What numbers further tell about “S” in ESG investing amid the pandemic? / 傳染病大流行期間,有哪些數據詳細解說了ESG投資中的“ S”?

Green Finance Advisor of Friends of the Earth (HK) / 香港地球之友綠色金融顧問

March 2020 will go down in history as one of the most intense and sharpest sell offs people have ever experienced due to the Covid-19 outbreak worldwide. The MSCI World stock index fell by 14.5 per cent, meanwhile, according to Morningstar, 62 per cent of global environmental, social and governance-focused large-cap equity funds outperformed the benchmark. In hindsight, it would be interesting to backward-engineer the reasons behind the outperformance amid the public health crisis, which may shed more lights on how investors should perceive ESG investing, especially for “S”, which the traditional financial analysis used to understate its importance.

On top of the consideration of companies’ financial strength by ESG strategies given its quality bias, the enhanced risk management framework with the outright focus on ESG factors could have aided companies’ performance the difficult market environment. The pandemic has underlined the importance of disaster preparedness, continuity planning and employee treatment through benefits, as they would determine whether a business can continue its operations amid the lockdowns and social distancing, posing important implications for their performance. Meanwhile, many companies such as HKTV and other MNC also manufacture medical supplies, it highlights the role that private companies could play in addressing social problems, demonstrating that corporate reputation has been strongly positively correlated to financial performance.

Most importantly, the vision behind ESG investing rides on how the economy is being reshaped at the moment in order to accommodate the public health crisis. To combat the spread of the coronavirus, the global economy is severely impacted with the regional lockdowns and social distancing in place. The changing backdrop highlights the importance of sustainability and companies’ ability to adapt to changes in the societies to which they belong, as none of the companies can completely shrug off the impact from social or environmental changes. It is natural that ESG would outperform as sustainable investment takes into account the future and positive social impact, this manifests itself in the growth of the telecommuting company “Zoom” which many of us may be using now when considering the social benefits it delivers.

A wide range of social and environmental issues will reach their critical points in the coming decade, such as climate change, political stability and the future industrial revolution driven by technological advancement. Companies’ fortunes will hinge on whether they can weather these disruptive challenges in future. From investors’ perspective, as we can envisage that the increasing risks stemmed from environmental and social issues would be moving up corporate agendas to drive long-term development plans, we have to examine companies and identify winners among them.

虧得新型冠狀病毒於全球爆發,相信2020年3月將成為人類歷史上經歷過的最激烈、最緊張的拋售之一。MSCI全球指數下跌了14.5%,但與此同時,據Morningstar報道,全球62%以環境、社會與管治為重點的大型股本基金表現勝過標準。現在看來,事後探討在公共衛生危機中仍能維持良好表現的背後原因是有趣的,因為這有可能為投資者提供更多啟示,提示他們該如何看待曾被傳統財務分析低估重要性的環境、社會與管治(ESG)投資,特別是當中的「社會(S)」。

除了考慮將有可能牽涉到質素偏差的ESG策略對公司財務實力的影響外,完全側重ESG因素的風險管理加強框架可能更有助公司於艱難的市場環境中維持運作。這場傳染病大流行反映了備災、可持續性計劃和給予員工津貼的重要性,因為這些因素將決定企業能否在全球封鎖和保持社交距離的情況下繼續經營,並對其業績構成重要影響。同時,很多公司,如香港電視(HKTV)和其他跨國公司也在生產醫療用品,這凸顯了私營公司在解決社會問題中可以發揮的作用,亦顯示了公司聲譽與財務業績之間存在著顯著和正面的相互關係。

更重要的是,環境、社會與管治(ESG)投資背後的主要目標是在現階段適應公共衛生危機下如何重塑經濟。為了對抗新型冠狀病毒的傳播,全球經濟受到區域性封鎖及強制保持社交距離的嚴重影響。不斷變化的環境因素反映可持續性和公司適應其所屬社會變化的能力的重要性,因為沒有一間企業能夠完全擺脫社會或環境變化的影響。由於可持續投資會考慮未來和積極的社會影響,ESG的表現突出是理所當然的,這些好的表現充分體現在遙距工作資訊技術公司Zoom的業務增長中。現在有很多人都在使用它,就是因為考慮到它帶來的社會效益。

