Lately, the MSCI ESG Disclosure and Rating Training was held at the trading hall of the Shanghai Stock Exchange (SSE). The half-day training mainly introduced the MSCI ESG index to A-share listed companies. Que Bo, SSE Vice President, and Ted Niggli, Head of the MSCI Asia Pacific Index Business were present at the opening ceremony and delivered speeches. Representatives from over 220 listed companies participated in the training, and the Shenzhen Stock Exchange also sent delegates to the training.
ESG, the acronym of Environmental, Social and Governance, represents 3 major non-financial indexes that measure the influence to environment, the contribution to society and the structure of internal governance of a company.
Que Bo mentioned that as A shares has been officially included in the MSCI Index, there will be increasingly more international investors to invest in A shares and, if the listed companies can learn more of international conventions, it will help to enhance their international reputation and influence and allow more international investors to know about them, thus setting up a bridge between the listed companies and international investors. Ted Niggli said that only a few investors cared about ESG several years ago, but now large institutional investors, like pension funds and sovereign wealth funds, are all concerned about information on ESG to manage long-term risks. ESG is not a temporary topic, but a long-term structural one, on which the heat will not disappear. At present, only 2-3% of Chinese investors pay attention to ESG, but the number will increase remarkably in the future.
Ms. Olga Emelianova, Head of the Global ESG Rating Research of MSCI, and Wei Zhen, Head of the MSCI Research in China, made an introduction on the specific procedures, the way of index building, and the use of relevant indexes of the MSCI ESG Rating from the rating methodology and the index methodology, respectively.
Green finance and social responsible investment have been widely recognized in the market. The SSE has strived to develop cooperation in green finance in recent two years, such as promoting green bonds and supporting enterprise's green development, to urge more listed companies to earnestly fulfill their social responsibilities and pay attention to their long-term development. Recently, the SSE has officially issued the "SSE Vision and Action Plan for Supporting Green Development and Promoting Green Finance (2018-2020)", which will coordinate and guide all tasks at the SSE as well as provide strong support for the development of China's green finance system as a framework document for the SSE to bolster the green development and propel the green finance in the future.
In recent years, more and more domestic and foreign investors have begun to pay attention to the examination and evaluation on a company's ESG. The SSE hoped to encourage the listed companies to pay more attention to the relevant non-financial indexes and realize their long-term sustainable objectives through such training.