Core Viewpoint - 华夏基金 integrates ESG factors throughout the entire lifecycle of REITs to enhance asset quality and operational efficiency, aiming for long-term stable returns and value creation for investors [2][12]. Group 1: ESG Integration in Investment Process - 华夏基金 has embedded ESG principles into its corporate DNA since becoming the first public institution in China to sign the PRI in 2017 [3]. - The company established an ESG Business Committee in 2020, marking a new phase in ESG governance [3]. - ESG research teams are integrated into investment departments, applying ESG factors across six key investment process stages: strategy formulation, fundamental analysis, portfolio management, risk control, communication with listed companies, and regular tracking [3][4]. Group 2: Post-Investment Management - A dynamic management system is in place for post-investment management, with quarterly monitoring of ESG risk exposure and rating changes [4]. - The company engages with listed companies regarding their ESG risks and opportunities, providing suggestions and tracking performance [4][5]. - The company has initiated a due diligence management exploration since 2018, focusing on companies with low ESG ratings but high sustainable development potential [5]. Group 3: ESG Investment 2.0 Era - The ESG investment 2.0 era emphasizes objective analysis of ESG factors' impact on business operations and financial metrics, adhering to fiduciary responsibilities to clients [7]. - The quality of ESG information disclosure in China is improving, which is expected to enhance the value of ESG data in investment decisions [8]. - The company aims to link ESG analysis with industry allocation and fundamental analysis to improve investment performance [8]. Group 4: Evolution of ESG Products - 华夏基金 began its ESG product design efforts in 2017, launching funds focused on clean energy and energy efficiency [9]. - By the end of Q3 2024, the company managed 15 ESG public funds with a total scale of 23.266 billion yuan, including both active and passive funds [9]. - ESG-themed funds have generally outperformed major broad-based indices in recent years [10]. Group 5: ESG as a Value Attribute in Public REITs - ESG is becoming a crucial value attribute for public REITs as the pilot programs deepen [11][12]. - Infrastructure REITs are closely related to ESG concerns, focusing on long-term value and stakeholder communication [12]. - The company prioritizes ESG factors in asset selection, ensuring projects have strong environmental and social performance [13]. Group 6: Balancing Short-term Returns and Long-term Value - The company employs multi-dimensional strategies to balance short-term returns with long-term value in REITs [14]. - High ESG-rated REITs tend to have better occupancy rates and rental levels due to their focus on sustainability and tenant services [14][15]. - Financial institutions are increasingly favoring high ESG-rated projects, leading to lower financing costs and higher market valuations [15]. Group 7: Challenges in ESG Investment - The ESG investment landscape in China is still in its early stages, facing challenges such as a lack of reliable evaluation systems and standards [16].