Why does China matter from an ESG perspective
We believe that the time has come where ESG investing in China is increasingly a why not moment. As China is one of the largest carbon emitters globally, it has adopted one of the most ambitious climate change plan. As a result, there is potential for fixed income investors to explore thematic opportunities that can offer attractive yield.
One of the most ambitious climate change targets globally
China is in the midst of a rapid scale up of renewable energy capacity that is unparalleled globally.
Convergence of China's ESG taxonomy with international standards
China's ESG standards are quickly aligning with global norms as evidenced by the recent publication of the EU China Common Ground Taxonomy (CGT).
China will be leading the race for carbon emissions reductions in Asia
The International Energy Agency (IEA) has forecast that China’s annual energy spending will reach US$640 billion by 2030 to meet its peak carbon target.
Source: IEA, September 2021.
China has one of the most ambitious climate change targets globally
China is building renewables at a faster rate than Europe
Internationalisation of Chinese Bonds
EU-China common ground taxonomy is a big move towards international alignment
China green bond issuance is on a rebound
USD green bond universe represents just 15% of China's GDP with a substantial room for growth
China is expected to lead the race for carbon emissions reduction in Asia
Percentage change in Asia Pacific carbon emissions from 2020
Investing in Chinese fixed income
Explore the opportunities to enjoy the China growth story in a sustainable way through investing in China fixed income, which has the potential to provide attractive risk-adjusted returns and diversification benefits.
Comprehensive ESG policy
Comprehensive ESG policy to address key areas of concern for sustainability-focused investors.
In-house ESG research
In-house ESG research ensures independent and active approach to issuer selection.
Active ownership
Active ownership to drive the change towards a sustainable world.
Large and growing universe with attractive yield
China offers attractive yields and trades at a discount to Asian names
China is a yield driver in the investment universe
Source: Aladdin, Invesco, Bloomberg, as of 31 December 2021.
Chinese credits trade at an attractive discount
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China has been a strong advocate to promote sustainable finance and decarbonization efforts. In this first blog we outline the importance of China’s role in sustainable investing. -
Blog 2: China’s taxonomy is aligning with international standards
China’s green taxonomy is quickly aligning with international standards. The second blog in our series compares China's green taxonomy with the European Union's taxonomy for sustainable activities.
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Blog 3: What are the key investment themes?
The third blog in our series delves into the seven key thematic opportunities we believe currently exist in China around sustainable investing in fixed income. -
Blog 4: Focusing on the sustainable bond market
This is the last of a four-part blog series that seeks to demystify China’s sustainable investing landscape for fixed income. In our first blog we outlined the importance of China’s role in sustainable investing. The second article in the series looked at how China’s taxonomy is aligning with international standards. We articulated the thematic investment opportunities that may exist in China from a fixed Income perspective in the third blog. This fourth piece seeks to familiarize investors with China’s sustainable bond market.
Platform
- $24bn AUM in ESG strategies1
- Independent and proprietary ESG research since 2018
- Specialist asset class teams
- Scalable platform for clients solutions
Solutions
- Responsible and sustainable strategies
- Carbon optimization
- Net zero aligned portfolios
- Multi-sector
Clients
- ESG aware mandates since 1989
- Insurance
- Pension funds
- Foundations
- Private investors
Source: Invesco. 1 as of 31 December 2021.
Meet our team
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Norbert Ling
Head of Fixed Income Portfolio Management, APAC
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Chris Lau
Senior Portfolio Manager, Invesco Fixed Income
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Haidan Zhong
Head of Client Portfolio Management, Invesco Fixed Income APAC
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