Ping An open to foreign partners for China’s net-zero push
Ping An Insurance Group welcomes partnerships from overseas institutional investors seeking local expertise in China’s carbon neutrality opportunities, said its investment chief.
Under the central government’s policy support and incentives, Deng noted that sustainable investment opportunities are not difficult to navigate for a local expert like Ping An.
“For foreign investors who come to play in this area in China, they can consider working with local experts like us,” said Benjamin Deng, Ping An's chief investment officer
“We absolutely welcome partnerships,” Deng told AsianInvestor.
China has a national agenda to peak its carbon emissions by 2030 and be carbon neutral, or net zero, by 2060. As one of the largest asset owners in China, Ping An is a major investor in green and sustainable projects and companies.
However, some foreign asset owners and managers have told AsianInvestor that they don’t have enough relationships and expertise on the ground to identify sustainable investment opportunities in China — especially those in the private market.
For Ping An, this is not an issue. “We have an easier job of making our investments toward sustainable [initiatives] because the government has been very supportive and provided a favourable policy environment,” Deng said.
As of the end of March, Ping An’s insurance funds investment portfolio managed Rmb4.93 trillion ($630 billion) in assets. By end-2023, responsible investments — investments that benefit economic development, social progress, and environmental improvement — were Rmb725.3 billion, accounting for about 15% of total assets.
Among them, green investments stood at Rmb128.6 billion, according to Ping An’s 2023 sustainability report published in March.
BEYOND EXPECTATIONS
Ping An has a target to increase its sustainable investments by 10% every year. But under strong policy support, the insurer has been exceeding its annual target in the past couple of years, with the amount of investment continuing to grow.
Investments into the electrical vehicle supply chain from upstream to downstream, are an important part of Ping An’s sustainable investments.
“For EVs, private equity is one of the significant investment channels, because you would want to invest early when it is still relatively cheap,” Deng said.
In 2023, in response to national directives on upgrading key traditional industries and strengthening weak links in industrial supply chains, Ping An added Rmb1 billion to the infrastructure debt investment plan for the Ping An – Ningbo Meishan Automobile Parts Project, reaching a total investment of Rmb3 billion.
This additional funding will support the development of Geely Auto's advanced manufacturing systems and production lines.
Typical investments are also made into new energy infrastructure, such as wind and solar farms and hydropower stations.
They included investments in Huaneng Lancang River, Ertan and Longtan Hydropower Stations, Xiangyang Wind Power, and the China Yangtze Power.
In December 2023, Ping An made a strategic investment of Rmb4 billion into Shandong Hi-Speed New Energy, a subsidiary of the Shandong High-Speed Group, dedicated to centralised photovoltaic electricity generation.
The investment was made through the Dual Carbon Foundation of Ping An Trendwin Capital Management, a subsidiary of Ping An Group.
In 2023, the insurer also enhanced its cooperation with the State Power Investment Corporation (SPIC), acquiring a share of SPIC Jiangxi Electric Power for Rmb4.5 billion through the Ping An Renewable Energy Fund, to support its clean energy transition.
A HOLISTIC APPROACH
Ping An integrates ESG factors into the entire investment decision process across all asset classes, and makes responsible and sustainable investments as a complex financial institution across its asset management, banking, and other subsidiaries into bonds, equities, and alternative assets.
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Hence, it doesn’t have a standalone portfolio of sustainable investments.
“It’s basically everywhere in our portfolio,” Deng said.
Ping An is one of the few Chinese asset owners who are signatories to the United Nations’ Principles for Responsible Investment (UNPRI).
It has a designated group ESG office and ESG taskforce to ensure relevant work is executed across different business functions, while the strategy and investment committee is responsible for ESG oversight.