To implement the national strategy of "carbon peaking and neutrality" and the philosophy of ESG, Shanghai Sci-tech Capital (SSC) has recently signed the Principles for Responsible Investment (PRI) as an investment manager. PRI is a globally influential investor initiative representing assets of more than 120 trillion U.S. dollars. SSC will work with global institutions sharing the same vision to promote the application of the ESC principle in investment practices, thereby creating a green investment ecosystem and fostering new drivers for sustainable development.

ESG-oriented investment refers to integrating the ESG philosophy in investment practices: evaluating the potential of enterprises for medium & long-term development from the dimensions of environment, society and governance on the basis of a traditional financial analysis, to find a sustainable investment target that can create both economic benefit and social value. With the advent of the post-COVID era, achieving a harmony between and nature has become the vision of all humankind. The philosophy of responsible investment and sustainable development has been advocated by a growing number of domestic and foreign investors. ESG-oriented investment has gradually become a key investment strategic worldwide.

At the 75th Session of the United Nations General Assembly in 2020, China made a solemn commitment to the world to have carbon dioxide emissions peak before 2030 and achieve carbon neutrality before 2060". In 2021, the strategy of "carbon peaking and neutrality" was written into the Government Work Report, marking the emergence of a new industrial investment opportunity that will last for 40 years. The strategy, which covers a wide range of fields such as energy, environment, climate, economy and society, calls for the concerted efforts of the government, enterprises and the public. Promoting the ESG philosophy and developing a widely-involved ESG system is vital to the strategy. China's long-term capital has started to consciously guide GPs in making ESG-oriented investment to help invested enterprises pursue ESG-oriented development from their early days.

FoFs feature long periods, wide coverage and strong spillover. By integrating the ESG philosophy into the lifecycle of operation, capital raising, investment, management and exit, we can enhance its role in guiding the behavior of VC institutions and invested enterprises, and make stakeholders in the FoF ecosystem attach greater importance to the creation of environmental value and social value. It is one of the most effective ways to promote ESG-oriented investment in the Chinese private equity market.

After nearly five years of investment practices, SSC has developed more than 50 sub-funds investing in over 1,000 enterprises with a total contract amount of over 100 billion yuan, initially forming a 10-billion-level operation scale, creating a 100-billion-level industrial cluster and building a 1-trillion-level capital ecosystem, laying a solid foundation for promoting and implementing the ESG philosophy. In recent years, by integrating the ESG philosophy into its sub-fund performance evaluation system, SSC has guided sub-funds and start-up enterprises in implementing the philosophy during fighting COVID-19, strengthening fund allocation in the fields of medicare, environmental protection and new energy, and empowering education by technology. With signing PRI as an opportunity, SSC will implement the philosophy of long-term investment, value-oriented investment and responsible investment, and work with shareholders, LPs, sub-funds, invested enterprises and other sides to implement the national strategy of "carbon peaking and neutrality", thereby creating long-term value, and producing both economic benefit and social benefit.

Initiated by former UN Secretary-General Kofi Annan in 2006, PRI helps investors understand the investment implications of environmental, social and governance (ESG) factors, and supports its signatories in incorporating these factors into their investment strategies, decisions and ownership policies and practices, thereby promoting the sustainable development of the global financial system. The six principles of PRI provide a global framework for investors to perform their ESG responsibilities.

PRI has more than 4,600 signatories representing assets of over 120 trillion U.S. dollars, including institutional investors (pension funds, endowment funds, foundations, insurers, sovereign wealth funds, family offices, wealth management institutions, assets managers, etc.), as well as investor service providers (investment consultants, rating agencies, brokerage firms, stock exchanges, etc.).

SSC is a market-oriented FoF initiated by Shanghai International Group (SIG) according to the deployment requirements of the CPC Shanghai Municipal Committee and the Shanghai Municipal People's Government. Its key investors include SIG, Guosheng Group, SIPG, Guotai Junan Securities, Shanghai Trust, Zhangjiang Hi-Tech, China Pacific Insurance Group, Jiading State-Owned Assets Group, etc. With the mission of serving the building of Shanghai Sci-tech Innovation Center, it has a target scale of 30 billion yuan and now has over 12 billion yuan under management.