The "2020 Winter Davos Sina Financial Breakfast-ESG China practice from an International Perspective", sponsored by Sina Finance, was held in Davos, Switzerland, from 14:30 to 15:45 on January 22nd, Beijing time.
An Dingshan, President of Ericsson Asia Pacific, discusses the importance of ESG data collection and reporting solutions, and analyzes how ESG data is transforming the financial landscape and what far-reaching impacts it will have on the current and future financial sector.
The following is the full text of an Dingshan's speech:
There may be people in the audience who don't know much about Eason Warmai. We are an information company with 15500 employees worldwide. We provide industry insights and analysis for the three major markets: finance, energy and transportation. Ericsson Huamai has 50000 customers worldwide. All customers are looking forward to more transparent and detailed data information in the industry.
From an industry point of view, it is not surprising that our customers need to follow certain rules and frameworks. Their demand is to obtain a fair benchmark and reasonable industry data analysis to assist in making long-term decisions.
From the perspective of financial markets, sustainability is the new standard of borrowing and investment. People's concept is different from before, investment should no longer be considered only by the shareholders of the company, but by all stakeholders. More and more people realize that sustainability affects the value of the economy and financial markets. Ericsson is committed to collecting and analyzing information to guide investors' investment decisions.
Ericsson has been involved in the environmental economy for a long time, and we began to take over the TZ1 registration business from the New Zealand Stock Exchange as early as 2009. Since then, the two assets of water resources and biodiversity have also been added to the environmental and economic registration system. Ericsson Huamai has been named the best registration service provider for the tenth year in a row. We adhere to the concept of sustainable development to operate the company's business and serve our customers.
In the field of environmental economy, we offer a variety of products. This picture records the footprint of our environmental and economic business all over the world. Including covering hundreds of countries registration, auction and other business. With the increasing importance and complexity of ESG factors, our business related to ESG has also grown.
Next, I would like to briefly introduce our business one by one. The first is the world's largest carbon, water and biodiversity asset registration system, with voluntary and required registrations. We have more than 28 standards and projects on this system. The cumulative number of registrations reached 350 million. Our second business is auction. We have established business relations with California in the United States, Quebec in Australia, Nova Scotia and other places, with a total transaction subsidy of US $17 billion in 31 rounds of auctions. The global carbon index makes our new business. The carbon emission index is used to reflect the most flexible "restrictions and trade carbon subsidies" in the carbon credit market. At present, our business covers California and northeastern regions of the United States, Europe, considering the size of the market, we particularly want to include China in the business territory. The last piece of business related to the enterprise ESG sustainable development report database. It is an online one-stop SGD data collection, storage and distribution platform with more than 16 ESG standards and frameworks and more than 6200 ESG metrics support. From the perspective of environmental economy as a whole, we provide customers with one-stop services for data collection, analysis and transmission.
This is a passage from Mark Carney, governor of the Bank of England, and I will not read it here. Risk transfer: financial risks arising from the adjustment to a low-carbon economy. Policy changes, technology and physical risks make costs and opportunities transparent, triggering a round of revaluation of large-scale assets. I would like to talk about the three major risks proposed by Mark Carney, namely, physical risk, liability risk and transformation risk. The main external factors are climate change, resource depletion and environmental degradation. These risks will affect legal institutions, asset portfolios, financial instruments, personal assets and other aspects. It can be seen that the impact on financial markets is very complex, and the data involved is extremely complex.
It is clear that physical risk is the most direct, related to insurance liability and physical assets. The recent forest fire in eastern Australia is a case in point. Liability risk is concerned with the responsibilities that may be assumed in the future. Transformation risk focuses on new technologies and policies that reprice the financial market as a whole. This is different from previous industry transformations. Even a small part of it-climate change-involves a lot of data and requires a high degree of transparency.
Everyone should be very familiar with the general environment now. There are also many aspects of the impact on the company, on the one hand, the company should change its business model, on the other hand, the company should regularly provide more data in the form of a questionnaire. For investors, they require more information and digest a large number of disclosures, documents and forms. The whole industry is faced with a huge data processing problem. This work will become more and more important for companies to properly deal with management risks.
This is the time of opportunity for data collection. Rate customers and distribute information, which is the SDG reporting database that serves customers directly. The specific method is to extract quantitative and qualitative ESG data from the documents uploaded by the ESG report database. Capture data based on the framework and metrics used in each uploaded ESG document / link. The company can review and approve the extracted data and make changes as needed. The structured extracted data is available in the ESG reporting database after approval. All indicators are in line with all kinds of ESG standards.
Companies will have better control over their publicly reported ESG data, compare their ESG data with competitors, simplify the distribution of data to stakeholders, and make reports easier to manage and gain insight into how others use their data.
For asset managers, asset owners, and other ESG data users, the ESG reporting database will provide them with one-stop access to high-quality, company-provided ESG data and documents, the ability to view, compare and analyze structured qualitative and quantitative ESG data across companies, industries and regions, and to leverage existing ESG frameworks and standards.
To sum up, we have heard a lot about the concept of influence investment. There is no doubt that investment decisions will increasingly put environmental sustainability at the heart of considerations. What the company wants is sustainable growth.
The problem of climate change does exist and will exist for a long time. Millennials and future generations will grow into future investors. Such discussions will become more and more intense. As an information provider, our mission is to strive for information transparency in all markets and encourage our customers to seek self-positioning in the future.