在未來十年內,各式各樣的社會和環境問題將會達至臨界點,當中包括氣候變化、政治穩定性以及由技術演變所推動的未來工業革命。一眾公司的命運將取決於能否在未來應對這些顛覆性的挑戰。從投資者的角度來看,由於我們可以預見在不久的將來,環境和社會問題所帶來的日益增加的風險會被視作公司的重要事項,並促使企業制定長期發展計劃,因此,我們必須積極研究各企業並尋找當中的「贏家」。

How are ESG funds helping to build a sustainable world? / ESG基金如何幫助建立可持續發展的世界?

Green Finance Advisor of Friends of the Earth (HK) / 香港地球之友綠色金融顧問

According to various reports, ESG equity funds, despite falling, have outperformed the peers. Specifically, majority of the sustainable index funds, whether in developed markets or in the emerging markets, have been holding up better than the traditional index funds, of which the prices declined even more. This could be contributed to the fact that many of these ESG funds has little or no investment to energy, airlines and resources companies, which are among the worst performers in the stock market since this pandemic outbreak.

While minimizing exposure to companies with high carbon footprint is important, there are a lot that investors can do in sustainable investing. Avoiding risks and getting positive financial return is certainly important. But investors who care about ESG and sustainability would also want to bring positive social and environmental impact through companies they invest. We doubt this purpose can be effectively achieved through the current approach of most indexed funds or passive funds. These funds could be doing performing fairly well by avoiding fossil fuels and other so-called sins stocks by adopting negative / exclusionary screening. However, how much time and resources they spent in understanding the sustainability strategies of companies and engaging with them on improving their ESG metrics is the question.

Some investors were not necessarily interested in companies’ business model and process but just wanted to check their internal framework to demonstrate that they had completed their due diligence. This approach is hard to result in positive changes for companies, environment or society. On the other hand, a more value adding, constructive approach, i.e. active engagement, is preferred for investors and companies to advance. Active engagement can help companies better manage ESG issues and understand both the risks and the opportunities arising from sustainability development. Investors can learn the issues that companies and their businesses encounter and solidify their confidence in the companies in which they invest. The mutual learning process should be on-going and fruitful, resulting in long-term value creation for both parties. How much effort is put to engaging companies for positive changes and opportunities exploration in ESG? This is a question that investment managers have to ask themselves.

Passive funds, particularly ETFs, are popular for compelling reasons. Low cost and tax efficiency are certainly major benefits for investors. Thanks to the development of passive funds and ETFs, the barrier for ESG investing is lower and more people and capital that care about social responsibility and sustainability can participate. Corporates seeing this rising trend will also be more aware of ESG and will take the issue more seriously which is also a force for good. But another reason for investors choosing passive investment is the disappointment in the historical performance of the traditional active funds. The up and rising demand for ESG and sustainable investing is providing the opportunities for active managers to shine again ── only for those who do not deny climate change and take the sustainability subject seriously.

Source: https://www.morningstar.com/articles/976361/sustainable-funds-weather-the-first-quarter-better-than-conventional-funds

根據各種報告,儘管ESG股票基金價格下跌,但其表現卻優於同行。具體而言,無論是在發達市場還是在新興市場,大多數可持續指數基金的表現都優於傳統指數基金,後者的價格下跌幅度更大。這可能是由於許多ESG基金沒有持有或只持有少量能源、航空公司和資源公司的股票,這些行業都是自大流行爆發以來在股市中表現最差的行業。

儘管最大程度地減少對高碳足跡公司的投資很重要,但投資者在可持續投資方面可以做得更多。避免風險並獲得積極的財務回報固然也很重要,但是,關心ESG和可持續性的投資者也希望通過他們投資的公司帶來積極的社會和環境影響。我們懷疑通過目前大多數指數基金或被動基金的方法能否有效實現這一目的。通過採用否定/排除篩選,避免投資化石燃料和其他所謂的罪惡行業,這些基金可能會做得不錯。但是,他們花了多少時間和資源來了解他們所投資的公司的可持續發展戰略以及與他們積極交流以改善他們的ESG指標 ?

