by Martina Fuchs
GENEVA, Oct. 9 (Xinhua) -- There is a growing appetite for investments focused on environmental, social and governance metrics (ESG) in China, the Chairman of Moody's said, adding that the rating agency is increasingly watching the country's fintech and start-up space.
"There has been a significant change in thinking around the subject of sustainability," Henry McKinnell, the Chairman of Moody's, told Xinhua in a recent interview.
"The government is publishing new guidelines and measures through the People's Bank of China, along with other ministries and regulators, as investors are looking for information to help them manage the risks."
ESG investing, or strategies that take a company's environmental, social and governance factors into consideration, grew to more than 30 trillion U.S. dollars in 2018, and could reach 50 trillion U.S. dollars over the next two decades, according to some forecasts.
"Investors are increasingly concerned about sustainability," he said. "We recently invested in a company, SynTao Green Finance, which provides data, data analytics and insights for investors to make informed decisions to ensure the sustainability of their investments," McKinnell said.
SynTao Green Finance, a leading provider of ESG data and analytics based in Beijing, provides ESG data and ratings, green bond verification, and green finance solutions to financial institutions and corporates in China.
ESG investments are slowly gathering pace in China as the country is pushing to open up its capital markets and aims to attract more ESG-conscious domestic and foreign investors.
In August, MSCI, a global provider of market and investment tools and services, published two climate change indexes that allow investors in Chinese stocks to lean toward companies with lower carbon emissions.
In China, Moody's is represented by a joint venture, China Chengxin International Credit Rating Co. (CCXI), which was incorporated in 1999 and is the leading domestic credit rating agency.
"In China, there is a very high demand for these (ESG) services through our joint venture with CCXI, which provides credit analyses on 1,800 or more local companies as well as through Moody's itself, which offers integrated risk assessment services to market participants in China and throughout the world so they can make better decisions," McKinnell said.
"There is just an explosion of innovation and new technologies from individuals and small companies within China. This is something that Moody's in China with our 100-year history as a firm and our 30-year history in China, and very deep roots in China, are reaching out to. Increasingly, we are also looking to fintech startups in China as a source of innovation."
In September, the agency maintained a "stable" outlook on China's rating, saying the risks to the sovereign's economic outlook and public sector's balance sheet appear broadly balanced over the next 12-18 months.
Moody's expects China's economy to grow by 1.9 percent this year, before a 7-percent growth in 2021. Enditem
