Increased attention to environmental, social and governance (ESG) investments has led to an increase in demand for data on ESG factors. Most ESG performance assessment relies heavily on manual data collection and processing, which is inefficient and slow and results in poor data quality.
Ping An unveiled its ESG rating system in 2021 powered by natural language processing (NLP), knowledge graph, machine learning and satellite remote sensing. The system was able to collect ESG disclosure-based regulatory data as well as alternative non-disclosure-based data to provide richer and multidimensional information. The recently upgraded ESG rating system has further improved the accuracy and comprehensiveness of the data. It consists of 21 first-level indicators, 90 second-level indicators and 278 data points to measure ESG risks and opportunities for 37 industry sectors. The system can make real-time adjustments based on news and public sentiment.
A unique feature of the AI-based system is its ability to separately generate company disclosure and performance scores for a more complete assessment of a company’s ESG disclosure and performance. The disclosure score primarily examines the level of information disclosure by companies in traditional ESG data sources, such as ESG reports and annual results reports, with a focus on qualitative indicators. The performance score measures ESG performance with an emphasis on quantitative indicators.
The system covers more than 4,500 A-share listed companies and more than 2,700
Ping An’s CN-ESG assessment framework incorporates domestic and international disclosure standards and key frameworks to suit the Chinese context. The assessment framework refers to a number of ESG assessment frameworks, including the GRI, HKEX, SASB, TCFD, the Shenzhen Stock Exchange’s Social Responsibility Guidelines and the Shanghai Stock Exchange’s Social Responsibility Guidelines. Of all the core issues included in the CN-ESG framework, 87% overlap with at least one international framework and 13% of the indicators are specific to the Chinese context. Subsequently, the CN-ESG framework will also focus on the development of material industry-specific indicators, driven by in-depth fundamental industry analysis that will complement the existing set of core indicators.
Ping An believes that responsible investment helps manage risk and contributes to sustainable long-term returns. This system has been applied within Ping An’s investment business subsidiaries to support ESG investments. Regarding
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