China Investment Corporation (CIC) has introduced sustainable investment guidelines outlining the roadmap for the US$1.2 trillion sovereign wealth fund to become carbon neutral in its operations and its strategic investment plans by 2027.
The move is in line with the Chinese government’s climate blueprint. Beijing in September 2020 set a target for carbon dioxide emissions to peak by 2030 and to become carbon neutral before 2060.
CIC is also following in the footsteps of global peers which are increasingly focusing on environmental, social and governance factors in their investments.
According to the International Forum of Sovereign Wealth Funds, over 70% of global sovereign wealth funds representing $36 trillion of assets under management incorporated ESG considerations in their investment process in 2021, a sharp increase from just 24% in 2020.
CIC’s Guidelines on Attaining Carbon Peak and Carbon Neutrality Goals and Practicing Sustainable Investing unveiled on May 23 covers various aspects in the context of operations, research, asset allocation, risk management and international cooperation.
Among other things, they stipulate that the CIC needs to include climate change factors into its strategic asset allocation.
The wealth fund is also required to integrate climate change risks into its comprehensive risk management, and focus on research that is conducive to sustainable investment. It will also seek to form green partnerships with global sovereign wealth funds and asset managers.
CIC, which was established in 2007, says it has “consistently positioned itself as a responsible investor that strives to practice green development philosophies and facilitate sustainable development of the world”.
The guidelines are “another testament to CIC’s determination to advance sustainable development and contribute to attaining carbon peak and carbon neutrality goals”, the wealth fund says in a statement.