Interest in investment funds related to environmental, social and governance (ESG) factors is growing in China amid Beijing’s renewed push to meet its ambitious carbon goals, reports the South China Morning Post. Net inflows into sustainability-themed funds in the mainland grew to $7.6 billion in the third quarter, reversing from a net outflow of $928.9 million in the second quarter, according to the Morningstar’s tally of 127 domestic funds with a strong focus on ESG factors.
“In 2021, investors have shown growing interest in ESG funds, particularly in renewable energy and low carbon products, as the Chinese government continues its efforts to meet commitments to hit peak emissions by 2030 and achieve carbon neutrality by 2060,” Verna Chen, a Shenzhen-based analyst in Morningstar’s manager research team, told the Post.
Some 20 ESG funds were launched in China in the third quarter, out of 34 such funds in Asia ex-Japan. Most of the funds launched on the mainland focused on climate-related themes, in line with the government’s efforts to meet its carbon emissions reduction targets, according to Morningstar. This included the initiation of a national carbon trading market in July, which resulted in strong investor interest in new energy and low carbon products in the mainland, the research firm said.