International Research Institute Supports the Release of the STOXX Postak Savings Bank ESG Index

On March 2nd, the Postbank Green Finance Forum and the launch of the STOXX Postak Savings Bank ESG Index were held in Beijing. The STOXX Postal Savings Bank of China A-share ESG Index, which relies on the ESG assessment methodology and ESG database provided by the Green Finance International Institute of the Central University of Finance and Economics, was released at the conference. The index uses ESG data from the Institute of Green Finance of the Central University of Finance and Economics and is the first A-share ESG index in the world with international standards and localized Chinese characteristics, which will provide global investors with a more comprehensive and scientific reference for ESG decision-making in the investment and financing of Chinese brands, and help promote the internationalization of the Chinese capital market.

Inclusive Finance

1. The People's Bank of China Issues Guidelines on the Key Tasks of Financial Support for Comprehensive Promotion of Rural Revitalization in 2022

On March 30th, the People's Bank of China issued Guidelines on the Key Tasks of Financial Support for Comprehensive Promotion of Rural Revitalization in 2022. The Guidelines point out that the banking financial institutions should innovate the financial service mode of facility agriculture and agricultural equipment, develop financial leasing business steadily, support agricultural equipment research and development enterprises to issue credit-type bonds and improve financial services such as financing and settlement around the development characteristics of agricultural products processing, rural leisure tourism and other industries, enrich exclusive financial products for new agricultural business entities and small farmers, and support the issuance of rural revitalization notes.

In addition, to strengthen monetary policy tools to support, further optimize the deposit reserve policy framework, and continue to strengthen the support of agriculture, small loans, re-discount management. For the next step, the People's Bank will work with relevant departments to strengthen policy advocacy and experience summary, strengthen statistical monitoring and assessment, and supervise and guide banking and financial institutions to implemented earnestly the Guidelines.

Carbon Finance

1. Russia-Ukraine Conflict: European Carbon Prices Being Cut Nearly In Half While China's Carbon Being unaffected

Since March, the escalating Russia-Ukraine conflict has caused pessimism to grip the European carbon market, with investors reducing their positions and selling off carbon allowances significantly. on March 1st, the EUA benchmark contract for carbon allowances plunged by nearly 20% to close at 67.96 euros per tonne. it continued to fall sharply after the opening bell on March 2nd, reaching a low of 55.47 euros per tonne, but then narrowed the decline to close at 67.51 euros per tonne. At the end of March, prices recovered to €80.53 per tonne, but were still well below the February average of around €90 per tonne. Prices in the domestic carbon market were firmer. China's carbon market just ended the compliance deadline for the first compliance period on February 28th, and the listed agreement trading and bulk agreement trading just experienced a small wave of climax, with less market demand, while the listed agreement price continued to fluctuate slightly around $57-59, and there were no signs of linkage with the war in Russia and Ukraine, the international oil and gas market, and the domestic power market.

2. The first digital RMB carbon credit transaction in China was completed in Chengdu. "Dian-Dian" became the first carbon-neutral service platform in China to access the digital RMB application scenario

On March 1st, under the guidance of the Chengdu Branch of the People's Bank of China and the Branch's Business Administration Department, Sichuan Branch of the Construction Bank of China assisted Sichuan United Environmental Exchange's "Dot" carbon neutral platform to open the digital RMB payment function. The Institute of Electronic Information Technology of Sichuan Province purchased carbon credits emission reduction through digital coin payment to offset the carbon emissions generated by its own meeting activities, achieving carbon neutrality of the meeting.

It is reported that this business is the first online payment transaction of digital RMB in the field of carbon neutralization in China, and the "Dian-Dian" carbon neutralization platform has thus become the first carbon neutralization service platform in China to access the application scenario of digital RMB. Up to now, the platform has completed more than 160 carbon neutral transactions with more than 22,000 participants, which is the highest number of carbon neutral transactions and scenes covered in China.

3. The "Shanghai Stock Exchange Carbon Neutral Action Plan for the 14th Five-Year Plan" was released. The road to green finance is getting more and more visible

On March 1st, the Shanghai Stock Exchange (SSE) released the Shanghai Stock Exchange Carbon Neutral Action Plan for the 14th Five-Year Plan, which aims to provide an action plan for the SSE to support the innovative, coordinated green development of the capital market and to establish a sound long-term mechanism to serve the development of a green, low-carbon and circular economy.

The Plan proposes six specific action measures: optimizing equity financing services, accelerating the development of green bonds, expanding green investment products, promoting the opening of the market to the outside world, strengthening green finance publicity and research, and promoting the construction of a green and low-carbon exchange, which are in line with the promotion and implementation of China's carbon neutrality and carbon peaking policies, as well as the financial market. It is also in line with the development trend of gradual greening and sustainability of the financial market.

4. CITIC Bank Releases Green Paper on Low Carbon Living, Deconstructing Green Consumption in the "Double Carbon" Era

On March 10th, CITIC Bank Credit Card Center, together with Ipsos, a professional research institute, and ESG Rating Center of Sina Finance, released for the first time the 2022 Low Carbon Living Green Paper, which focuses on the low-carbon behavior of Chinese people in the areas of clothing, food, housing and transportation, conducting an in-depth survey to understand the current attitudes and practices of people towards green consumption and low-carbon living, and to gain insight into people's future expectations for green and low-carbon living. The Green Paper focuses on the new era of green consumption and low-carbon life.

