China ESG - Weekly news update Sep 2020 / 02

China greenlights BlackRock's retail fund unit as trade talks restart 

BlackRock  has received the official go-ahead from Chinese authorities to commence the build-out of its onshore fund management unit, the first of a flurry of foreign managers expected to break into China’s US$2.5 trillion retail fund market via a new onshore business. On August 21, the  CSRC granted  approval  to BlackRock to establish a wholly owned fund management company in the local market, only five months after the firm handed in its licence application on April 1.  

Source: Ignites Asia

Regulators finalize launch of ETF cross-listing scheme

Regulators in Hong Kong and China have announced the establishment of a new exchange-traded fund cross-listing framework with two pairs of ETFs approved to be sold in the respective markets. Hong Kong’s  Securities and Futures Commission  confirmed that it has authorised two locally listed ETFs to feed into two master Shenzhen-listed ETFs, essentially providing local investors with direct access to products on the mainland onshore market. Meanwhile, the CSRC said it had approved two Shenzhen-listed ETFs to tap into two SFC-approved ETFs that are listed on the Hong Kong Stock Exchange.  

Source: Ignites Asia  

Fitch Ratings Launches Corps Interactive ESG Dashboard, Enhances Heatmap for 2Q20 

Fitch Ratings has updated the interactive ESG dashboard for corporates; a tool that shows the distribution of Fitch's ESG Relevance Scores (ESG-RS) for 1,524 issuers globally. Fitch has also updated and enhanced the interactive ESG Relevance heatmap for 2Q20 with added regional and country selection capabilities. Users of the new dashboard are able to adjust it by region, country, sector and sub-sector. The tool also shows the distribution of ESG-RS changes in 2Q20 and will be updated and published each quarter.  

source: Fitch Ratings 

China Merchants bank prints first green bond 

The Hong Kong branch of China Merchants Bank (CMB) on September 2 priced its inaugural green bond amounting to US$800 million with an emphasis on low-carbon transportation projects. The Reg S five-year deal was priced at 99.464% with a coupon of 1.20% to offer a yield of 1.311%. The bond was issued under CMB’s newly-launched green, social and sustainability bond framework and it was a climate-certified offering under the Climate Bonds Standard. The bond proceeds will be used to finance the development of efficient, green, safe and affordable urban transportation systems. 

Source: The Asset

MSCI Launched ESG Ratings for Loans 

In response to institutional investor demand to integrate and report on ESG metrics across all fixed income asset classes, MSCI announced the expansion of MSCI ESG Ratings fixed income coverage to include loan securities. ESG Ratings now covers more than 1,000 unique issuers and 2,800 loan securities in the IHS Markit Global Loan Universe and 35% of the iBoxx USD Leveraged Index. The coverage expansion complements broad MSCI ESG Ratings coverage for corporate and government investment grade, emerging market, and high yield issuers.

Source: MSCI 

SSE first mentioned proactive ESG disclosure in the newly revised regulations

The Shenzhen Stock Exchange (SSE) revised the "Appraisal Measures for Information Disclosure of Listed Companies", which was issued and implemented on September 4. Article 16 states that the SSE assesses the listed companies' social responsibilities disclosure on the following aspects: (1) Proactively disclose social responsibility reports with substantial and complete content; (2) Proactively disclose the environment , Social responsibility and corporate governance (ESG) performance with substantial and complete content; (3) Proactively disclose the company’s participation in activities that comply with the country’s major strategic policies. In terms of appraisal, those who fulfill the above requirements will have 1 credit respectively.  

Source: Global Times