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China’s CIC leads progress in latest global GSR ranking

The Chinese sovereign wealth fund is among the top improvers in an annual scoreboard that rates global state funds’ practices in governance, sustainability, and resilience (GSR) over the past year.
China’s CIC leads progress in latest global GSR ranking

The China Investment Corporation (CIC)’s substantial progress in sustainability and governance efforts placed it among the top improvers in the latest ranking of global state-owned investors' best practices.

According to the Global SWF’s annual GSR (governance, sustainability, and resilience) report released on July 1, CIC’s score rose by 16% to 80% in 2024 from a year earlier, making it the third-highest improver in the assessment.

Source: Global SWF 2024 GSR report 

“China’s CIC is a great example of a well-established fund that has identified areas to be improved, and is acting on them,” the report stated.

Global SWF is a research institute studying state-owned funds worldwide.

Its managing director Diego López told AsianInvestor that CIC’s higher score in 2024 comes from enhanced ESG reporting and disclosure in its latest annual report, released in December 2023. The report includes a substantial section on ESG efforts and impact investing examples.

“The fund has been working on mechanism construction, institutional capacity building, and information disclosure optimisation, and the new score reflects these efforts,” the report highlighted.

 

CIC ranked 16th among fellow sovereign wealth funds, and was the 55th among all 200 funds rated in the latest scoreboard.

The state fund managed $1.24 trillion in assets as of the end of 2022. It stands as the second-largest sovereign wealth fund in the world.

Aligned with China’s 2060 carbon-neutrality target, CIC developed sustainable investing guidelines in May 2022 and an operational decarbonisation plan in April 2023.

According to its annual report, the sovereign investor has an energy transition portfolio allocated to natural gas and liquefied natural gas (LNG) infrastructure, fossil fuel transition, renewables, and transportation electrification.

CIC also launched a dedicated energy transition sub-strategy in 2022 and has since developed new partnerships with top-tier managers to invest in emerging technologies and innovative business models.

CIC did not respond to an inquiry for comments.

ALSO READ: Top 10 SWF executives: Noorsurainah Tengah, Peng Chun

Source: Global SWF 2024 GSR report
(SWF in blue, PPF in pink)

Global SWF's annual GSR report, launched in 2020, independently assesses the governance, sustainability and resilience of 200 state funds across 25 scoring categories, based on public data.

This covers the top 100 sovereign wealth funds and public pension funds from 80 countries, representing $36 trillion in assets.

 

Indonesia’s social security fund BPJS, or Employment Social Security System (ESSS), made the most progress among all 200 funds over the past year, boosting its score from 28% to 56% this year.

“In the past year, the fund has made giant strides in terms of sustainability, with an annual report that provides specific metrics and progress, details on impact investing and reference to SDGs (sustainable development goals),” the report wrote.

ASIA EFFORTS

In the 2024 report, three new sustainability elements were introduced and applied retroactively: exclusion and engagement policies, adherence to frameworks like TCFD, and net-zero commitments.

With these additions, Singapore’s Temasek, Canada’s CDPQ, and the New Zealand Superannuation (NZ Super) continued to top the league this year, retaining their perfect 100% scores as in 2023.

Other scorers joining the ranks of the elite club were Canada’s British Columbia Investment Management Corporation (BCI) and the Ireland Strategic Investment Fund (ISIF).

ALSO READ: Temasek, CDPQ, NZ Super and NSIA top latest GSR scoreboard

Thailand’s Government Pension Fund (GPF), the only developing Asian fund that made the top 5 in 2023, lost its position in the league table this year for its lack of commitment to a net-zero target under the new sustainability elements.

It scored 92% in 2024, remaining competitive among its global peers.

While Temasek and NZ Super continued to lead the pack of Asia-Pacific institutions, no developing Asian fund featured in the global top ranks this year.

Diego López, Global SWF

However, across all regions assessed, Asia led among developing regions with an average score of 52%, despite the gap compared to developed regions’ average of over 70%.

“Asia is a very broad and heterogeneous region…there are some countries that score very high, like Thailand, Singapore and South Korea; but others very low, like Brunei, Mongolia or Vietnam - this penalises them when compared to North America, Europe or Oceania, which are usually more homogeneous,” noted López.

“However, we are seeing a lot of effort being done and we expect the Asian funds to score much higher in the near future,” he told AsianInvestor.

¬ Haymarket Media Limited. All rights reserved.
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