Cutting through the noise to seek out opportunities in China (part 2)
We share our China equity investing insights on the 3 sectors to focus on in the near term.
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Key takeaways:
Climate change can present important risks1 and opportunities. We disclose how we consider climate-related risk and opportunities in the assets we manage on behalf of our clients in our inaugural Task Force on Climate-related Financial Disclosures (TCFD) report.
Investors need clear, comprehensive, high-quality information on the impact of climate change, and this includes the risks2 and opportunities presented by rising temperatures, climate-linked policies and related technologies.
The scale and complex nature of climate change can challenge investors’ assessment of risk2. The current financial valuations may not adequately factor in climate-related risks because of insufficient information.
Do you know how the TCFD framework works?
The TCFD provides recommendations on the types of information companies should disclose to support investors, lenders, and insurance underwriters in appropriately assessing and pricing risks2 related to climate change.
Our inaugural TCFD report reflects our efforts and business practices on our journey to providing disclosures in line with the TCFD framework.
Do you know how we factor the impact of climate change?
We have systematically assessed and integrated financially material environmental, social and governance (ESG) factors, including climate-related risks and opportunities, into our investment process for certain actively managed strategies.
In addition to this, we believe we have an important role to play as investors navigating the transition to a low carbon economy.
In our view, meaningful greenhouse gas (GHG) emissions reductions in our investments are possible through:
- Active engagement with our investee companies on their transition to net-zero. As a signatory of the Net Zero Asset Managers Initiative (NZAMI), we partner with our clients to set targets to manage a proportion of their assets to achieve net-zero GHG emissions by 2050 or sooner.
- Investing in companies that are, in our investment teams’ view, well-positioned to benefit from the transition to a low-carbon economy and reducing exposure to the largest carbon-emitting companies or sectors.
- Have a clear vision to continue expanding our sustainable investing capabilities.
Do you want to know more about our climate data & analytics?
We are working towards integrating climate-related data and metrics into a centralised platform alongside other material information used for portfolio management and research. The approach seeks to include what we have identified to be the relevant available data, scenarios and analytical tools, combined with the expertise of our dedicated climate researchers and our fundamental researchers.
Conclusion
We will continue to evolve and advance our reporting in line with industry developments and regulatory requirements. We seek to constantly improve our capabilities to promote sustainable business practices.
Provided for information only based on market conditions as of date of publication, not to be construed as investment recommendation or advice. Forecasts, projections and other forward looking statements are based upon current beliefs and expectations, may or may not come to pass. They are for illustrative purposes only and serve as an indication of what may occur. Given the inherent uncertainties and risks associated with forecast, projections or other forward statements, actual events, results or performance may differ materially from those reflected or contemplated.
Investments involve risks. This includes illustrations of macro trends which may or may not come to pass. Investors should seek professional advice before investing. The manager seeks to integrate environmental, social and governance (“ESG”) factors in the investment process. ESG integration is the systematic integration of material ESG factors in company/issuer selection through research and risk management. It involves proprietary research on financial materiality of the ESG factors in relation to the relevant company/issuer and discretion to invest regardless of whether the company/issuer may be positively or negatively impacted by the ESG factors. Integration of ESG factors in does not imply ESG factors as the sole investment focus. Please refer to the offering documents for more details on the ESG approach.
1. For illustrative purposes only based on current market conditions, subject to change from time to time. Not all investments are suitable for all investors. Exact allocation of portfolio depends on each individual’s circumstance and market conditions.
2. The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk.
Investment involves risk. Not all investments are suitable for all investors. Past performance is not a reliable indicator of current and future results. Please refer to the offering document(s) for details, including the risk factors. Investors should consult professional advice before investing. Investments are not similar to or comparable with fixed deposits. The opinions and views expressed here are as of the date of this publication, which are subject to change and are not to be taken as or construed as investment advice. Estimates, assumptions and projections are provided for information only and may or may not come to pass. This document has not been reviewed by the SFC. Issued by JPMorgan Funds (Asia) Limited.
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For more information, please call or email us. You can also contact your J.P. Morgan representative.