Sustainable development in China received a boost earlier this year when the Bank of China launched the Sustainable Growth Equity Fund, the country’s first socially responsible investment (SRI) fund.
The fund is a joint venture with US firm Merrill Lynch, and launched at nearly 2.5 billion yuan (US $312 million) with nearly 60,000 investors, mainly individuals. China has recently enacted more environmental legislation, which coupled with a growing awareness among the middle class, has created a market for SRI funds among Chinese investors.
However, environmentalists are concerned about vague terminology and a lack of incentives. Jennifer Turner, who heads the China Environment Forum at the Woodrow Wilson International Center for Scholars, said an SRI fund is a good way to get at polluting Chinese industries, but that without transparency, there is no incentive to be socially responsible.
"In essence, you have Bank of China, a government bank, judging Chinese factories that are government-owned," said Turner. Ideally, a mixed panel of researchers, citizens and non-governmental organizations are needed to ensure transparency.
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