China's green fund to make ‘sizeable’ hires for new investment unit
China’s first dedicated green investment fund is setting up a new investment management unit with a “sizeable” number of hires as it prepares to take off later this year, a source close to the matter told AsianInvestor.
The National Green Development Fund, which manages Rmb88.5 billion ($13.8 billion), posted several Shanghai-based job postings on its website on Tuesday (May 18) for strategic and planning managers, research analysts, portfolio managers, risk control managers and financial managers.
The source, who declined to be named, confirmed that the fund is hiring for these positions and that there are plans to set up an investment management unit later this year to support investment projects.
The source declined to provide the specific number of positions open, only stating that the number of hires will be “sizeable”.
“We are still under preparation and have not started any investments yet,” said the source.
Established in June last year, the National Green Development Fund is the first national-level green-focused investment fund backed by the Ministry of Finance, the Ministry of Ecology and Environment, Shanghai municipality, and corporations backed by state-owned enterprises (SOEs).
Earlier this month, the Shanghai-based fund had a meeting in Beijing, gathering industry experts to draft a “Strategic Plan” for operations.
In July last year, Chen Yin, head of the fund's preparatory group, said the group “had prepared around 80 projects of various types related to green development”.
The fund is set to invest mainly in areas such as environmental protection and pollution prevention, ecological restoration and land and space greening, energy resource conservation and utilisation, green transportation, and clean energy.
Initially, it will focus on 11 provinces and cities along the Yangtze River Economic Belt and will expand to other regions later. National banks and corporations including Shanghai Electric and Longyuan Construction are among shareholders.
NATIONAL PUSH
Supported by the government, companies in China have improved environmental, social and governance (ESG) disclosures, and institutional investors have increasingly integrated goals into their investment practices.
However, issues such as regulatory risk, governance and human rights issues have been stumbling blocks for investors in the country.
The foundation for sustainable investments in China can be traced back to 2016, when several government bodies issued the "Guidelines on Establishing the Green Financial System", which promoted investments in a wide range of eco-friendly assets.
In March, the People’s Bank of China (PBoC) announced that China is working with the European Union to adopt a common green taxonomy across the two markets later this year.
Green bonds have been given a notable push. Most recently in April, the PBoC released a revision of its 2015 rules on green bond issuances, and China made plans to launch a Bond Connect Scheme that would give mainland investors access to Hong Kong’s HK$66 billion ($8.5 billion) worth of green bonds planned for the next five years.
Bram Bos, lead portfolio manager of green bonds from NN Investment Partners, told AsianInvestor that green bonds are clearly the most popular sustainable fixed income instruments because they are the most mature and liquid market. He believes green bonds are probably the most effective way for fixed income investors to enhance the impact they make without sacrificing returns.