Conclusion

China’s place and power in the world means no investment portfolio is immune to the ESG issues highlighted in this Insight. Exposure can come in many ways: investing in Chinese companies, multinationals with direct operations in China, supply chains or through companies selling to China: these are all part of a global investment universe raising many challenges for responsible investors.

At EdenTree we are committed to responsible and sustainable investment globally, meaning that we will conduct robust screening, excluding companies with the most severe breaches of our standards and engage with others when we identify issues. We believe that enhanced due diligence and ongoing engagement is needed with businesses that have exposure to China.

China’s development has been remarkable; it is clear however that it is not following the liberal democratic path that many in the west had perhaps hoped for or expected. There is no doubt that China will continue to be a key market and global power in the twenty-first century, and it will likely remain an attractive growth market. Investors will watch closely as China continues to shape the world and follows the Chinese Dream to become a fully developed nation by 2049 when it celebrates the 100th anniversary of the creation of the PRC. However for the responsible and sustainable investor, many challenges remain.

There is no doubt that China will continue to be a key market and global power in the twenty-first century, and it will likely remain an attractive growth market. However, we believe that enhanced due diligence and ongoing engagement is needed with businesses that have exposure to China.