The Green Paper focuses on the values, awareness, action and expectations of low-carbon life in the new era.It is the first time for a domestic banking institution to publish a research report on low-carbon living behavior for consumers (C-sides). The Green Paper has five key findings: First, everyone pursues low carbon and green living becomes a consensus. Second, the new blue ocean of digital services. Third, low-carbon practice, knowledge and action are not yet unified. Fourth, low-carbon is not passive, and actively affects others. Fifth, the initial green heart, so that each low-carbon is meaningful.

Sustainable Investment

1. AIG commits to a net-zero emissions portfolio

On March 1st, global insurer American International Group (AIG) announced a new set of sustainability commitments, including a goal of net zero greenhouse gas (GHG) emissions in its global underwriting and investment portfolio by 2050. By 2030, AIG will phase out underwriting and cease new investments in customers that derive 30 percent or more of their revenues from coal-fired generation, thermal power plants or oil sands, or 30 percent or more of their energy production from coal. At the same time, AIG will not invest in or provide insurance coverage for new Arctic exploration activities. Going forward, AIG will work with relevant customers and distribution partners, particularly to ensure a continued transition to a net zero future and to provide guidance on viable solutions designed to help manage climate-related risks.

2. The FC4S Network released a report that financial centers around the world should continue to strengthen sustainable financial action.

On March 1st, the United Nations Network of Sustainable Financial centres (FC4S) officially released the 2021 assessment report on the sustainable financial development of financial centres. The main goal of this assessment is to track the sustainable financial development of the global financial center cities and grasp the trend of global sustainable development. The report points out that the financial capital invested in the area of sustainable development is increasing, the areas involved in the industry are expanding, and the speed of action of the public and private sectors has increased significantly.

While global sustainable finance is booming, the report also identifies seven challenges and needs faced by countries in the process of achieving low-carbon transformation and sustainable development goals. In addition, the report also makes a comparative analysis of the global financial center cities in the specific aspects of sustainable financial product markets, policy building and incentive environment, reflecting the overall development trends, challenges and opportunities of global sustainable financial markets.

3. S & P issues $1.25 billion of bonds worldwide, with interest linked to a number of sustainable development goals.

On March 7th, S & P Global announced the launch of its first sustainable development-linked bond (SLB), with a $1.25 billion 2029 sustainability-linked priority note, with debt costs linked to sustainable development goals, including emissions reduction and supplier diversity. The sustainability goals chosen by the bond include the value chain, including the climate impact of business travel, as well as indirect spending by companies through their suppliers.

The offering is part of a $5.5 billion senior note issue by S & P Global and comes after the company completed a $140 billion merger with market data service IHS Markit last week. The interest rate for the SLB is 2.7%. If Global fails to meet its sustainability goals, the bonds will raise interest rates by 25 basis points from 2026.

ESG Investing

1. The Securities and Exchange Commission says it is studying the disclosure rules for ESG investment products

On March 4th, the Securities and Exchange Commission (SEC) is studying rules for ESG investment products, including disclosing standards and data for "ESG", "green" or "sustainable" labeled products to fund managers, said Gary Gensler, chairman of the Securities and Exchange Commission (SEC). Gary Gensler uses a metaphor to illustrate his idea: "just as consumers can judge whether milk contains fat by food labels, investors should be able to judge whether investment products are really sustainable by certain labels."

Gensler highlighted the significant growth in ESG investment products, noting that at least 800 registered investment companies holding $3,000bn say they are investing in assets that achieve some form of environmental, social or governance objectives. However, the information provided by most companies is still not clear and complete on the question of what makes the fund green or sustainable.

2.New York Stock Exchange launches Advanced Sustainable Development Advisory Committee for listed companies

On March 10th, the New York Stock Exchange (NYSE) announced the establishment of the New York Stock Exchange Sustainability Advisory Committee, which is composed of a group of senior sustainability officials selected from companies listed on the New York Stock Exchange. According to the New York Stock Exchange, a unit of International Exchange (ICE), the group is committed to advising companies on ESG issues and identifying, developing and sharing best practices.

The Advisory Committee on Sustainable Development will be chaired by Elizabeth King, Chief Regulatory Officer of ICE and President of ICE ESG. In terms of corporate sustainability, ICE data show that large listed companies go further than small ones in key areas such as measurement and disclosure. Through the power of the NYSE community, the committee will help promote all partners and promote the identification, development and adoption of best practices in organizations of all sizes.

3. ESG rating results of the first 300 CSI, local ESG rating adds new concerns

On March 18th, the CSI released the ESG evaluation data of A-share listed companies, and the first public inquiry on the ESG rating results of Shanghai and Shenzhen 300 constituent stocks was opened on the official website. Listed companies and research institutions can query the ESG level, industry ranking, and score information in three dimensions: environment (E), society (S) and corporate governance (G).

The ESG rating method of CSI was first issued at the end of 2020 and revised on March 17, 2022. The rating results are divided into ten grades, reflecting the ESG performance of the respondents relative to other companies in the industry. The evaluation system includes three dimensions of ESG, 13 themes, 22 units and nearly 200 indicators. The evaluation is based on enterprise disclosure, authoritative disclosure and CSC's own information, and the update frequency is generally monthly.

Article classification: ESG News

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