As an integrated retail financial services provider, Ping An Group delivers insurance, banking, investment and other all-inclusive financial products and services to its clients. In 2021, Ping An invested RMB3.92 trillion of insurance capital. Ping An’s responsible investment principles are built on insurance capital’s focus on long-term return. Instead of chasing short-term profits, Ping An’s business philosophy focuses on long-term sustainable development.
Amid increasingly more stringent regulation and the demand from global investors, ESG is gradually being more widely accepted in China. Yet, due to the discrepancy of standards and difficulties in data collection and reporting, Chinese companies, including insurance companies, are lagging in both breadth and depth in ESG disclosure, leading to a lack of data to evaluate company performance. In addition, ESG ratings for the same company differ significantly due to differences in underlying data source and methodologies. Companies receive mixed signals on their performance and investors do not know how to reconcile diverging ratings on the same company. Also, existing ESG ratings often have significant time lag, adding to the challenge of integration in real-time investment and risk analysis.
Considering the current gap, a collaborative approach from different market participants are necessary to promote ESG development in China. In addition to encouraging regulators to issue mandatory ESG disclosure requirements, companies should also take initiatives to leverage technology-driven solutions to disclose better ESG data. Rating providers need to provide more transparency and expand underlying data source to include more non-disclosure based data. Investors should fully integrate ESG factors with their investment. Eventually, an ecosystem around regulators, investors and corporates will form to drive ESG development. Ping An plays the dual role of a major asset owner and technology solution provider to both improve its own practice and also provide a set of ESG evaluation tools to enable others.
Leveraging its own expertise in finance and technology and best practices in China and aboard, Ping An has built an AI-ESG platform with two core functionalities – ESG management for corporations and ESG investment analysis for investors. On the management side, it offers a set of tools for companies to better manage, report, and improve their ESG performance, leading to higher external ratings. On the investment side, it has developed a proprietary CN-ESG evaluation framework to assess companies’ ESG performance. Under the framework, Ping An has sourced multiple data sources and AI-driven scoring methods to produce ESG scores and factors, which are essential inputs for ESG risk control and investment analysis. In addition, it can support rating agencies, government, industry associations and NGOs in their ESG related needs through data, tools, and consultancy services.
