Evidence demonstrates ESG incorporation outperforms traditional benchmarks in China

A growing number of investors in China are incorporating ESG factors in their investment strategies. This is because evidence shows that ESG incorporation outperforms. As of March 2020, 38 Chinese investors signed PRI.

Investment performance, green finance policy and the opening of Chinese investment markets to global investors, are the key drivers for responsible investment.

This report provides analysis based on MSCI ESG research data and examples of ESG incorporation strategies by five asset managers in China (China AMC, E-Fund Management, Harvest Asset Management, Hwabao Asset Management and BNP Paribas Asset Management).

The research demonstrates that both best-in-class and tilting strategies using ESG scores deliver improved risk-adjusted returns – more so in China, than in other emerging markets.

The key message from this report is that there is investment value in considering ESG factors in investment decisions. For Chinese policy makers, this demonstrates the value of setting a standardised, mandatory ESG disclosure framework to improve the quality and quantity of ESG data in China.

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English version

Chinese version