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Southern Asset Management’s Case Study: Fixed Income Engagement in the Chinese Context was collected by the PRI’s Case Study Library

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Southern Asset Management’s Case Study: Fixed Income Engagement in the Chinese Context was collected by the PRI’s Case Study Library

June 02
08:57 2022

Shenzhen, China – Recently, Southern Asset Management’s Case Study: Fixed Income Engagement in the Chinese Context was collected by the PRI’s Stewardship Case Study Library.

 

As one of the leading asset management institutions in China, Southern Asset Management has always adhered to the “ESG investment philosophy” as a guide, committed to the continuous creation of value by customers and investors, taking into account the sustainable development of society, actively promoted the implementation of ESG investment philosophy in an all-round, three-dimensional and high-level way with practical actions, and incorporated it into the investment decision-making inspection system from three aspects: environment (E), society (S) and corporate governance (G), exploring the guidance of capital. The inclusion of Case Study of Fixed Income Participating in Corporate Governance in China in PRI Case Study is an important affirmation of Southern Asset Management’s full participation in corporate governance in ESG investment field.

In this “Case Study”, Southern Asset Management explained in depth the reasons for “responsible management”: “Responsible management is an effective strategy to improve the long-term competitiveness of investment objects and strengthen the performance of investment portfolios, and it is also a part of the trustee’s responsibility. The most serious risk faced by fixed-income investors is liquidity risk. Therefore, continuous supervision, on-site investigation and understanding of the company’s fundamentals, including issues related to climate change and biodiversity, are effective ways to reduce portfolio risks. It is imperative to carry out responsible management.”

At the specific implementation level, Southern Asset Management includes ESG issues in the participation activities of listed companies and bond issuers, so as to improve the ESG awareness of investors, optimize their ESG performance and create a better investment ecosystem. Southern Asset Management’s responsible management strategy also encourages exchanges and cooperation with regulatory agencies to promote the sustainable development of the industry where the investment target is located.

Southern Asset Management focuses on issues such as environment and climate change. After China announced its commitment to carbon neutrality, Southern Asset Management established an internal carbon emission database to follow up the carbon footprint of the portfolio, and continued to promote the participation of high-emission portfolio companies to support these companies towards carbon neutrality. Southern Asset Management’s carbon emission database has completed the full coverage of all investment targets of its portfolio by means of external data collection, Fintech and AI algorithm, and selected the 100 companies with the highest carbon emissions from the database as the target companies for conscientious management.

Moreover, Southern Asset Management also monitors and evaluates the relevant progress made by portfolio companies by evaluating their climate-related risks, climate risk governance, climate risk response strategies and climate-related disclosures through proprietary scorecards.

The case study also details the case of Southern Asset Management’s deep involvement in corporate governance of a bond issuer. Southern Asset Management helps the company improve animal health, reduce pollution and enhance corporate resilience.

Finally, Southern Asset Management also pointed out the main challenges faced by ESG investment in China at present, including the lack of a unified ESG information disclosure framework, difficulties in information collection, information credibility and information asymmetry, etc. Although China’s participation in private enterprises is relatively smooth, it still faces the challenge of information credibility. Therefore, Southern Asset Management calls on regulators to issue ESG information disclosure standards as soon as possible.

Media Contact
Company Name: China Southern Asset Management
Contact Person: Si Chen
Email: Send Email
Country: China
Website: http://www.southernfund.com/en/