A bold green ambition: how Yangtze Power became the first Shanghai-London Stock Connect issuer to receive the Green Economy Mark
China Yangtze Power Co., Ltd (Yangtze Power) is the national business card of China’s expertise in hydropower. Founded in 2002, its four mega hydropower stations situated on the Yangtze river account for nearly 16% of the total hydroelectric power in China. Its installed capacity of 45.495GW, which is set to increase by a further 26.2GW in the near future, makes it the largest hydropower company in the world.
With a market capitalisation of $60bn+ and a leading position in the global hydropower industry, Yangtze Power is also a company with large international ambitions. The company currently provides technical advisory services to hydropower projects in other countries including Brazil, Pakistan, Malaysia and Uganda, and has made direct international investments into electricity distribution including Luz del Sur in Peru and offshore wind.
Shanghai-London Stock Connect listing supports Yangtze Power’s global development
To assist Yangtze Power to raise foreign capital to fund its global development, Yangtze Power has become the third Chinese company to list on London Stock Exchange through its innovative Shanghai-London Stock Connect, launched in partnership with the Shanghai Stock Exchange. This offers Yangtze Power a significant new opportunity to gain access to international investors through listing its GDRs in London.
Shanghai-London Stock Connect provides the only access to China’s A-Shares on an exchange outside Greater China using international trading and settlement practices. Trading of GDRs is available on the Shanghai Segment of London Stock Exchange’s International Order Book.
Green Economy Mark award highlights Yangtze Power’s green credentials
Of equal significance is that Yangtze Power will receive the Green Economy Mark upon admission. It is the first Stock Connect listing to be awarded the Mark. The Mark, which is a world-first and unique initiative by London Stock Exchange, is a data-driven green classification and Mark for equity issuers. Using FTSE Russell’s Green Revenues 2.0 Data Model as the underlying framework, it identifies companies across the Main Market and AIM with at least 50% of their total revenues derived from green products and services.
As Yangtze Power is one of the world’s largest providers of clean energy, the Green Economy Mark was of great interest to the company. The expectation of receiving the Green Economy Mark on admission became an integral part of the company’s conversations with prospective investors.
Discussing the listing, LEI Mingshan, Chairman of the Company, added: “The GDR issuance of Yangtze Power is not only beneficial for our overseas business expansion and capital structure optimization, it also helps us get access to overseas equity financing, integrate with international capital markets and further develop our international strategies. As a leading A-share listed company, we believe Yangtze Power‘s GDR issuance would enrich the Shanghai-London Stock Connect portfolio and provide better investment opportunities for global investors. We are also proud that our commitment and contributions to generating sustainable energy has been recognised by being awarded a Green Economy Mark.”
The combination of listing its GDRs on the Shanghai Segment of London Stock Exchange and being awarded the Green Economy Mark increases the ability of Yangtze Power to access international capital while raising its profile as a leader in the global green economy.
Investors around the world want to understand issuers’ exposure to green products and services as part of a broader demand for clear disclosure and active management of ESG and climate change-related opportunities and risks. For investors, the Green Economy Mark helps to identify green economy equities with a broad, cross-sector and international exposure and raises the profile of companies contributing to the green economy that may otherwise be missed by green or climate-aware investors.
For an issuer such as Yangtze Power, the Mark provides greater visibility to those investors and tangible evidence of their contribution to a sustainability strategy.
There is strong appetite among these investors. Collectively, issuers with the Green Economy Mark have outperformed the FTSE All-Share Index over the past two years by 36%. While the markets experienced significant volatility during the COVID-19 pandemic, Green Economy Mark equities have, in aggregate, demonstrated greater resilience and subsequently recovered faster than the rest of the market1,2.
Improving the visibility and the access to capital for green and sustainable commercial activities worldwide is a key goal of London Stock Exchange. London supports companies across all sectors and from around the world to access the capital needed to address environmental risks and opportunities.
With this transaction we have brought together the strengths and innovations of Shanghai-London Stock Connect and our Green Economy Mark to bring Yangtze Power as an internationally important clean energy company to London’s deep pool of global investors. It is an innovative and unique approach
There are many other Chinese companies that are also helping to drive the global green economy. We hope that they will also pursue a similar bold path.
- Share price return, June 2018 to May 2020, internal data source.
- Past performance is no guarantee of future returns.