It’s another year to test the ESG work results of securities firms.
along withmsciDisclose successivelysecurities companyThe 2022 ESG rating results, the overall ESG performance of domestic securities companies surfaced.
Compared with the previous year, the ESG practices of many securities firms have further gained international recognition.According to the statistics of Chinese reporters from securities companies, the A-level lineup has been expanded, and a total of 4 domestic securities companies have been rated as A-level. This rating is currently the highest rating obtained by Chinese securities companies.Haitong SecuritiesandCICCUpgraded to A for the first time.
Otherwise includedCITIC Securities、first venture5 domestic brokerages includingMSCI ESG ratings have improved.
However, the domestic securities industry lags behind in terms of ESG issues, such as “privacy andData Security“As many as 11 securities companies have not been recognized by MSCI ratings, and only one has a score higher than the industry average.
Some people in the industry pointed out that the information disclosure of domestic securities companies on ESG needs to be optimized. For example, the current emphasis on carbon emissions and climate issues is still lower than that of overseas companies, lack of disclosure of negative events, and poor forward-looking.
7 ESG ratings were upgraded
According to MSCI’s official website, as of now, a total of 53 investment banking and brokerage companies around the world have received MSCI ESG public ratings. The ESG rating results are divided into AAA and AA for “leading level”, A, BBB and BB for “average level”, and B and CCC for “laggard level”.
MSCI mainly evaluates the performance of six substantive issues including corporate governance, corporate behavior, responsible investment, privacy and data security, human capital development, and the impact of financial activities on the environment.
Among them, “corporate behavior” evaluates the supervision and management of business ethics issues by enterprises; “responsible investment” evaluates the integration of environmental, social and governance considerations when companies manage their own assets or manage assets on behalf of others; “financial activities have environmental impact” Assess the company’s ability to undertake environmental risks and capitalize on green finance opportunities when undertaking underwriting activities.
According to the statistics of Chinese reporters from securities companies, the annual ESG ratings of 28 Chinese securities companies will be updated in 2022, and 21 of them will be updated in the fourth quarter. Specifically, the A-level brokerage team has been expanded, and a total of 4 securities firms have been rated A-level for ESG ratings, and Haitong Securities and CICC have been awarded A for the first time;Huatai SecuritiesandOrient SecuritiesAll maintain A grade.
MSCI ESG rating results show that Haitong Securities has reached the industry-leading level in the issues of “human capital development” and “corporate governance”, reflecting the company’s comprehensive talent management system and scientific and effective supervision and management system. CICC scored higher than the average score of its peers in the issues of “corporate behavior” and “human capital development”.
In addition to Haitong Securities and CICC, the MSCI ESG ratings of five other domestic securities companies were upgraded. Among them, CITIC Securities and First Capital have both been raised from the BB level in 2021 to the BBB level.
According to MSCI’s rating results, CITIC Securities is ahead of its peers in the issue of “human capital development”. CITIC Securities stated that the company continues to strengthen the talent training system, optimize the quality structure of personnel, and create an open development platform for employees. First Venture is higher than the average level of its peers in terms of “responsible investment”, “privacy and data security”, and “impact of financial activities on the environment”.
also,Guoyuan SecuritiesUpgraded two levels to BB level.Soochow SecuritiesandShenwan HongyuanBoth have been upgraded to B-level from the CCC of the previous year.
The MSCI ESG ratings of some brokerages have declined. According to statistics from brokerage Chinese reporters, a total of 8 domestic brokerages have had their MSCI ESG ratings downgraded.inZheshang SecuritiesIt has been downgraded two grades in a row, downgraded from the BB grade of the previous year to the CCC grade.Guosen SecuritiesIt also fell from grade B to grade CCC. Galaxy Securities was downgraded from BBB to BB.Changjiang Securities、Western Securities、Huaxi Securities、Guolian Securities、Everbright Securities(rights protection)Both were downgraded from BB to B.
The performance of the three major issues of many securities companies lags behind the level of the industry
The above ratings reflect the overall low level of MSCI ESG ratings of domestic securities firms.
In terms of commonality, according to the statistics of Chinese journalists from brokerage firms, most brokerage firms lag behind their peers in terms of “responsible investment”, “privacy and data security”, and “impact of financial activities on the environment”. Large brokerage.
In terms of “privacy and data security”, there is only one domestic brokerage that scores ahead of the industry level, namely the first venture. Taking “responsible investment” as an example, there are only three domestic securities companies with scores higher than the industry average, namely Huatai Securities, First Capital, and Guoyuan Securities.
Previously, industry insiders said in an interview with brokerage Chinese reporters that there are many reasons for the low MSCI ESG ratings of domestic brokerages, such as the company’s lack of emphasis on ESG ratings; ESG information disclosure is insufficient, especially for issues such as responsible investment and financial impact on the environment , only a few peers have fully disclosed relevant practices. Therefore, the rating score may be lower than the actual management level of the enterprise.
After referring to international disclosure cases and domestic disclosure standards, CITIC Securities Research Institute compared and analyzed the ESG corporate information disclosure of three leading domestic securities firms, and believed that the ESG information disclosure of the domestic securities industry mainly reflects five characteristics:
1. The information disclosure of leading domestic securities companies is generally highly regulated and can basically meet the general disclosure requirements, but there is generally a lack of third-party audit or appraisal.
2. The domestic securities industry still pays less attention to carbon emissions and climate issues than overseas.
3. With regard to the social responsibility of the securities industry, domestic enterprises combine it more with the national development strategy, serve the real economy, and reflect it in actual business.
4. The forward-looking nature of domestic disclosure is relatively poor, and the focus of disclosure is more on the description of history and current situation, and there is a lack of discussion on ESG management objectives. For example, UBS proposes clear medium-term target values for multiple ESG indicators.
5. Lack of disclosure of key negative events.
Explore the establishment of an ESG evaluation system for the local securities industry
Some people in the industry pointed out that on the one hand, the domestic securities industry should actively integrate into the international ESG rating system, and on the other hand, it should integrate resources and work together to explore the application of the domestic ESG rating system.
Recently, by grasping China’s national conditions and referring to international standards, the CITIC Securities Research Institute has sorted out the specific ESG substantive issues and indicators specific to the financial industry. It believes that three major concepts should be followed. One is the local concept. The ESG evaluation system should conform to China’s modern ESG Demand, learning advanced international experience while not copying Western standards; second, the overall concept, grasping ESG performance as a whole, not sticking to the performance of a single project, and not advocating companies to list positive causes in the ESG report; third, industry philosophy, focusing on the industry Distinctive ESG issues, and various indicators are deeply embedded with the business to enhance the materiality.
In the opinion of the analyst team, regardless of the stereotyped division of “ESG”, the substantive issues of ESG in the financial industry should highlight two characteristics. First, respond to national strategic needs. The ESG evaluation system of the financial industry pays close attention to key issues such as green, inclusive, financial technology, and financial risks, highlights the guiding significance of national strategies, and builds a localized policy-oriented ESG practice guide. Second, deeply integrate its own business. The ESG evaluation system of the financial industry must go deep into the business essence of financial companies and promote financial companies to implement ESG concepts in their business.
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