Asset Owner Attitudes Towards Engagement and Stewardship

In 2022, the China Sustainable Investment Forum (China SIF), SynTao Green Finance, and China Southern Asset Management jointly conducted a survey on responsible investment by asset owners in China. Based on last year's survey, participating asset owners have already demonstrated a considerate awareness of ESG (Environmental, Social, and Governance) investment. Having established ESG governance structures, the majority of respondents acknowledged the effectiveness of ESG investment strategies. However, there still existed a disparity between domestic and foreign owners on their perception of engagement and stewardship.

2023 Asset Owners Survey foucuses on engagement and stewardship practices of domestic and foreign asset owners, aiming to gain deeper insights into the attitudes and needs of asset owners when carrying out stewardship in the Chinese market. We hope the research can provide reference for investment managers in China, helping them to effectively address the need on stewardship from asset owners.

We will present the findings of the new survey at the 8th World Investment Forum (WIF), hosted by UNCTAD, this coming October.

We extend a sincere invitation to you to participate in this survey. The survey is thoughtfully designed with primarily multiple-choice questions, aiming to take at most 10 minutes to complete. Participants have the option to decide whether or not to disclose their name or the represented agency. We consider privacy our utmost priority and guarantee that all responses will not be disclosed to the public or shared with other parties without your consent.

