We don’t pick side, We pick ESG

(Picture: unsplash.com)

In the last weekend of October (30-31 Oct), Catherine Chen, founder of AvantFaire was invited to the 2020 annual conference held by CSEIF (China Social Enterprise and Impact Investing Forum). Catherine was also one of the guest speakers in the China Practice Roadshow themed “Build Back Better”.

Last week, Catherine was invited by the organizer of the BENCHMARK Fund of the Year Awards as one of the judges in its Gatekeeper’s Forum to select the winners for year 2020.

Within just two weeks, Catherine was exposed to the innovative business models used by some outstanding Chinese social enterprises to tackle social problems, while also being invited to review the integration of ESG into investment process by top fund manager in Asia.

Catherine would like to share her insights from these two events.

Start Local, Go Global

Design thinking is one of the areas that Catherine has been studying in since her MBA program in Rotman School of Management, University of Toronto. She has been keeping an eye on the global trend ever since.

During the CIIN road show, she was surprised to see that the business innovation of some local start-ups have been agile, which allowed the global market embraced their products and services right away.

For example, First Respond, a B corp founded in 2012, developed an emergency first-aid platform. They exported the product abroad to support the Tokyo Marathon, an international marathon that is considered as one of the safest marathon events in the world. The smart helmet wore by the staff could make sure injured athletes could be taken care of within 30 seconds with the connection to a highly informative and intelligent command system.

Clear Intentionality, Detailed Measurement

Rockefeller Foundation has described intentionality and measurement as two key elements to define impact investment. As an impact investor, we also value the theory of change by evaluating how much positive influences a project could bring to the society, hence to judge the investment return of the project.

During the CIIN annual conference, Catherine was delighted to see some SMEs and start-ups have kept data evaluation and reporting in mind. For example Melephant, an eco-printing solution provider was much aware of climate risk measurement.

Transparency, Reporting, & Disclosure

While judging for the BENCHMARK Fund of the Year Awards, Catherine highly appreciated the level of transparency, reporting and disclosure achieved by those fund management companies in APAC ex-China.

ESG standard and integration have gradually becoming an industrial consensus. Global fund management companies are keen to join local groups and regional initiatives to expand their influences and align with local policies and regulationary expectations at the same time.

Process Oriented, Risk Resilience

The long-term climate risk resilience of the funds have been improved, said Catherine after looking into details of those funds and finish judging. She believes that the fund performance and risk management capability are driven by a process oriented investment logic. One could be highly confident about the product only when he/she relies on a well designed, rationalised investment process. By focusing on process, it is more likely to get products that are in line with sustainable investing, and to achieve and ideal level of risk adjusted return.

It has been a fruitful two weeks for the impact investing market, as well as for Catherine herself. It’s encouraging to see so many parties working towards a common goal from various dimensions, and from both China and overseas. It’s our common goal to embed ESG into investment process, due diligence, execution, and reporting.

AvantFaire has always regarded ourselves as a bridge between Asia and western markets. We see SDG 17- Partnership as our responsibility as we strive to strengthen global knowledge sharing and enhance cross-border partnerships for sustainable development. Catherine has her firm believe in ESG, and has been worked closely with both global and local institutions to push impact investing to a broader audience.

Again, don’t forget to Follow us on LikedIn, and share your thoughts with us.