Hong Kong's first listed social responsibility index release "Hong Kong Main Board Listed Companies Social Responsibility Index"

HONG KONG, Oct. 8, 2019 /PRNewswire/ -- On October 2, Rising Glory Financial limited company, with Sodata Analytics Foundation Association and LBS Communications Consulting Limited, jointly released the Hong Kong Main Board Listed Companies Social Responsibility Index Series, which establish a standardized and intuitive assessment method to quantitatively evaluate the company performance in social responsibility and governance.

With a number of social issues such as global warming, resource depletion and environmental pollution continuously emerging, more and more investors are aware of the impact of these non-financial factors on the operating stability and stakeholder values of the companies. Hence, Environment, Social Responsibility, Corporate Governance ("ESG") factors have received extensive attention from the public. ESG is a standard used by investors to screen social-responsible investment targets and make investment decisions. The environmental factor examines the environmental protection concerns of companies; the social factor studies the ability of companies managing their relationship with the employees and communities around; corporate governance involves executive compensation, the corruption and litigation issues.

At present, international index developers have launched a number of ESG indices and derivative ETF investment products. The MSCI KLD 400 Social Index was created in May 1990 and is the world's first ESG index. The most influential indices are the MSCI ESG Series Index (Global/US/Emerging Markets), the FTSE4Good Series Index, and The Dow Jones Sustainability Series Index. The ESG-themed fund is also part of the relevant investment products issued by the international mainstream fund companies. Among them, BlackRock's MSCI US ESG ETF fund and Vanguard's FTSE Social Fund are among the most famous.

Traditional ESG evaluation requires a lot of effort to study and evaluate environmental governance and business management of different companies from different industries, and it is difficult to give a standardized evaluation through a uniform method. In addition, many aspects of ESG, such as environmental indicators, employee management indicators, etc., are mandatory indicators. Only the social responsibility is a voluntary one, which we see as an alternative useful indicator to reflect corporate social responsibility. For example, many companies will voluntarily invest a lot of human and financial resources into environment, education, health care and other charitable causes.

The Hong Kong Main Board Listed Companies Social Responsibility Index (Sodata Index) selects 100 stocks from the underlying stocks in Hong Kong's main board with higher social score ratings as index components. The social score rating consists of RGF self-developed evaluation factors such as the amount of donations, the growth rate of donations and the coefficient of sustainable donations which is the measurement of the implementation of charitable activities by enterprises on a continuing basis. The coefficient is based on the performance of the enterprise's continuous contributions on an exponential weighted average basis, thus reflecting better scoring for enterprises with sustainable contributions. The Hong Kong Blue Chip Listed Companies Social Responsibility Index (Blue Chip Sodata Index) selects the constituent stocks of the Hong Kong Hang Seng Index as index components and adjusts the market capitalization weight according to the social score ratings.

As the first index based on the social score rating of listed companies in Hong Kong, the Sodata index started on June 2, 2015 as the base date, with a base point of 1,000 points. Comparing the performance of the Sodata Index, since June 2, 2015, the Sodata Index has increased by 7.08%, while the Hang Seng Index has fallen by 5.45%. Since January 2, 2019, the Sodata Index has fallen by 2.94%, and the Hang Seng Index has risen during the same period 3.83%. Comparing the performance of the Blue Chip Sodata Index, since June 2, 2015, the Blue Chip Sodata Index has increased by 18.10%. Since January 2, 2019, the Blue Chip Sodata Index has increased by 2.48%.

Sodata Index, Blue Chip Sodata Index And Hang Seng Index
Sodata Index, Blue Chip Sodata Index And Hang Seng Index

Michael Yip, one of the founders of the Sodata Analytics Foundation Association, said: "ESG is the new darling of the current investment community. In 2018, almost a quarter of global funds has adopted ESG standards for investment decisions. As ESG and related regulations become more sophisticated, ESG Investment has a huge positive effect on the market, companies, investors and government regulators. According to the Hong Kong Sodata Analytics Foundation research, the top 100 corporate social responsibility (CSR) in the past three years, has demonstrated a relatively high return on alpha and lower volatility. It is believed that the Sodata Index would be a better tool to track the stock movements of companies with higher social responsibility in the Hong Kong main board market."

