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Just a few years ago, it seemed that most of Wall Street was embracing the world of environmental, social and governance financing; now it appears the tide may be turning, with investors having pulled more than $14 billion from sustainable funds this year.1   Asset managers have been dropping the word “sustainable” from the names of their funds because of concerns about regulations and reputation.2 Meanwhile, NASA scientific data shows that climate change is not going away.3 The Earth has already warmed 1.1ºC since the Industrial Revolution, according to IPCC science data. NASA data shows that atmospheric CO2 levels have reached twice that of the average over the past 800,000 years.4 

Still, S&P Global Market Intelligence data shows that more than 80% of the world’s largest companies "are reporting exposure to physical or market transition risks associated with climate change, and a similar share are engaging in reducing corporate emissions."5The ESG rating service Sustainalytics covers more than 14,000 companies worldwide across 42 industries.6

China, while a leading emitter of CO2,7 is also a leader in decarbonization. In June, China reported that its installed renewable energy capacity exceeded thermal, at 50%, for the first time, although coal still accounted for 56% of consumption last year.8 China’s solar capacity is now 228 gigawatts, more than the rest of the world combined,9  according to Global Energy Monitor. Wind capacity is at 310GW, placing China top in the world. Another 750GW of new wind and solar projects are due to come online, which indicates China will hit its 2030 target of 1,200GW five years early.10

Companies in China are being encouraged to integrate ESG into their corporate strategy, while financial service companies are required to include sustainability indicators in their executives’ appraisals.11

Richard Sheng, secretary of the board of directors at Ping An Group.

“With the current global focus on ESG in business, there are various voices in the international community emerging on sustainable development,” says Richard Sheng, secretary of the board of directors at Ping An Insurance (Group) of China.12

The company has identified two major emerging risks that could have the greatest impact on its future business. These are demographic change and health, and the risk of climate change.13 Ping An has turned these into sources of competitive advantage, first through the development of a health care and elderly care ecosystem used by some 147 million of its 230 million customers.14 It is also innovating through green financing of new carbon capture projects as well as launching new ocean and forestry carbon-sink insurance and mangrove biodiversity protection initiatives.

In the latest company sustainability report, Ping An’s founder and chairman, Peter Ma, said the new health care ecosystem provides medical needs for society now and in the future.  “Ping An has created three core service models, namely ‘Insurance + Health management,’ ‘Insurance + Home-based elderly care’ and ‘Insurance + High-end resort community-based elderly care,’ to enable old people to enjoy one-stop medical, health and elderly care services."15 

Ping An is committed to the expansion of green finance. In June this year, the group subsidiary Ping An Bank agreed to provide green financing for a new carbon capture project with Baotou Iron and Steel Group Co., Ltd. The carbon capture, utilization and storage (CCUS) demonstration project will have a total capacity of 2 million tons. It is expected to assist Baotou Iron and Steel Group in achieving a reduction in carbon dioxide emissions of 365,300 tons annually, equivalent to planting nearly 19 million trees. The first phase, targeting 500,000 tons, began construction in June 2022.16 

In February, Ping An launched its first ocean carbon-sink index insurance policy for marine ecosystem protection in the city of Dalian. This follows Ping An P&C’s pilot of forest carbon-sink remote sensing index insurance in 2021. The ocean carbon-sink index insurance provides carbon-sink risk protection with 400,000 yuan ($56,425) for 13.3 mu (2.19 acres) of kelp, shellfish and algae, enriching Ping An P&C’s carbon-sink insurance coverage on terrestrial and marine ecosystems, including forests, mangroves and grasslands.17 

Jiang Hua, director of Ping An P&C, says, "We will continue to develop more agricultural insurance products for ecological and environmental protection as well as explore different pathways to achieve low-carbon transformation for insurance services. We will fully support the development of carbon-sink forests and carbon-sink fisheries, providing comprehensive risk protection for carbon-sink resources to help China achieve its ‘dual carbon’ goals."18

Late last year, Ping An established China’s first charitable trust for mangrove ecosystem conservation in Shenzhen to promote sustainable development. The Ping An Biodiversity and Environmental Conservation Charitable Trust aims to protect biodiversity and promote ecological conservation and sustainable development. The establishment of the Trust follows Ping An’s launch of mangrove carbon-sink insurance.19 

As Sheng sums up, all of this sustainable development activity comes under one of Ping An’s development strategies and is the basis for maximizing long-term value. In pursuit of long-term, balanced and high-quality sustainable development, Ping An focuses on improving its practice in ESG-related areas, sets five-year goals for core sustainability-related issues and effectively enhances sustainability-related actions and management.20 

1Wall Street’s ESG Craze Is Fading, Investors pulled more than $14 billion from sustainable funds this year’, Shane Shifflett, WSJ, Nov. 19, 2023 5:30 am ET, loaded, 2023 11 29

2‘ESG’s . . . OK’, FT Alphaville, Fund management, Louis Ashworth, October 11, 2023, loaded, 2023 11 29

3‘Scientific Consensus: Earth's Climate Is Warming’, This website is produced by the Earth Science Communications Team at NASA's Jet Propulsion Laboratory | California Institute of Technology, Site last updated: November 28, 2023, loaded 2023 11 29

4NASA Chart, data of ice core samples going back 800,000 years shows CO2 levels averages around 220 CO2 parts per million, recent data shows it is now up to 440 CO2 parts per million, ‘EVIDENCE How Do We Know Climate Change Is Real? There is unequivocal evidence that Earth is warming at an unprecedented rate. Human activity is the principal cause’, Global Climate Change, Vital Signs of the Planet, NASA's Jet Propulsion Laboratory | California Institute of Technology, last updated November 30, 2023, loaded 2023 12 02

5‘Accounting for Climate: The Next Frontier in ESG’, Richard Mattison — CEO of Trucost, part of S&P Global Market Intelligence Published: October 1, 2019, Loaded 2023 12 02

6‘2023 ESG Top-Rated Companies, Sustainalytics' list of companies that received top ESG Risk Rating scores’, Morningstar Sustainalytics, loaded, 2023 12 02

7‘GHG emissions of all world countries 2023 report’, EDGAR - Emissions Database for Global Atmospheric Research, Energy, Climate change, Environment, European Commission, Loaded, 2023 12, 02

List of countries by carbon dioxide emissions, The data extracted from EDGAR - Emissions Database for Global Atmospheric Research, Loaded, 2023 12 02

8‘China's installed non-fossil fuel electricity capacity exceeds 50% of total’, Reuters, June 12, 2023, Loaded, 2023 12 02

9‘China on course to hit wind and solar power target five years ahead of time. This article is more than 5 months old, Beijing bolstering position as global renewables leader with solar capacity more than rest of world combined,’ Amy Hawkins and Rachel Cheung, The Guardian, Thu 29 Jun 2023, loaded, 2023 12 02

10‘Is China really leading the clean energy revolution? Not exactly,’ Li Shuo, The Guardian Opinion, Thu 6 Jul 2023,  Loaded 2023, 12, 02

11Internal documents reference, under CBRIC "Corporate Governance Standards for Banking and Insurance Institutions" in 2021.

12‘Richard Sheng, Ping An Secretary of the Board of Directors: The "Global Perspectives, Chinese Approach" to ESG Part 1, Peking University - PKU Financial Review, 10 Jul 2023, Peking University HSBC Business School, loaded 2023, 12, 02

13‘Major ESG Risk Categories’, Make a Beautiful Life Together, Ping An Sustainability Report 2022, p19, loaded 2023 12 02

14Ping An Insurance (Group) Company of China, Ltd., Announcement Of Unaudited Results For The Nine Months Ended September 30, 2023, p7, par 2, Loaded, 2023 12 02

15‘Executive Statement,’ Make a Beautiful Life Together, Ping An Sustainability Report 2022, p6, par 3,  loaded 2023 12 02

16‘Ping An Bank Grants First Loan to Pioneering CCUS Project amounted RMB 180 million in China’s Steel Industry Supporting Technological Transformation for Carbon Neutrality,’ Press Release, loaded 2023 12 02

17‘Ping An launches first ocean carbon sink index insurance policy for marine ecosystem protection,’ Press Release, loaded 2023 12 02

18‘Ping An launches first ocean carbon sink index insurance policy for marine ecosystem protection,’ Press Release, loaded 2023 12 02

19‘Ping An establishes China’s first charitable trust for mangrove ecosystem conservation to promote sustainable development,’ Press Release, loaded 2023 12 02

20‘Strategic Planning,’ Make a Beautiful Life Together, Ping An Sustainability Report 2022, p11. Intro, loaded 2023 12 02

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