Investing In Zhang Yang: Investing In GP'S ESG Performance, Green Investment Boosts High Quality Development

Editor's note

Everything comes green in spring. At present, the green economy has become an important driving force for the transformation of economic development mode, economic structural adjustment and optimization, and the dynamic transformation of economic growth. As the blood of economic growth, green finance and green investment are facing broad market space.

      The theme of "green investment, capital and industry creating green future" launched by the economic report and 21 Financial APP in twenty-first Century aims to advocate investment institutions, with the help of capital strength and influence, to focus on sustainable investment opportunities, including environmental governance, energy conservation and emission reduction, including Inclusive Finance, universal education, universal health care, food safety, precision poverty alleviation and other pan ESG areas. 。

It is gratifying to note that the long-term value investment concept advocated by green investment is very compatible with the VC/PE long cycle investment mode. More and more investment institutions begin to implement green, coordinated and sustainable development by integrating relevant requirements in the investment principles and business processes.

"More and more institutions are paying more attention to the concept of green investment, focusing on green industries such as low carbon, environmental protection, clean energy, and new industries that can improve quality, efficiency and empowerment." When it comes to the concern of PE/VC institutions for green investment, Zhang Yang, who invested in Shengli, said CEO.

In the process of the industry guidance fund in the trustee management area, Shengshi investment attaches great importance to the balance of economic and social benefits, and takes into account the mission of regional industrial upgrading, economic development and creating tax and employment in the operation and management of the fund.

Private equity firms, which are still minority in big investment areas, are important forces in the world to promote responsible investment. In 2018, nearly 2000 signatories of the United Nations responsible investment organization (PRI) involved more than 700 private equity investments.

MAIF's chief investment officer, Sophie Elkrief, in the interview of private equity ESG supervision, reporting and dialogue, can also see that overseas fund investors value ESG: "for us, ESG reports and financial reports are equally important."

Zhang Yang. Data map

ESG has become a new mainstream

In China's domestic market, ESG liability investment is also becoming a well-known concept for private equity investors. As the RMB fund LP and the US dollar fund LP pay more attention to the ESG concept, the RMB fund managers also take the environmental, social and governance effects of investment into consideration when investing in GP.

In May 2019, Shengshi invested in UNPRI and became the first government guidance fund management institution to sign responsible investment principles in China. According to Zhang Yang, actions to invest in responsible investments include promoting coordinated regional development, expanding the green economy, helping beautiful countryside construction, and providing new solutions for precise poverty alleviation.

As a parent fund management institution in the Yuan Dynasty, in the course of investment practice, Shengshi investment, on the one hand, explores investment opportunities that can produce long-term and positive impacts on the environment and society, and enhances sustainable long-term investment returns. On the other hand, it supports the social responsibilities of the asset managers by promoting investment and supporting outstanding enterprises that are beneficial to social development, environmental protection and corporate governance. Economic and social sustainable development.

"We also set up an independent responsibility investment committee at the group level. ESG's strategic planning and decision-making is one of its important functions." Zhang Yang told reporters that the investment team of Shengli increased ESG's tune in addition to the commercial adjustment, and judged from the three dimensions of environment, society and corporate governance.

As early as in 2016, Shengshi investment, as a fund manager, launched the industrial development fund of Jiangsu's old industrial base of Xuzhou with a scale of 2 billion 10 million yuan. Zhou Hao, vice president of Shengli Jin Cai, director of the fund, told reporters that Xuzhou has been exploring the green mode of ecological priority and industrial transformation and upgrading. When choosing GP, it has focused on the above industries, and has also focused on the experienced GP team in ESG, especially in the field of ecology, recycling, green and low carbon.

Green investment competition

The concept of green investment is mainly reflected in the three dimensions of ESG investment environment side. At the end of 2018, the green investment guidelines (Trial) issued by the China Securities Investment Fund Industry Association defined the green investment: in order to promote enterprise's environmental performance, develop green industries and reduce environmental risks, we adopt a systematic green investment strategy to invest in enterprises or projects that can generate environmental benefits, reduce environmental costs and risks.

That is to say, the scope of green investment should be around environmental protection, low carbon and recycling, including energy efficiency, emission reduction, clean and renewable energy, environmental protection and remediation, recycling economy and so on.

Speaking of ESG investment, especially the localization path of green investment, Zhang Yang told the twenty-first Century economic report reporter that China's investment market and overseas practice were slightly different. "Therefore, as the mother foundation, the fund needs to explore the strategy of domestic green investment with sub funds to help Zi Ji improve the behavior of green investment, provide post investment services and resources support."

According to the introduction, the Xuzhou old industrial base industrial development fund and the GP team will sign a negative list of polluting environment or volume without increasing efficiency when signing LPA. When such projects appear in the vote, they may not rule out the possibility of exercising one vote veto.

Apart from the perspective of green investment, the GP fund's incentive and restrictive provisions are set up, and the fund has been harmonization and consideration. Shengli investment has also gathered green investment institutions, industry, scholars and third party service agencies through the green Tung responsibility investment college to explore the path of green investment with Chinese characteristics.

"Everyone is pursuing the more efficient way of energy conversion and reducing the quality and efficiency of the environment as far as possible without damaging the environment." In Zhang Yang's view, although the economic benefits of green investment need time to prove, "I believe that returns will not be bad".