In recent years, listed companies on the Science and Technology Innovation Board have become the "vanguard" of ESG information disclosure, which highlights the increasing importance that technology companies are paying to the construction of ESG systems.

On March 21, the Shanghai Stock Exchange officially released the Science and Technology Innovation Board ESG (Environmental, Social and Corporate Governance) Index (hereinafter referred to as the "Shanghai Science and Technology Innovation Board ESG Index"), which not only further enriches the Science and Technology Innovation Board Index system, but also promotes Science and Technology Innovation Board listed companies can better implement the concept of sustainable development. In recent years, listed companies on the Science and Technology Innovation Board have become the "vanguard" of ESG information disclosure, which highlights the increasing importance that technology companies are paying to the construction of ESG systems. At the same time, ESG investment has also begun to tilt towards the high-tech industry, with investment in the technology field increasing year by year, and large ESG funds are heavily invested in technology stocks.

Information disclosure is gradually improved

The SSE Science and Technology Innovation Board ESG Index selects the securities of the 50 listed companies with the highest ESG evaluations from the Science and Technology Innovation Board market as index samples, aiming to reflect the overall situation of the securities of listed companies with better ESG performance on the Science and Technology Innovation Board. The sample selection method is both representative and investable, and comprehensively considers market value coverage, investment capacity and ESG evaluation to provide investors with more reference for stock selection and investment.

As a new era investment concept that focuses on corporate environmental, social, and governance performance rather than financial performance, ESG has become a "yardstick" for measuring corporate sustainable development performance. As the "double carbon" goal continues to advance, Chinese listed companies pay more and more attention to ESG information disclosure. Since 2017, Chinese regulatory authorities, exchanges, etc. have successively issued relevant policies to regulate ESG information disclosure of domestic listed companies. ESG performance as an evaluation criterion has attracted the attention of more and more corporate stakeholders, further promoting the expansion of ESG investment. In fact, from the perspective of investors, the higher the ESG performance, the lower the business development risk in the context of energy transformation, and the easier it is to gain favor.

This year's government work report pointed out that we should accelerate the promotion of self-reliance and self-reliance in high-level science and technology. Give full play to the advantages of the new national system and comprehensively enhance independent innovation capabilities. Strengthen the layout of the basic research system, support a number of innovation bases, advantageous teams and key directions in the long term, and enhance original innovation capabilities. The ESG Index of the Shanghai Stock Exchange Science and Technology Innovation Board was released at the time. The industry believes that technology companies are constantly exploring the integration of ESG concepts into investment and financing construction.

The Shanghai Stock Exchange pointed out that the detailed ESG information disclosure of the Science and Technology Innovation Board has gradually increased. From 2020 to 2022, the number of listed companies that the Science and Technology Innovation Board disclosed special ESG reports has increased year by year, to 25, 95 and 140 respectively. The company coverage rate increased from 9% to 27%.

Pay close attention to high technology

For high-tech companies, responsible innovation is an important way to balance business value and social responsibility and practice ESG concepts. In recent years, ESG investment has increasingly tilted towards the theme of high-tech industries.

The Prospective Industry Research Institute pointed out that in the past four years, China's ESG fund investment strategy has clearly tilted towards industry, information technology, materials and other industries, with investment in these fields accounting for 70%-80%, indicating that the market is deeply concerned about high-tech industries. The high-tech industry has great growth potential and investment value, especially the proportion of investment in the industrial sector continues to rise.

The same is true for overseas markets, mainly the ESG investment and transaction ecosystem where asset management companies are the mainstream. CNBC News reported that major asset management companies around the world generally regard large technology companies as high-return targets and are making big bets on technology stocks. In the ESG investment basket of asset management companies, technology assets are increasing day by day.

Bloomberg Industry Research compiled data shows that ESG-themed funds currently hold more technology assets than any other field. The top five positions in Xtrackers MSCI, the largest ESG traded open-end index fund in the United States, are technology stocks, respectively Microsoft, Apple, Nvidia, Amazon and Meta, accounting for nearly 24% of total positions. As of the end of March, Xtrackers MSCI has risen nearly 9% this year. The asset allocation of technology in the largest holding industry exceeds 30%, and the second-largest holding industry accounts for only 13.5%.

Dave Nadiger, chief investment officer of data provider ETF Trends, said that ESG invested heavily in technology stocks because it regarded technology as one of the key means to drive energy transformation.

However, as for the definition and definition of ESG investment, a unified definition has not yet been formed. The definitions of most ESG funds in the market are mainly reflected in asset selection and allocation, such as new energy, environmental protection, low-carbon technologies, etc. This seems to be more like a sector. Industry funds, it is difficult to provide true feedback on corporate ESG performance. Based on this, ESG investment is tilted towards the high-risk and high-return technology industry, and there are bound to be many problems.