“China’s listed firms need to beef up Communist party-building activity, regulator says” – Reuters – June 15, 2018

On June 15, 2018 Reuters reported that the China Securities Regulatory Commission (CSRC) had published revised corporate governance rules on its website, inviting public comment.

According to the article, the revised CSRC rules require listed companies to “beef up the work of Party-building and shoulder more social responsibilities, such as contributing to a better ecological system and helping the poor.”

Also, the “regulator said it had also set up a basic framework for listed companies to disclose environmental, social and governance (ESG) information.”

As of June 1, 2018 MSCI includes mainland Chinese stocks in its emerging markets benchmark.  MSCI and numerous other ESG/governance research firms have noted that Chinese listed companies lag their emerging markets peers on ESG indicators.

China presents a conundrum for ESG investors, given that directors of Chinese firms are responsible to the Communist party, shareholders and other stakeholders.

You can read the article on the Reuters internet site.

“Emerging markets next on map for impact investing” – Pensions & Investments – June 11, 2018

In an article published on June 11, 2018 Pensions & Investments posits that “(i)mpact investing in emerging markets might be poised for a major growth spurt, as proponents see pension funds and other institutional investors taking an increasing role in a field that largely has been filled by government financial institutions, foundations, and more specialized private equity managers.

The article quotes managers of impact investing portfolios at several large institutional investors, the executive vice president of the Overseas Private Investment Corporation (OPIC) and executives from industry associations, including EMPEA, the global industry association for private capital in emerging markets, and the Global Impact Investing Network (GIIN).

“To Patricia Dinneen, Boston-based chairwoman of EMPEA’s Impact Investing Council, ‘what’s really becoming evident is that emerging markets is impact investing, and people are beginning to recognize it. We are almost redefining the new mainstream,’ she said.

‘The real driver for investors is risk mitigation and portfolio diversification. Every investment has an impact, and the objective is to expand and accelerate investments that benefit society and investors,’ Ms. Dinneen said, because pension funds, insurance companies and other fiduciaries want returns, and to align their mission and to satisfy the demands of their stakeholders.”

You may read the article on the Pensions & Investments internet site.