As investors navigate risks and opportunities in China’s economy, it is important to consider certain factors, such as reducing or eliminating the use of coal, promoting technological development, considering the sustainable development goals and encouraging transparency and disclosure. This section provides a specific ten-step investment framework to navigate sustainable investment in China.
The concept of ESG (environmental, social and corporate governance) is often too complex to implement in the investing decision-making process. For this reason, it is essential to consider the sustainable development goals to figure out what outcomes we seek, pinpoint specific strategies, determine what data we need, understand industry-specific policy frameworks and consider the government’s political structure and stability when analyzing Chinese companies or what we call ESG+.
As the world continues to evolve, the concepts of first world/second world/third world or developed/developing/frontier nations have become obsolete. A sliding scale of “mature,” “evolving” and “challenged” allows us to better understand nations and where they stand economically, relatively and as far as their own maturity is concerned.
- Bloomberg New Energy Finance. 2019. New Energy Outlook. https://about.bnef.com/new-energy-outlook/
- Krosinsky, Cary, Robins, Nick, et al. 2008. Sustainable Investing: The Art of Long Term Performance. London: EarthscanGoogle Scholar
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- South China Morning Post. 2020. Hong Kong Listed Firms Get ‘F’ on ESG Report Card, Put on Notice as Rules Become Mandatory in 2021, January. https://www.scmp.com/business/article/3044106/hong-kong-listed-firms-get-f-esg-report-card-put-notice-rules-become
- UN Global Compact. 2013. Value Driver Model. https://www.unglobalcompact.org/take-action/action/value-driver-model. Accessed 6 Jan 2020.