International finance-focused think tank Shanghai Finance Institute Shanghai Finance Institute (SFI) announced today that it has made a minority stake investment in and partnered with AI-enabled corporate governance and ESG investment advisor Governance Solutions Group (GSG). SFI stated that its aim in the transaction is to further enhance China focused sustainable investment exploration and progress. GSG is focused on China’s capital market, first such China-based provider to become a signatory to the UN PRI.

GSG provides three primary services to asset manager and asset owner clients, including governance risk rating, ESG consulting, and data, while also providing differentiated service solutions for international and Chinese clients.

Dr. Wang Dequan (Davis), CEO of GSG, said:

 “For international institutional investors, GSG aims to provide in-depth local insight on corporate governance, business ethics and risk control practices on the Chinese listed companies. We also provide on the ground assistance to international clients on their engagement and voting activities. For engagement, we’re collaborating with the China Securities Investor Service Center (CSISC). CSISC is a legally sanctioned representative to minority shareholders, with the mission of making shareholder engagement more effective.”

SFI Chair Mr. Tu Guangshao has submitted a proposal calling on regulators and industry associations to promote ESG investment practices in China. In his proposal, Mr. Tu stated:

“ESG investment and responsible investment can better achieve the combination of commercial benefits and social value, so that long-term performance is improved, risks are mitigated and long-term returns are more secure. ESG investment is of vital importance to support China’s commercial, environmental and social progress.”

Mr. Tu’s proposal suggests that regulators and industry associations work together to:

  • Improve the disclosure guidelines of ESG information;
  • Build an ESG evaluation system that meets China’s market conditions
  • Urge institutional investors, especially long-term asset management institutions such as social security funds and sovereign wealth funds to include responsible investment in their investment evaluation system.

Dr. Wang said:

“We are honored to cooperate with SFI in a number of areas, including responsible investment research, ESG rating advisory and related policy development.”