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MSCI Launches Climate Change Indices for China Stocks

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Investing the FUTURE of China… United Great Dragon Fund… Description video: While there are many investment strategies when comes to investing in China, our preference is to invest in the FUTURE of China…\nAnd we believe, the future of China is […]

Investing the FUTURE of China… United Great Dragon Fund…

Description video:
While there are many investment strategies when comes to investing in China, our preference is to invest in the FUTURE of China…\nAnd we believe, the future of China is INNOVATION…

MSCI Launches Climate Change Indices for China Stocks

On Tuesday, MSCI released two climate change indices that allow Chinese equity investors to target lower carbon companies.

This is the next step by MSCI to promote environmental, social and governance (ESG) standards in China, where the government is striving to find a difficult balance between reducing pollution and supporting the growth of the economy hit by the coronavirus..

The newly created climate change indices were based on the MSCI China and MSCI China A indices. Compared to their parent indices, the new indices give more weight to less polluting companies.

For example, Internet giant Tencent has an additional 1.61% weight in China’s MSCI Climate Change Index, while LONGi Green Energy Technology gains an additional 1.4% weight..

Jack Lin, Head of Customer Service Asia Pacific at MSCI, Expects Investors to Pay More Focus on Climate Change Indices.

«It’s not about the worldview. It’s about economic efficiency. It’s about higher returns and lower risks, Lin said. – The market will drive down the stock prices of companies with poor ESG compliance».

MSCI China Climate Change Index has surpassed its baseline by 0.4% year on year in the past 6.5 years, MSCI reports.

Shuo Xu, Vice President of MSCI Research, said the index publisher is already in talks with a number of organizations to create investment products based on the new indexes.

The launch of the index comes amid China’s push to open its capital markets. The involvement of foreign investors caring for ESG puts pressure on listed companies in China, where ESG disclosures are often seen as sporadic, irregular and inconsistent.

MSCI Launches Climate Change Indices for China Stocks