The worldwide battle against the Covid-19 pandemic has turbocharged sustainable investing’s trajectory from niche concept into mainstream thought. More and more of the world’s largest asset owners now require environmental, social and governance (ESG) metrics from asset managers when awarding mandates.
During the first quarter of 2020, discussions between The Asset’s editors and investors point to a sharp increase in interest in sustainable investing when compared with 2019 when the groundwork for this increase was laid.
The Asset Triple A ESG Investor and Fund Management Awards 2020 cover that period and start with the recognition of the significant sustainable investment initiatives undertaken by proactive Asian asset owners in Japan, China, and Taiwan.
Japan’s Government Pension Investment Fund (GPIF) takes the award as ESG Pension Fund Investor of the Year. GPIF’s most recent and significant ESG investment achievements involve influencing the actions of external asset managers and corporates.
These actions include requiring its external asset managers to nominate corporates to improve and advance their ESG practices, requesting external managers disclose the details of their proxy voting records, asking external managers to submit their ESG report on a regular basis, and implementing a performance-based fee structure and multi-year contracts in active investment.
As one of the biggest asset owners in the world, the GPIF is in an excellent position to push similar practices among other asset owners and managers in Asia.
Ping An Insurance Group takes the title of ESG Investor of the Year for Insurers, China. In 2019, Ping An became the first asset owner in China to announce exclusions for investing in high-polluting industries. This has particular significance in the context of China’s increased reliance on coal-fired power plants following the substantial slowdown of its economy in 2018.
Before that, the government had previously committed to shifting its energy mix to 20% renewables, including nuclear and hydroelectric energy. Ping An’s climate-focused actions are part of a shift by the global insurance industry away from high-polluting industries, particularly coal.
The exclusion of high-polluting and energy-intensive industries from its portfolio also follows a series of climate-related actions taken by Ping An in 2019. It was the first Chinese insurer to sign the UN Principles for Responsible Investment, the Climate Action 100+ investors group, and adopt a number of criteria under which it would no longer insure coal projects.
Taiwan Life Insurance Company took the trophy as ESG Investor of the Year for Insurers, Taiwan. Taiwan Life became the first Taiwanese insurer in Asia to support offshore wind development, a breakthrough for insurers and sustainable investing that was nearly five years in the making. It was one of the mandated lead arrangers for Formosa 2, a 376-megawatt offshore wind power project that was commissioned in December 2019.
Taiwan Life played a major role in lobbying Taiwanese regulators to amend the nation's Insurance Act to allow insurance companies to participate in ECA (export credit agency) guaranteed project finance. This is a significant development since project finance transactions, as an asset class, match the long-term investment horizon and risk profile of insurance companies. As an asset owner, Taiwan Life is well-positioned to support the government’s ambitious goal of building 5.5 gigawatts (GW) of offshore wind farms by 2025, with a total capacity of 15.5 GW by 2035.
BNP Paribas Asset Management (BNPP AM) wins the award as ESG Asset Management Company of the Year for Asia. It also wins for Indonesia and Malaysia. BNPP AM strengthened its ESG commitment in 2019 by putting in place an innovative ESG validation committee to ensure the robust implementation of its sustainable investment commitments across asset classes.
BNPP AM also is a trailblazer in sustainability investing thought leadership in Asia and Europe, where it offers sustainable investment solutions for its clients.
China Asset Management took the title of ESG Asset Management Company of the Year, China. The firm published its own sustainability framework and launched a number of ESG-focused funds in 2019.
As well, E Fund Management are “highly commended” as ESG Asset Management Company of the Year, China. E Fund has also published its own sustainability framework and launched several ESG funds.
The best investors and ESG awards for The Asset Triple A Sustainable Investing Awards 2020 will be featured in the coming weeks. Sustainability initiatives and innovation will also be recognized.
To see the ESG Investor of the Year Awards 2020, please click here.
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