Recognizing the importance of sustainable investing, the UK and China have been working closely to encourage the growth of green and sustainable finance across the financial services industry under the UK-China Green Finance Taskforce, established in 2017. The UK-China Green Finance Taskforce is now co-chaired by Alderman William Russell, 692nd Lord Mayor of the City of London and Dr Ma Jun, Chairman of the Green Finance Committee (GFC) of the China Society for Finance and Banking. The Taskforce initiated the UK-China ESG Leaders Forum (ELF) in early 2021. The Forum is a practitioner-led initiative to further embed ESG integration into the UK and Chinese investment community and to promote best practice to support British and Chinese asset owners and managers on their transition journey to sustainable asset allocation.

The first report ”The Value Creation of Active Engagement,” suggests that the creation of a transition map is important for both global players and emerging market leaders, like China, to drive positive social, environmental and market outcomes and to help ensure an effective sustainable transition for their economies.

Such a transition map should outline and transparently communicate challenges, progress, and solutions in sectorial buckets including the energy, sustainable transition sectors.

• For investors,it is important to articulate ESG intentions through a stewardship and voting policy, and to clearly articulate measured outcome targets.

• For companies, advances in ESG reporting and the management of long-term value creation through continuously investing in ESG training and capacity building is a key to success in the market transition.
• For emerging markets such as China, establishing an engagement framework for institutional investors which fits local market needs would help to enable sustainable transition and make the race to net zero more attainable. 

The second report “Scaling Sustainable Solutions – Public and Private Markets,” suggests that to achieve net zero goals, the investment management sector needs to combine outcomes and actions.

• Sustainable solutions will reach scale when net zero goal setting is widespread and accompanied by clear outcomes and credible targets.
• Taking a whole of portfolio approach is crucial to unlocking the inherent scale of fixed income markets and learning from leading impact frameworks within private markets, to fully realise the potential of investment managers’ portfolios.
• It is important for the investment management community to work together to create the best solutions, taking a collaborative prototype approach to solution development.
• The investment management sector must consider beneficiaries’ long-term goals in solution designand adopt a multi-disciplinary approach to creating innovative strategies and breakthrough tools.

Read the full versions of both reports here: