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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
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
Futian Mangrove Nature Reserve, Shenzhen, China
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
Lushun Port, Dalian, China.
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
11Internal documents reference, under CBRIC "Corporate Governance Standards for Banking and Insurance Institutions" in 2021.