New York – Recently, the The United Nations-supported Principles for Responsible Investment (UN PRI)announced the shortlist of the 2022 PRI Awards. China Southern Asset Management’s “Facilitating Climate Transition-Application of Carbon Emission Database” project, as the only representative of Chinese organization, has been successfully shortlisted in the “ESG incorporation initiative of the year” and “Emerging market initiative of the year”.
The United Nations-supported Principles for Responsible Investment (UN PRI) is one of the most authoritative ESG organizations in the world. Currently, there are more than 5,000 signatories, including asset owners, asset management companies and service providers globally. The total assets under management exceeded USD120 trillion. The PRI Awards are divided into five categories, including “ESG incorporation initiative of the year”, “ESG research innovation of the year”, “Real world impact of the year”, “Stewardship initiative of the year” and “merging market initiative of the year”. The participating projects are selected by a global ESG independent panel of judges, and the five ESG projects with the highest scores are selected.
As one of the leading asset management institutions in the country, China Southern Asset Management officially became a signatory of the PRI in 2018. China Southern Asset Management adheres to the six PRI principles and continuously promotes ESG research and investment practices. The “Facilitating Climate Transition—Application of Carbon Emission Database” project was shortlisted for the 2022 PRI Award, which is a recognition of China Southern Asset Management’s deep implementation of ESG investment.
In recent years, the Chinese capital market has been paying increasing attention to ESG. Among them, climate change has become one of the most important topics in ESG. In this context, China Southern Asset Management attaches great importance to incorporating climate data into its equity portfolio to identify risks and opportunities associated with climate change. Based on the Gradient Boosting Decision Tree (GBDT) model, China Southern Asset Management has established a carbon emission database consistent with the methodology of the PCAF (Partnership for Carbon Accounting Financials) to control climate risks.
As a dynamic adjustment tool, China Southern Asset Management Carbon Emission Database can effectively track the progress of carbon emission reduction work of enterprises, provide more comprehensive and practical information for the follow-up qualitative analysis and active research of the investment research team, and optimize the investment strategy to gradually realize the decarbonization and emission reduction of the investment portfolio. Through the self-built carbon emission database, China Southern Asset Management has successfully reduced the weighted average carbon emissions in the investment portfolio of high-emission industries such as coal, oil and natural gas and transportation to 26.32%, 55.27% and 6.51% respectively, which is better than the industry benchmark.
On the one hand, China Southern Asset Management will further promote the invested enterprises to improve the disclosure of climate information by participating in corporate governance, and help enterprises to effectively assess and deal with the risks brought by climate change; On the other hand, China Southern Asset Management will continue to improve its climate-related database and enhance the resilience of its investment portfolio to climate change, thus creating a net zero emission path for the company’s investment portfolio.