THIS MATERIAL IS A MARKETING COMMUNICATION.
ESG Monthly (June 2022)
This month’s highlights:
EU approves the inclusion of nuclear and gas in the EU Taxonomy; Supreme Court of USA limits federal power to cut carbon emissions; HKEX launches International Carbon Market Council; Mirae Asset insights on physical climate change.
Commentary on ESG news and developments:
Globally…
- In the European Union (EU), the European Parliament approved nuclear and gas to be classified as sustainable investments under the EU Taxonomy amid controversial views within the EU (Reuters, July 2022).
- In the EU, the European Council set a binding target of 40% renewable energy in the energy mix (up from the previous target of 32%) and a 9% reduction in energy consumption compared to 2020, for the European Union’s “Fit for 55” initiative to cut greenhouse gas (GHG) emissions by 55% by 2030 compared to 1990 levels (ESG Today, July 2022).
- In the United Kingdom (UK), the Financial Conduct Authority (FCA) published for the first time its climate-related financial disclosures in alignment with the Task Force for Climate-related Financial Disclosures (TCFD), covering both regulatory and corporate activities (Financial Conduct Authority, July 2022).
- In the UK, the government launched a task force to support the integration of social factors into the ESG investing practices of its pension schemes (UK Govt, July 2022).
- In the United States (US),the Supreme Court restricted the Environmental Protection Agency’s (EPA) authority to mandate carbon emissions reductions creating uncertainty around the Securities and Exchange Commission’s (SEC) climate disclosure proposals (Reuters, July 2022).
- In Switzerland, the Swiss Federal Council launched voluntary climate disclosure standards called ”Swiss climate scores” for financial institutions of the country (ESG Today, July 2022).
In Asian Pacific markets…
- In Thailand, the Securities and Exchange Commission of Thailand (SEC) and UNDP Thailand jointly launched the Thailand Sustainable Development Goals (SDG) Investor Map, identifying 15 investment opportunities in 8 SDG-related sectors (SDG Investor Map Thailand, July 2022).
- In Japan, the Financial Services Agency (FSA) released the world’s first (voluntary) Code of Conduct for ESG data providers, a move that is expected to increase scrutiny of the quality of ESG evaluation and data provision services across the market (Responsible Investor, July 2022).
- In Hong Kong, the Hong Kong Exchanges (HKEX) announced the launch of the Hong Kong International Carbon Market Council to explore carbon opportunities by developing a Hong Kong-based international carbon market with best-in-class market infrastructure, products and services (HKEX, July 2022).
- In Malaysia, the Khazanah Nasional Berhad $30bn sovereign wealth fund ruled out divesting from the country’s fossil fuel companies, putting questions over their commitment to achieving net zero emissions across its portfolio by 2050 (Financial Times, June 2022).
ESG Insights from Mirae Asset:
Investment Risks and Opportunities of Physical Climate Change
- Asia will likely be one of the regions most vulnerable to climate change, with droughts expected to increase between 5-20% by 21001, larger exposure to energy insecurity and heightened risks of malnutrition, vector and water-borne diseases.
- Physical climate change may cause lower economic productivity and thus lower investment returns. However, on the flip side, it may also give rise to investment opportunities if companies can benefit by incorporating climate adaptation initiatives in their business operations.
- At Mirae Asset, climate considerations are integral to the fundamental research undertaken by our investment analysts to review their sectors’ and each company’s exposure and resilience to physical climate change.
- We leverage physical climate change insights to inform our investment decisions and engagement efforts.
Source: Mirae Asset Global Investments, June 2022
1. Eastspring Investments, April 2021
Chart of the Month: Ramp up of Global Clean Energy Spending
Source: IEA, June 2022
Disclaimer & Information for Investors
No distribution, solicitation or advice: This document is provided for information and illustrative purposes and is intended for your use only. It is not a solicitation, offer or recommendation to buy or sell any security or other financial instrument. The information contained in this document has been provided as a general market commentary only and does not constitute any form of regulated financial advice, legal, tax or other regulated service.
The views and information discussed or referred in this document are as of the date of publication. Certain of the statements contained in this document are statements of future expectations and other forward-looking statements. Views, opinions and estimates may change without notice and are based on a number of assumptions which may or may not eventuate or prove to be accurate. Actual results, performance or events may differ materially from those in such statements. In addition, the opinions expressed may differ from those of other Mirae Asset Global Investments’ investment professionals.
Investment involves risk: Past performance is not indicative of future performance. It cannot be guaranteed that the performance of the Fund will generate a return and there may be circumstances where no return is generated or the amount invested is lost. It may not be suitable for persons unfamiliar with the underlying securities or who are unwilling or unable to bear the risk of loss and ownership of such investment. Before making any investment decision, investors should read the Prospectus for details and the risk factors. Investors should ensure they fully understand the risks associated with the Fund and should also consider their own investment objective and risk tolerance level. Investors are advised to seek independent professional advice before making any investment.
Sources: Information and opinions presented in this document have been obtained or derived from sources which in the opinion of Mirae Asset Global Investments (“MAGI”) are reliable, but we make no representation as to their accuracy or completeness. We accept no liability for a loss arising from the use of this document.
Products, services and information may not be available in your jurisdiction and may be offered by affiliates, subsidiaries and/or distributors of MAGI as stipulated by local laws and regulations. Please consult with your professional adviser for further information on the availability of products and services within your jurisdiction. This document is issued by Mirae Asset Global Investments (HK) Limited and has not been reviewed by the Securities and Futures Commission.
Information for EU investors pursuant to Regulation (EU) 2019/1156: This document is a marketing communication and is intended for Professional Investors only. A Prospectus is available for the Mirae Asset Global Discovery Fund (the “Company”) a société d'investissement à capital variable (SICAV) domiciled in Luxembourg structured as an umbrella with a number of sub-funds. Key Investor Information Documents (“KIIDs”) are available for each share class of each of the sub-funds of the Company.
The Company’s Prospectus and the KIIDs can be obtained from www.am.miraeasset.eu/fund-literature . The Prospectus is available in English, French, German, and Danish, while the KIIDs are available in one of the official languages of each of the EU Member States into which each sub-fund has been notified for marketing under the Directive 2009/65/EC (the “UCITS Directive”). Please refer to the Prospectus and the KIID before making any final investment decisions.
A summary of investor rights is available in English from www.am.miraeasset.eu/investor-rights-summary.
The sub-funds of the Company are currently notified for marketing into a number of EU Member States under the UCITS Directive. FundRock Management Company can terminate such notifications for any share class and/or sub-fund of the Company at any time using the process contained in Article 93a of the UCITS Directive.
Hong Kong: This document is intended for Hong Kong investors. Before making any investment decision to invest in the Fund, Investors should read the Fund’s Prospectus and the information for Hong Kong investors (of applicable) of the Fund for details and the risk factors. The individual and Mirae Asset Global Investments (Hong Kong) Limited may hold the individual securities mentioned. This document is issued by Mirae Asset Global Investments (HK) Limited and has not been reviewed by the Securities and Futures Commission.
Copyright 2023. All rights reserved. No part of this document may be reproduced in any form, or referred to in any other publication, without express written permission of Mirae Asset Global Investments (Hong Kong) Limited.