What does ESG mean?

ESG is a proper noun in responsible investment. It is an acronym for three English words, namely Environmental, Social and Governance. ESG is an important standard to measure whether a listed company has sufficient social responsibility.

The ESG concept was first proposed by the United Nations Environment Programme in 2004. Since 2014, the scale of ESG asset management has grown at an annual rate of 25%. At present, more and more companies, investors, and even regulators have begun to pay attention to ESG, and major stock exchanges around the world have also deployed ESG.

One of the main problems of modern investment is how to obtain high returns from doing good deeds. Risks in non-financial fields such as corporate ethics and environment have become an important risk that cannot be ignored in investment, and the negative elimination method of ESG investment can effectively avoid trampling. At present, the mainstream view believes that the implementation of ESG's investment philosophy can better avoid or eliminate companies with high risks, flash crashes or "black swan" risks, allowing investors to obtain higher returns. A Morgan Stanley survey revealed that nearly 80% of individual investors want to invest in ESG funds to obtain financial returns and have a positive impact on the environment. Among them, millennial investors account for a large proportion. On January 8, MSCI (Ming Sheng) launched 15 fixed-income ESG and factor indexes, designed to meet the needs of investors to formulate strategies in keeping with investment goals. After sorting out the "black swan" incidents of listed companies, the 21st Century Capital Research Institute found that it is possible to look for corporate risk clues in capturing such ESG signals, while guiding listed companies to pay attention to and strengthen the ESG concept. Taking Changsheng Biology as an example, this company was delisted at the end of November and officially bid farewell to the A-share market. Prior to this, Changchun Changsheng caused public concern because of the vaccine incident, which had a bad impact on the market. The stock price of Changsheng Biotech, the parent company of Changchun Changsheng, continued to fall, and the company eventually reached the point where it was forced to be delisted. The reason is that this is also a manifestation of the company's neglect of social responsibilities and major flaws in internal governance. In the case of * ST Kangde, "100 billion white horse stocks" transformed into a "spokesperson" for various capital market scandals. Among them, problems arising in corporate governance are also the key reason. The 21st Century Capital Research Institute believes that some market forces ignore ESG signals, causing financial institutions such as banks, securities firms, public funds, and trusts to step on the thunder, and the domestic market ’s ESG field information collection, information analysis and research, and the financial use of information are short. The board is not unrelated. In the past, after the mines stepped on the mines, continuous lowering of the valuation was accompanied by fluctuations in the net value of the products. With the popularization and emphasis of the ESG investment concept, the effectiveness of "mine clearance" will be improved.