On December 2, 2025, the 13th China Sustainable Investment Forum (China SIF) Annual Meeting was successfully held in Beijing. The event was hosted by SynTao Green Finance, with co-hosts including the United Nations Environment Programme Finance Initiative (UNEP FI) and the United Nations Sustainable Stock Exchanges Initiative (UN SSE). Dozens of experts from regulatory bodies, markets, academia, and international organizations shared insights on the evolving landscape of global responsible investment and emerging ESG opportunities.

Luisa FLOREZ, Global Head of Sustainable Finance Research at Ofi Invest Asset Management and Chair of the Engagement Committee at the French Sustainable Investment Forum (French SIF), delivered a keynote speech titled "Building a New Investment Paradigm for Sustainable Returns Through Resilience."

**Key Highlights from the Speech:**

### **A New Investment Paradigm for Sustainable Returns Through Resilience** *By Luisa FLOREZ, Global Head of Sustainable Finance Research at Ofi Invest Asset Management and Chair of the Engagement Committee at French SIF*

Amid escalating climate crises and financial market volatility, systemic risks increasingly threaten investment returns. Ofi Invest—France’s fourth-largest asset manager with over 25 years in responsible investing—has integrated environmental, social, and governance (ESG) factors into a dual "risk-resilience and value-creation" investment framework. This approach transforms ESG from a risk-mitigation tool into a core driver of sustainable returns, helping investors navigate market cycles.

### **1. Global ESG Trends: Reshaping Risks and Opportunities** ESG investing is shifting from reactive compliance to proactive strategy, driven by three key factors:

**(1) Climate Physical Risks Intensify Financial Strain** Climate-related disasters caused $320 billion in economic losses in 2024, with insurance costs hitting $140 billion—38% above the decade’s average. The U.S. bore 57% of weather-related insurance losses, with California’s crisis epitomized by QBE Insurance withdrawing 37,000 homeowner policies due to wildfire risks. Premiums in high-risk areas surged 42%, leaving 150,000 families uninsured—a situation that could trigger cascading financial instability.

**(2) Net-Zero Transition Accelerates Capital Reallocation** Achieving 2050 net-zero targets demands fundamental shifts in energy production and consumption, redirecting capital from high-carbon sectors to renewables and carbon storage. Traditional industries face transition risks, while green technologies offer long-term growth.

**(3) Global ESG Regulations Tighten Compliance** Europe’s SFDR (Sustainable Finance Disclosure Regulation) and CSRD (Corporate Sustainability Reporting Directive) frameworks, alongside France’s Energy-Climate Law Article 29, mandate ESG disclosures. Non-compliance now risks penalties and higher financing costs.

### **2. Policy and Market Forces Drive ESG Integration** ESG adoption stems from regulatory mandates, market demand, and risk mitigation. Examples include Volkswagen’s €24.7 billion "Dieselgate" penalty and BP’s €20.8 billion Deepwater Horizon settlement. ESG integration shields portfolios from systemic risks (e.g., climate change, inequality) while optimizing asset allocation—fixed income outperforms in net-zero scenarios, while equities excel in baseline forecasts.

### **3. ESG Value Creation: From Risk Mitigation to Alpha Generation** Ofi Invest’s ESG framework spans three dimensions:

**(E) Environmental:** Excludes high-risk assets (e.g., thermal coal) while targeting renewables and storage. **(S) Social:** Enhances resilience through stakeholder engagement, supporting fair labor (ILO standards) and community development. **(G) Governance:** Internal ESG analysts rate 97.7% of investments, with active shareholder engagement (976 AGM votes in 2024).

### **4. Ofi Invest’s Sustainable Investment Framework** The firm’s three-pillar strategy: 1. **Net-Zero Scenario Analysis:** Guides decade-long asset allocation. 2. **Full-Cycle ESG Management:** Rigorous screening and exclusions. 3. **Sustainable Finance Ecosystem:** €123 billion in SFDR-aligned assets, including 39 ESG funds (70% meeting Article 8 criteria).

Looking ahead, Ofi Invest will deepen ESG integration, focusing on climate transition to deliver dual financial and societal returns.

The China SIF Annual Meeting was supported by strategic partners including Harvest Fund, SPDB-AXA Investment Managers, and Pictet Asset Management, among others.