China launches first ESG index, plans corporate governance addition

Joint venture between China Securities Index and Italy’s ECPI

China has taken a major step in the promotion of sustainable investment in the country with the launch of its first ESG-based (environmental, social, governance) index, a joint venture between Chinese Securities Index Company (CSI) and ECPI, the Italian-based ESG index and research group. The CSI ECPI China ESG 40 Equity Index is made up of 40 domestic companies listed either on the Shanghai or the Shenzhen Stock Exchange, both joint owners of CSI. The index constituents will be the best Chinese companies meeting its sustainability criteria.
Professor Hu Ruyin,
director of the research centre
at theShanghai Stock Exchange, speaking at the Responsible Investment Association Australasia conference in Sydney last week, said the index was scheduled to launch on September 17.
Ruyin said the exchanges were also examining the launch of a separate corporate governance index. The launch of the new ESG benchmark, he said, followed on from the creation of a Chinese CSR index in August this year. Ruyin said China currently had just one domestic SRI fund run by Industrial Fund Management, but added: “In the future more Chinese investors will make the effort to promote SRI funds.”