gaoteng
Climate Investing
Our Goal
GaoTeng is committed to contributing to green finance globally and enhancing value for our clients.
Our Approach
GaoTeng is committed to taking climate risks into consideration in its investment and risk management processes.
Governance
    GaoTeng has in place a governance structure to assess the impact of climate risks on assets under its management and formulate appropriate policies to address such risks.
  • Board
    • Our board monitors and oversees climate risk issues. It has delegated authorities to the Group Environment Committee (GEC) and Risk Management Committee (RMC). The Chief Operating Officer (COO) reports climate risk issues to the board annually.
  • Management
    • The Chief Executive Officer sets goals to address climate risks.
    • The COO reports climate risk issues to the GEC and the RMC, in addition to the board.
    • The Chief Investment Officer who heads up the Investment Team oversees the identification, assessment and management of climate risks by the Investment Team.
    • The Risk Team monitors climate risks and reports to the GEC and RMC quarterly.
    • The Product Team takes into account climate risks when it identifies, prioritises and reviews Gaoteng’s product strategies.
    • The Compliance Team monitors the adherence to GaoTeng’s Climate-related Risk Policy and Climate-related Risk Quantification and Management Policy.
Investment management
The Investment Team currently considers climate risks as relevant but not material to all the funds or strategies managed by GaoTeng.
We employ the following approaches to identify relevance and materiality:
  • When assessing relevance, the investment strategies of the funds, the sectors, geography and asset classes as well as carbon emission of portfolio assets will be considered. In making such assessment, the Investment Team looks beyond the usual investment horizon.
  • When assessing materiality, both quantitative and qualitative analyses are adopted.
    • Qualitative approaches include the consideration of the relevant measures to mitigate negative impacts arising from climate changes taken by the investee companies.
    • Quantitative approaches include the use of quantitative data such as climate-related risk scoring models, country risk of the investee companies and assignment of a score to each portfolio. After taking the average score for each portfolio, such score will be used to determine whether, in aggregate, the portfolio’s exposure to climate risks falls into the “material” category. The score is categorised as Low, Medium or High. If the score is High, the climate risks will be considered material.
When factoring the material climate risks into our investment management process, we will adopt one of the following approaches after assessing of the investment strategies:
  • For fixed income strategy, a bottom-up approach will be adopted, including both quantitative (such as issuer profile scores from a third party service provider) and qualitative approaches (such as internal analyses by the Risk Team) to assess the climate risks of the fixed income security or the issuer;
  • For equities strategy, a top-down approach will be adopted, including both quantitative (such as our in-house scoring system at both country and sector levels in connection with physical risk and carbon emission or carbon footprint in connection with transition risk based on external sources) and qualitative approaches (such as internal analyses of industry/sector by Risk Team) to assess the climate risks of the equity security.
Risk management
Our comprehensive risk management framework covers the monitoring of climate risks as well as the steps to identify, assess and monitor changing climate risks.
We employ a variety of tools to make ongoing assessments on the relevance and materiality of climate risks to our funds or strategies.
We also have policies to provide guidance to the Investment Team on integrating climate risk considerations into the investment management process, including guidance applicable to specific strategies.
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