一些投資者不一定對公司的業務模型和流程感興趣,而只是想檢查其內部框架以證明他們已經完成了盡職調查。這種方法很難為公司、環境或社會帶來積極的變化。另一方面,對於投資者和公司而言,更可取的是積極跟公司溝通,以幫助公司更好地管理ESG問題,並了解可持續發展帶來的風險和機遇。投資者可以了解公司及其業務遇到的問題,並鞏固他們對所投資公司的信心。相互學習的過程應該持續進行並富有成果,從而為雙方創造長期的價值。為使公司參與ESG的積極變革和機遇探索付出了多少努力?這是投資經理必須問自己的問題。

被動型基金,特別是ETF,在過去幾年大行其道自有其吸引之處。低成本和稅收效率無疑有利投資者。得益於被動型基金和ETF的發展,ESG投資的壁壘更低,令更多關注社會責任和可持續性的人和資本可以參與ESG投資。看到這種上升趨勢的企業也將更加關注ESG,並將更加重視可持續發展,這能為ESG帶來正能量。但是,投資者選擇被動投資的另一個原因是傳統主動基金的過去表現令人失望。對ESG和可持續投資不斷上升的需求為主動基金提供了再次發光的機會──但僅適用於那些不否認氣候變化並認真對待可持續性主題的業者。

資料來源:https://www.morningstar.com/articles/976361/sustainable-funds-weather-the-first-quarter-better-than-conventional-funds

創效基金

香港地球之友綠色金融顧問

不少朋友問在下,何謂綠色投資,綠色投資真的綠色嗎?

過去二十年,大眾對環保及社會責任意識大大提升,各種不同的綠色投資產品如雨後春筍般湧現,不同的花巧產品名稱亦遍地開花,如社會責任投資、綠色基金、環保基金、創效基金等等,在下今天要說的,是ESG 基金與創效基金的分別。

ESG 基金顧名思義,就是以公司ESG 表現作為投資選擇,不管你是地產、零售、生產,只要你依據現時ESG 國際標準,做出高度披露,並願意進一步改善減排或善待員工等,便會得到很高的ESG 評分。現時ESG 基金是根據某數間評分機構對企業篩選進行投資。創效基金 (impact investment) 與ESG 基金的理念完全不同,創效基金是希望通過投資,對地球創造出正面效果,所以他們的投資對象,是公司的業務性質,必須能對地球產生正面影響,如風能、 太陽能、可降解塑料等。

經過簡單的解釋,相信各位已清楚明白,創效基金對地球的環境效益,當然遠遠比ESG基金為佳,但一般的小投資者們,是很難投資到創效基金的,最主要原因是,創效基金的投資方,很少會是股票基金投資,他們的投資方,大都希望投資到還未上市的公司,原因是公司如果已經上市,對地球的效益已存在,但他們支持一所小公司,就會增加這類公司在地球上的數量,對地球的效益才能達到最大化。

這類創效基金,大部分以環保基金的形式出現。少部分以社會責任基金方式出現,如幫助少數民族文化承傳等。2000年初,創效基金開始在大中華地區出現,由2005年到2015年間,數以百計以創效基金為包裝的私募基金誕生,但可惜的是,近年來這類創效基金卻急速沉寂,很多朋友問在下,是否因為創效基金不賺錢,所以無法生存?