Joanne Chan, Managing Director of LBS Communications Consulting Limited, said: "The Principles for Responsible Investment (PRI) supported by United Nations reflect the relationship between ESG and the capital markets, and provides a framework for global investors to make a long term and sustainable investment decision. It also facilitates the development of a stable capital market. PRI is in line with the long-term interests of investors and global capital markets. It is also in line with the long-term interests of environmental and societal causes, a redefinition of current investment behavior. The ESG investment concept is gradually gaining widespread recognition from global asset owners, investment institutions, regulators and other investors. According to UN PRI data, as of August 2018, more than 2,000 organizations around the world signed up with assets of more than 80 trillion US dollars. PRI has had a profound impact on the long-term and sustainable development of capital markets. "

About Sodata Analytics Foundation Association

Sodata Analytics Foundation Association, a non-profit making organization, is committed in corporate philanthropy data analysis, promoting philanthropy transparency and encouraging social recognition.

"Nudge" - It also aims at inspiring more corporate and individuals to participate in CSR for achieving higher social value. Sodata Analytics Foundation Association has the vision to promote the concept of "Corporate philanthropy - Using the power of business for community change".

About Rising Glory Finance

Rising Glory Finance (RGF), with the No. 4 and No. 9 license issued by the Hong Kong SEC, is an asset management company with FinTech (Financial Technology Innovation) as its core competitiveness. RGF focuses on the quantitative hedge trading strategy for global market products, including equities, futures and options trading, and special situation investments.

About LBS Communications Consulting Limited

LBS Communications Consulting Limited is a professional financial communications and investor relations consulting company, and the only public relations agency from Hong Kong in the Public Relations Global Network(PRGN), with an extensive network of investors across Hong Kong, Shenzhen, Shanghai, Beijing, Singapore and other regions of the world. LBS has continuously focused on Corporate Sustainable Development. In recent years, the company has also proactively constructed its Greater China and Greater Bay Area investor relations promotion platform to provide investors matching and promotion events for investors from Asian listed companies and mid-to-large financing institutions. Also, the company leverage its comprehensive and sustainable investor relations services to explore sustainable businesses for listed companies and large financial institutions in Hong Kong and overseas.

Attachment: Index Details

Indexes

Sodata Index

Blue Chip Sodata Index

Launch Date

2 October 2019

Base Date

2 June 2015

Base Value

1000

Constituents

Selects 100 Main Board stocks with
higher social score ratings as index
components

Hang Seng Index constituents

Weighting Methodology

Freefloat-adjusted, market-capitalisation-weighted (tilted by ESG factors*)
10% cap on individual constituents

Calculation Method

The adjusted market value of the sample stocks in the reporting period is
divided by the daily divisor and multiplied by the base point 1000 as the
value of the reporting period index. The adjusted market value of the
sample stocks in the reporting period is the sum of the market capitalization
of all constituent stocks multiplied by their respective weighting factors.

The weighting factor is obtained by dividing the score of the social score
rating of each stock by the sum of the scores of the social score rating of all
constituent stocks, and the upper limit is 10%. When the index is not
adjusted, the divisor is the total market value for the base period; when the
index is adjusted, the divisor is the new divisor that is recalculated after
adjustment.

 

Report period index = Adjusted market value of sample stocks during the reporting period / divisor x1000

 

Adjusted market value = the sum of (Price x Outstanding shares x weighting factor)

Dissemination

Released after the end of each trading day

Organizations

Rising Glory Financial limited company, with Sodata Analytics Foundation
Association and LBS Communications Consulting Limited

Vendor code

(Thomson Reuters)

.RGFSODI

.RGFBCSI

Photo - https://photos.prnasia.com/prnh/20191004/2601211-1?lang=0

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