As part of investment analysis, HSZ Group carries out environmental, social, and governance (ESG) analysis alongside the traditional financial analysis. Compliance with ESG in substance has always been an important criterion to test for "inner strength" in our investment process.
We focus on different ESG topics. For the environmental aspect, we will consider topics such as carbon emissions, climate change, energy use, water resources, ecological protection, pollutant emissions, raw material sources, clean technology. For the social aspect, we will consider topics such as human capital management, health and safety, information and data security, product and service quality, and supply chain management. Finally, for the governance aspect, we will consider topics such as board composition, ownership and control, pay policy, and litigation status. The materially of these topics depends on the actual situation when it comes to an investment case. We conduct identification and evaluation according to our practical experience.
Predating standard ESG frameworks, our core capabilities have centered around assessing ESG risks and opportunities and their financial materiality. We believe that embedding the factors of ESG into our entire investment decision-making and management processes can enhance the steady return on the investment we make and provide the driving force for the sustainable development of the environment and society.
We have been a signatory of the Principles for Responsible Investment (PRI) since 2020. We will disclose our general approach to ESG integration through the PRI reporting framework. Relevant information will be available on the PRI’s website.