Page 6 - CCFA Journal - Fourth Issue

Investment Forum 投资论坛 加中金融

There are many studies out there that have looked at ESG trying to understand whether ESG has driven outperformance, and we do see many cases
where ESG Indexes or products outperform. It is a complex area of study I absolutely believe that it is common sense to be looking at these issues as
part of a deeper understanding and preparedness of reputational and operational risks and opportunities for any company.
Some see ESG as a separate alternative asset class but it really should be mainstream. It is simply an expansion of fundamental data where we consider
other factors, such as employee turn-over rate, Y-O-Y changes in gender and racial diversity at Board, executive team , and carbon emissions, water and
chemical use, waste management, etc.

韩笑: 我们正处在一个 ESG 更替利益既得成为主流价值的宏观趋势中。对大多数人来说，问题不再是“是否应该将 ESG 视为我们职责
的一部分”。问题是“我们如何在鼓励改变的过程中，积极地利用 ESG 投资来实现财务目标?”你认为 ESG 的增长是否超过了传统的
指数业务? 投资者将如何受到形势变化的影响? 它目前的状态是什么?

Paula: ESG 显然越来越多地出现在世界各个国家。无论是气候变化还是 COVID - 19，都凸显了对 ESG 的迫切需要，不容忽视。最大的
问题之一是绿色拍卖，我们看到很多投资策略在 2020 年转化为 ESG 路径。因此，无论是欧盟还是美国证券交易委员会，政府机构都
在寻求提高公司言行的透明度。它们并不能说明这是否是一个好的投资，而是看你是否言行一致。围绕 ESG 有很多审查，因为现在越
来越难以区分公司在做什么。我认为需要开始深入研究这些策略的不同之处，它们都说是 ESG 的方向发展。在加拿大，80%的公司以
ESG 为基础，与美国相比规模较小。但这就是主流。

韩笑: 2016 年《巴黎协定》承诺到本世纪下半叶实现全球净零排放，将平均气温上升幅度控制在比工业化前水平低 2 摄氏度以内，将全
球变暖幅度控制在 1.5 摄氏度以内。但一些环境倡导组织担心，这些承诺是小而遥远的目标，几十年都不需要采取行动。对于投资者
来说，净零到底意味着什么?ESG 基金是如何运作的? 譬如，你们公司的投资原则和业绩如何?

Paulina: 首先，零排放听起来就像它应该的那样——公司应该能够减少排放。如何实现这一巨大目标的讨论和纠结是在保持增长的同
时控制排放并不是一件容易的事情。因此如果我们特别关注直接碳排放，力求将全球气温上升控制在 1.5 摄氏度。有这么多组织基于
科学方法（STBi）倡议通过投资林业或可再生能源来抵消碳排放，但这还不够。我们来看自己对这些公司的调查问卷: 它们是由第三
方审计的吗? 他们是否有持续合理现实的目标来实现净零？我认为成千上万的公司正朝着净零的方向发展，我们需要看到真的行动者。
有些公司在前期，有些在后期，罗马不是一天建成的。所以我们关注公司处在什么阶段，我们需要与专家(比如 STBi 的专家)保持一致，
进行充分分析，才把他们纳入投资范围。

对于我们公司来说，我们选择了大家认同的公司。我们拥有的公司都声称拥有清洁引擎和特斯拉一样，，并承诺将 30%的车队使用可
再生电动汽车。他们是第一批与美国邮政公司合作的队伍。这是一个很好的例子。我们也在寻找循环经济，比如那些寻求减少浪费解
决方案的公司。用切实的管理努力实现减排目标。

Xiao: We are amidst a macro trend shifting towards stakeholder capitalism led by ESG becoming mainstream. For the majority, the question is no longer,
“should we consider ESG as part of our mandate”. The question is “how are we actively pursuing opportunities with our investments that help us reach
our financial goals, while encouraging change in the process?” Do you think whether ESG growth is outpacing traditional index business? How will
investors be impacted by the changing landscape? What is its current status?

Paula: ESG has become extremely top of mind and products are gaining record assets. I think whether it’s climate change which today is at a state of
emergency for the planet, or COVID, which has highlighted tremendous inequities in the world, investors want to put their money into investment
solutions that allocate capital to companies doing well.
One of the biggest issues is green washing, where a lot of existing investment strategies have been transformed into ESG ones. The issue is lack of
intention or effort to understand and talk to the ESG process. The EU, the SEC, other government agencies are noticing and want more transparency
around what investment managers are doing and saying and whether their actions match their statements on ESG. There is a lot of scrutiny around
ESG because it’s now becoming increasingly difficult to differentiate what managers are doing. . I think you need to look under the hood to see the
differences in the strategies out there.

Xiao: The 2016 Paris Agreement committed to net-zero emissions globally by the second half of this century in order to keep the rise in mean
temperatures well below 2 degrees Celsius above pre-industrial levels, and to limit global warming to 1.5 degrees. But there are concerns by some
environmental advocacy groups that these pledges are small and distant targets that require no action for decades. Net Zero must be critically assessed.
For the investors, what Does Net Zero actually mean? How does an ESG fund actually work? How does Honeytree’s investment principle and
performance, for instance?
Paula: First off, Net Zero sounds exactly as what it should be - the company should be able to reduce as much carbon emissions as it is putting out.
This is a huge discussion and dilemma about how you would achieve that, because it’s not an easy thing to be able to continue to grow as a business and
maintain or reduce your emissions at the same time.

So, if we look specifically at the direct carbon production efforts, one of the most important objectives is focused on assessing companies’ goals to help
control global temperature increase to one and a half degrees. while there is a opportunity to offset the carbon emissions by investing in trees or in
renewable energy initiatives, this is not enough.
We essentially look at our own questionnaire: Are they audited by a third party? Do they have cohesive, understandable, and realizable objectives to
achieve net-zero, and is it meaningful? I think thousands of companies are moving into the direction of net zero. It needs to be a multiphase process
and continues progress and improvement is what we are looking for. and we need to really understand what those stages are, and we need to be aligned
with the experts such as the STBi who do scenario analysis and provide feedback and approvals.

For us at Honeytree, we look for a stakeholder approach and want to see environmental efforts along with other strong developments and changes in
other areas. . Like with Cummins, a company we own, they are helping to make cleaner and more efficient diesel engines, and have committed 30% of
their fleet to renewable electric cars. They were the first to work on this fleet with a postal company in the U.S. So that’s a great example of what we
have been looking at when researching companies, and we also look for circular economies such as those who seek solutions on reducing waste etc. We
can see that there are real management efforts to achieve the reduction targets.

CCFA JOURNAL OF FINANCE June 2021
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