Responsible Investment: Understanding and Improving ESG Engagement with Chinese Investee Companies
(2013) In IIIEE Master thesis IMEN56 20131The International Institute for Industrial Environmental Economics
- Abstract
- Responsible investment is a movement to integrate environmental, social and governance (ESG) considerations in institutional investors’ investing activities. Despite the rapid growth of responsible investment in worldwide markets including China, there exists a prominent knowledge gap in how investors or their professional engagement service providers engage with Chinese investee companies to monitor and improve the companies’ ESG risk management and preparedness. In particular, little is known about how Chinese investees perceive ESG engagement. This thesis investigates how ESG engagement with Chinese investees is conducted, taking into account the investees’ perspectives on ESG issues. It has been observed that how engagement activities... (More)
- Responsible investment is a movement to integrate environmental, social and governance (ESG) considerations in institutional investors’ investing activities. Despite the rapid growth of responsible investment in worldwide markets including China, there exists a prominent knowledge gap in how investors or their professional engagement service providers engage with Chinese investee companies to monitor and improve the companies’ ESG risk management and preparedness. In particular, little is known about how Chinese investees perceive ESG engagement. This thesis investigates how ESG engagement with Chinese investees is conducted, taking into account the investees’ perspectives on ESG issues. It has been observed that how engagement activities contribute to the level of collective sense-making of ESG issues shared by engagement practitioners and Chinese investee companies is not as linear as literature has described. Moreover, Chinese investees in general display a relatively low awareness and limited understanding of ESG-related concepts, lack top-management support in addressing ESG matters strategically, are mostly motivated by client demand and regulations to address ESG issues, and are financially backed by the state or wealthy family shareholders. The thesis suggests an alternative model to conceptualise ESG engagement and the generated collective sense-making. The model encompasses engagement practitioners’ underlying approach or aim of engagement, the alignment of engagement activities with the underlying aim, the consideration of the Chinese investees’ characteristics during the engagement process, and lastly Chinese investee companies’ proactiveness towards addressing ESG matters. Specific recommendations to engagement practitioners and other stakeholders to further improve ESG engagement are proposed, which will help increase the chance of successfully motivating Chinese investees to enhance their ESG performance and thus strengthen the overall business case for responsible investment. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/4196260
- author
- Sin, Kei Yau LU
- supervisor
-
- Naoko Tojo LU
- Torbjörn Brorson LU
- organization
- course
- IMEN56 20131
- year
- 2013
- type
- H2 - Master's Degree (Two Years)
- subject
- keywords
- Responsible investment, ESG engagement, investor relations, Chinese investee companies
- publication/series
- IIIEE Master thesis
- report number
- 2013:05
- ISSN
- 1401-9191
- language
- English
- id
- 4196260
- date added to LUP
- 2013-12-17 14:52:17
- date last changed
- 2013-12-17 14:52:17
@misc{4196260,
abstract = {{Responsible investment is a movement to integrate environmental, social and governance (ESG) considerations in institutional investors’ investing activities. Despite the rapid growth of responsible investment in worldwide markets including China, there exists a prominent knowledge gap in how investors or their professional engagement service providers engage with Chinese investee companies to monitor and improve the companies’ ESG risk management and preparedness. In particular, little is known about how Chinese investees perceive ESG engagement. This thesis investigates how ESG engagement with Chinese investees is conducted, taking into account the investees’ perspectives on ESG issues. It has been observed that how engagement activities contribute to the level of collective sense-making of ESG issues shared by engagement practitioners and Chinese investee companies is not as linear as literature has described. Moreover, Chinese investees in general display a relatively low awareness and limited understanding of ESG-related concepts, lack top-management support in addressing ESG matters strategically, are mostly motivated by client demand and regulations to address ESG issues, and are financially backed by the state or wealthy family shareholders. The thesis suggests an alternative model to conceptualise ESG engagement and the generated collective sense-making. The model encompasses engagement practitioners’ underlying approach or aim of engagement, the alignment of engagement activities with the underlying aim, the consideration of the Chinese investees’ characteristics during the engagement process, and lastly Chinese investee companies’ proactiveness towards addressing ESG matters. Specific recommendations to engagement practitioners and other stakeholders to further improve ESG engagement are proposed, which will help increase the chance of successfully motivating Chinese investees to enhance their ESG performance and thus strengthen the overall business case for responsible investment.}},
author = {{Sin, Kei Yau}},
issn = {{1401-9191}},
language = {{eng}},
note = {{Student Paper}},
series = {{IIIEE Master thesis}},
title = {{Responsible Investment: Understanding and Improving ESG Engagement with Chinese Investee Companies}},
year = {{2013}},
}