China's First ESG Fund Evaluation System Released
The report "ESG Funds: International Practices and Chinese System Construction" released China's first ESG fund evaluation system. The report was jointly researched and written by the Green Finance Professional Committee of the China Society of Finance and other organizations, and debuted at the 2021 China International Fair for Trade in Services.
The report calculates the ESG scores of fund products based on the ESG evaluation of public company, and classifies fund products into three types: "dark green", "light green" and "other" according to the scores. The results show that in 2020, there are 367 dark green funds (10.68%) and 584 light green funds (17.01%) in China's financial market, and the number of all green funds is 951 (27.69%).
The report statistics show that ESG funds have an advantage in terms of returns compared to general funds. Overall, light green funds rate of return are higher than dark green funds, and both have higher average returns overall than non-green funds. In terms of time horizon, green funds are about 5% higher than non-green funds at 12 months rate of return, 6% higher at two years rate of return, and 7% higher at three years rate of return.
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