筆者曾經為一個家族基金管理他們的創效基金,在我看來,任何私募投資,不管是不是創效,不管哪個行業,作為基金經理,我們看的當然是項目效益,基金經理不會刻意找理想主義者,一般創業者,他們都是因為看到別人察覺不到的機會,奮勇創業爭取利益,所以在筆者眼中,每個行業不管是IT、地產、環保,都是一樣,IT行業項目較多,機會較多,但死亡機率亦相對較高,當中的生生死死,與行業毫無關連,說到底,也是基金經理的能力與經驗,最直接影響基金回報。但為甚麼近年的創效環保基金,會在世界環保大潮下,出現退潮現象?

以在下的觀察,人才短缺才是最重要的關鍵。2005年時大家看見世界大趨勢,爭相擠進環保投資,但環保並不能算是一個行業,當中單是生產,在下就看過不下數十個不同的生產行業,例如環保紙生產、可再生降解塑料生產、友善林業管理的森林原木生產、污水處理用的污泥脫水劑生產等等,當中每個行業都有自己的學問。一般基金經理,通常會精通一個或數個行業的商業模式,但面對環保的千變萬化商業模式,很容易犯下不可挽救的錯誤判斷,基金回報一敗塗地,退潮是必然現象。

現時在香港或大中華地區,環保人士多集中在非政府組織,他們對環保當然認識深入,但對商業模式及工業運作一竅不通,基金經理卻對環保毫無了解,在這個缺口無法補足前,我們仍很難看到創效基金的大力發展。

Does the Pandemic reflect the importance of ESG? / 冠狀病毒大流行反映了ESG的重要性?

Michele Leung, Green Finance Advisor of Friends of the Earth (HK) / 香港地球之友綠色金融顧問 Michele Leung

The COVID-19 outbreak presents significant risks across sectors in global economy. One topic that has been widely discussed is the labour management and human capital, and how companies are managing through these times. For example, in aviation industry, lack of strong labour management program and low cash ratio could elevate business risk. The lapses in supply chain labour management may deepen concerns on business continuity for sectors like technology hardware. For retail food & staples, they are also facing public scrutiny as protecting their employees while ensuring continued access to essential good. Companies without regular employee channels and a poor track record regarding health & safety would likely to be impacted. On the other hand, companies that have been positioned to face the human capital challenge by offering systemic training programs, competitive benefits and widespread communication channels are likely to prove its resiliency.

ESG has never been more important than now in the midst of pandemic. It has been proven that ESG should be considered as one of the risk factors, and investors need to understand the ESG characteristics and the impact on their portfolios. Recent studies have also shown analytically that ESG as a positive distinctive driver of performance in this particular period.

While the duration of the crisis is uncertain, the economic consequences of pandemic will certainly last for few quarters. Investors may want to take the current opportunity to reset the portfolio, integrate ESG into their strategy, or at least, adding the ESG transparency to their portfolios.

新型冠狀病毒疫情對全球經濟和各行各業帶來重大風險。最受廣泛討論的話題便是人力資源管理及人力資本,以及企業在這段時期怎樣進行管理。例如,在航空業界,缺乏強而有力的人力資源管理方案和較低的現金流動比率可能會增加業務風險。供應鏈上人力資源管理的連續失誤可能會加劇技術硬件等行業業務的擔憂。零售食品和原材料行業也同時吸引著公眾視線,他們在保障員工的同時也需要確保持續的基本供應。沒有正規僱員溝通渠道、並且在健康和安全方面往績差的公司亦可能會受到影響。但在另一方面,有提供系統化培訓計劃、具競爭力的員工福利和廣泛溝通渠道來面對人力資本挑戰的公司,則有較大機會顯示其彈性。

在這場傳染病大流行發生之前,ESG從來沒有如此重要過。事實證明,ESG應該被視為眾多風險因素之一,投資者需要了解ESG的特性及其對投資組合的影響。 最近的研究和分析也顯示,ESG是這個特殊時期能夠推動業績的主要元素。

儘管我們不確定這場危機會持續多久,但瘟疫的經濟影響肯定會持續幾個季度。 投資者需要藉此機會重設投資組合,將ESG納入其策略,或至少在其投資組合中增加ESG的透明度。