China’s government in December 2020 announced the country aims to reach a peak in greenhouse-gas (GHG) emissions by 2030 and become carbon-neutral by 2060. How could this commitment affect the risk-return profiles of Chinese companies in various sectors?
In this paper, we used MSCI ESG Research’s climate-related metrics and forward-looking estimations to analyze a hypothetical Chinese equity portfolio and check its level of alignment with China’s national target for GHG emissions. We found that, if the national targeted trajectory was maintained, there will be a substantial gap between the projected and targeted GHG emissions levels by 2030 for companies in the MSCI China Index.
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