First Chinese Asset Owner Joins PRI08.27.2019
Ping An Insurance (Group) Company of China, Ltd. (hereafter “Ping An” or the “Group” or the “Company”, HKEX: 2318; SSE: 601318) has become a signatory of the United Nations-supported Principles for Responsible Investment (PRI), the first Chinese asset owner to participate in the initiative.
Great to welccome our first Chinese Asset Owner to @pri_news Ping An Joins UN-supported Principles for Responsible Investment (PRI) First Asset Owner Signatory in China to the PRI – https://t.co/hqO4fp91H3
— Fiona Reynolds (@Fireynolds) August 27, 2019
The PRI, initiated by former UN Secretary-General Kofi Annan, was launched on the New York Stock Exchange in 2006. It is an international network of institutional investors, asset managers and service providers committed to a more sustainable global financial system. It works to understand the investment implications based on three major issues of environmental, social and governance (ESG) factors. It also developed six Principles for Responsible Investment to support its signatories in incorporating these factors into their investment and ownership decisions.
“We are delighted to welcome Ping An as the first asset owner signatory in China to the PRI. In becoming a signatory, Ping An is showing real commitment to responsible investing in the businesses it operates in, across insurance, banking and finance,” said Fiona Reynolds, CEO of PRI. “Asset owners hold a very powerful position in the investment chain, and we hope that Ping An’s leadership will encourage other companies in China to integrate ESG factors into their investment strategies. We look forward to working with Ping An.”
Ping An will leverage responsible investment opportunities to promote the Ping An sustainable investment model in an effort to redefine the standard of responsible investment in China; to achieve a shared and sustainable future for the Company and its stakeholders; and to foster sustainability in China and the world.
Richard Sheng Ruisheng, Board Secretary and Brand Director of Ping An Group said, “By putting in place a responsible investment framework, Ping An aspires to be a benchmark for responsible investment among Chinese financial groups. We are committed to furthering and improving our sustainable development model and becoming an exemplary ESG-compliant company for sustainable development in China and the world.”
More than 2,500 organizations from over 60 countries or regions worldwide are signatories of the PRI to date, with over US$8 billion of total Assets Under Management (AUM). More than 30 of the signatories are from China where the development of green finance has become a pivotal national strategy. Joining the PRI is a major step forward in Ping An’s sustainability strategy.
Ping An implemented its responsible investment policy framework at Group level in 2019, incorporating ESG criteria in Group-wide investment activities in areas of concern in capital markets. These cover business codes of conduct, corporate governance, responsible investment, sustainable insurance, information security, artificial intelligence governance, sustainable supply chains and the 2030 UN Sustainable Development Goals. Leveraging its artificial intelligence technology, the Group raised the bar with the world’s first AI-ESG platform to drive efficiency in Ping An’s ESG management.
The Group published its 1H2019 Sustainability Report and publicized the policy framework as well as goals and objectives of the core ESG issues in capital markets. The Group also added a section on Sustainability on the Group website to improve the quality and transparency of its ESG disclosures.
A Holistic Approach to Implementing the Principles
As the first Chinese asset owner to be a signatory of the UNPRI, the Group formulated the Ping An Responsible Investment Policy to support the Principles. The policy aligns to international ESG investment standards and applicable guidelines of regulatory bodies in China, covering organizational structure and policy, responsible investment strategy, product application and communication.
In terms of risk management, Ping An is incorporating exposure to ESG investment and asset risks into the Group’s investment risk mitigation framework. Secondary risks were identified in two categories – climate change and social risks – with corresponding criteria combined with the Group’s asset distribution (in terms of sectors and regions) in risk assessment. Ping An has proactively responded to the G20 Financial Stability Board’s initiative under the framework set out by the Task Force on Climate Related Financial Disclosures (TCFD). Under TCFD, Ping An has reviewed climate change risks and made disclosures on governance, strategy and risk management, metrics and targets.
Responsible investment is an emerging concept that requires collective effort from a broad range of stakeholders. Ping An highly values communication and dialogue. It engages investors and shareholders on ESG risks which has helped to formulate the Company’s responsible investment strategy. It has been in conversations with the Green Finance Committee of China Society for Finance & Banking, one of the most influential institutions in China, hosting ESG-themed roadshows to showcase responsible investment principles and best practices.
Environmental Protection + Social Inclusion: Diversification of Sustainability
In its insurance businesses, the Group has established the Ping An Sustainable Insurance System to incorporate ESG criteria into insurance operations. The Group will focus on the two dimensions of risk management – insurance product risk pricing and underwriting enterprise risk management – and sustainable insurance products.
Ping An is also active in the betterment of our communities through Ping An Rural Communities Support. As of 30 June 2019, there were Ping An Rural Communities Support initiatives in 13 provinces or autonomous regions across the country, with contributions of RMB10.373 billion to build 622 rural clinics, train 6,926 village doctors, build or upgrade 607 village schools and train 5,890 rural teachers.
Ping An Rural Communities Support complements Ping An’s business development in financing for agriculture, water safety and electricity, as well as agricultural insurance. The project laid a foundation for the influence investment model of Ping An, and set an example for China’s development-oriented poverty alleviation efforts.
Source: Ping An
With Zoe Zhang and Richard Knight, Execution Quant Group, CLSA
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