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Equity Portfolio includes HSZ China Fund.
We cultivate our adaptability to respond to ESG issues and identify as well as manage climate-related risks beforehand to reduce the financial impact of physical risks and transition risks on our equity investment.
To avoid the decreases in investment asset value when an investee company is impacted by physical damages from natural disasters as well as transitional cost hikes from transformation towards a low-carbon economy, we will consider climate-related risks in the investment research and analysis process, provided that the risk is highly material to the investee company.
As for mitigating the climate-related risks in equity investment, we adopt the sector exclusion method to avoid investment exposure in high climate risk sectors. We have avoided investing in carbon-intensive sectors as much as possible. Besides, we have actively invested in climate-resilient sectors, such as new energy vehicles, renewable energy electric utilities, renewable energy equipment, and energy storage system.
In addition, we carefully consider the future development opportunities and risks of potential investee companies and the sectors they belong to. If the majority of the companies’ revenue comes from sectors including oil, thermal coal, tobacco, gambling, adult entertainment, controversial weapons, civilian firearms, violent video games, and military equipment and services, we will exclude the companies. These sectors are inconsistent with our investment philosophy.