We look forward to your reply and participation! If you have any questions, please don't hesitate to contact us at contact@chinasif.org.
1.Background Information
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1.
Where is your organisation based?
Mainland China
Hong Kong, China
The Asia Pacific
Europe
North America
The Middle East
Others
*
2.
What is your organisation's investment in China as a percentage of AUM? (Offshore organisations only)
Less than20%
20%-39%
40%-59%
60%-79%
80%-100%
*
3.
In which range is your organisation's AUM (USD)?
Below $ 1 billion
$1 bn - $5 bn (not including $5 bn)
$5 bn - $10 bn (not including $10 bn)
$10 bn - $50 bn (not including $50 bn)
$50 bn - $100 bn (not including $100 bn)
More than $100 bn
*
4.
What is the nature of your organisation?
Pensions
Insurance
Sovereign Fund
Family Office
Endowment
Bank wealth management (Mainland China only)
Others
*
5.
What percentage of your organisation's assets in China are managed by external managers?
Less than 20%
20%-39%
40%-59%
60%-79%
80%-100%
2.Awareness and Practices of Engagement and Stewardship
*
6.
To what extent does your organisation practise engagement?
We have engagement policy and are already engaging with investees and policymakers with the aim to produce improvements in the sustainability profile of the system as a whole to maximise overall long-term value for beneficaires
We have engagement policy and are already engaging with investees with the aim to produce improvements in the sustainability profile of assets held over time
We have started to engage with investee companies to fuifill regulatory/beneficiary needs
We are aware of the concept. However, no engagement action has been taken yet.
Not aware of the concept, but we are planning to start researching within the next three years
Not aware of the concept, and we have no plans to conduct engagement activities within the next three years
*
7.
Does your organisation have policies related to stewardship?[Multiple]
We have standalone policy on stewardship
Stewardship is included as a part of our responsible investment policy
Stewardship is included in other policies
We have a standalone policy for engagement
We have a standalone policy for voting
We do not have policies related to stewardship but plan to develop them within the next three years
We do not have policies related to stewardship and have no plans to develop such policies within the next three years
*
8.
Who is responsible for conducting your organisation’s engagement actions? [Multiple]
Engagement is handled internally by dedicated stewardship staff
Engagement is handled internally by investment or other teams
Investment managers are required to engage with companies in the portfolio
Engagement is outsourced to service providers
Not sure
My organisation does not conduct engagement
*
9.
How many employees (or full-time equivalents) does your organisation have that work on engagement?[Multiple]
More than five full-time (equivalents) employees
1-5 (inclusive) full-time (equivalents) employees
Assigned part-time employees to work on engagement
Employed an external team for engagement-related work
None of the above
*
10.
Which factors would motivate your organisation to incorporate ESG factors into engagement? (1 being the least motivating, and 5 being the most motivating)
12345
Client/Beneficiary demand
Client/Beneficiary demand
Regulatory requirements
Regulatory requirements
Mitigating ESG risks
Mitigating ESG risks
Generating excess returns
Generating excess returns
Enhance organisational reputation/responding to public pressure
Enhance organisational reputation/responding to public pressure
3.Implementing Engagement and Stewardship in China
*
11.
How does your organisation see the importance of engagement when investing in China?
Very important
Of some importance
Fairly important
Not very important
Unimportant
*
12.
What approaches does your organisation adopt when conducting stewardship in China? [Multiple]
Engagement with current or potential investees/bond issuers
Collaborative engagement
Engage with policymakers
Voting at general meetings
Submitting shareholder resolutions/proposals
Presence on the board of directors and board committees of the investee
Litigation
Public statements (e.g., media articles)
None of the above
*
13.
What escalation measures did your organisation, or the external investment managers or service providers acting on your behalf, use (in the past three years) for your listed equity holdings?[Multiple]
Joining or broadening an existing collaborative engagement or creating a new one
Filing, co-filing, and/or submitting a shareholder resolution or proposal
Publicly engaging the entity, e.g. signing an open letter
Voting against the re-election of one or more board directors
Voting against the chair of the board of directors, or equivalent, e.g. lead independent director
Divesting
Litigation
Other
(In the past three years) we did not use any of the above escalation measures
*
14.
In your organisation's investments in China, which of the following asset classes has your organisation conducted engagement? [Multiple]
Listed Stocks
Fixed Income
Private Equity
Hedge Funds
Infrastructure
Real Estate
Commodities
Others
None of the above
*
15.
What ESG issues has your organisation engaged with investees in China? [Multiple]
Environmental - Climate Change
Environmental - Pollution Control
Environmental – Energy-saving and Consumption Reduction
Environmental – Biodiversity
Environmental – Other
Social - Labour Rights
Social - Product Quality
Social - Customer Relations
Social - Information Security
Social - Community Relations
Social - Supply Chain Management
Social – Other
Governance - Business Ethics
Governance - Governance Structure
Governance - Compliance
Governance – ESG Information Disclosure
Governance – Other
None of the above
*
16.
What information is taken as reference when engaging with investees? [Multiple]
ESG rating
ESG controversy
Annual reports
ESG/CSR/Sustainability Reports
Proxy voting research reports from service providers
Research reports from brokers
Other
None of the above
*
17.
What are some of your organisation’s difficulties in engaging Chinese companies?[Multiple]
Lack of understanding of the concepts and approaches of engagement
Insufficient capacity for engagement analysis
Unfamiliarity with relevant governance regulations in China
The governance regulations in China are not applicable to the engagement processes of my organisation
Difficulties in accessing Chinese companies
Lack of responsiveness from investee companies
Language barriers
Difficulties in obtaining ESG information from investee companies
Challenges in achieving desired outcomes from engagement efforts
Lack of investment managers offering established engagement methodologies
Lack of professional service providers specialising in engagement
Others
4.Stewardship Requirement for Investment Managers
*
18.
When selecting an asset manager in China, does your organisation consider their knowledge and capability in engagement?
Always considers
Sometimes considers
Not at the moment, but plans to consider it within the next three years
No, and neither in the next three years
*
19.
In China, which engagement capabilities of an asset manager do your organisation value the most? (1 being the least valued, and 5 being the most valued)
12345
Involvement of engagement in governance structure
Involvement of engagement in governance structure
Professional talents with engagement expertise
Professional talents with engagement expertise
Systematic engagement approaches and methodology
Systematic engagement approaches and methodology
Rich experience of engagement practices
Rich experience of engagement practices
Capability on ESG performance and risks analysis
Capability on ESG performance and risks analysis
*
20.
How does your organisation perceive the capability of Chinese investment managers in stewardship?
Excellent, capable of providing professional stewardship services
Good, able to meet my organisation’s needs
Average, they have limited capacity to fulfil the tasks delegated by my organisation
Poor, unable to fulfil the tasks delegated by my organisation
My organisation does not have specific requirements for the stewardship capability of Chinese investment managers
*
21.
What should be regularly reported by the investment managers your organisation commissioned in China in terms of their engagement performance? [Multiple]
The asset classes and proportions covered by engagement activities
Engagement policies
The objectives of their engagement activities
Quantitative measures of engagement activities
Escalation actions taken when engagements are not successful
The main ESG issues covered in engagements
The outcomes of engagements
Practices on collaborative engagement
No disclosure is required regarding engagement activities
*
22.
Which of the following best describes your organisation's default position with regards to collaborative stewardship efforts such as collaborative engagements?
We recognise that stewardship suffers from a collective action problem, and, as a result, we actively prefer collaborative efforts
We collaborate when our individual stewardship efforts have been unsuccessful or are likely to be unsuccessful, i.e. as an escalation tool
We collaborate in situations where doing so would minimise resource cost to our organisation
We do not have a default position but collaborate on a case-by-case basis
We generally do not join collaborative stewardship efforts
5.Other Information
*
23.
Would you like to disclose your (organization’s) name in the research report based on this questionnaire? [Multiple]
I would like to disclose my organization’s name
I would like to disclose my position
I would like to disclose my name
I would like to keep anonymous
*
24.
Would you like to have a follow up-call with China SIF to have an in-depth discussion about ESG investments in China?
Yes, Email or Tel:
No
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