<figure class="image">

<img alt="" src="https://resources.miotech.com/static/landing-page/system/undefined1660545177257_phillip-glickman-aUj1l9g4Lfs-unsplash.jpg/th1000" />
<figcaption>Source: Unsplash</figcaption>
</figure>

&nbsp;

<img alt="" height="476" src="https://resources.miotech.com/static/landing-page/system/undefined1660545211763_图片3.png/th1000" width="500" />

&nbsp;

Renewables and coal rise gas shortage - On August 11, the International Energy Agency (IEA) published the &ldquo;<a href="https://www.iea.org/reports/electricity-market-report-july-2022/executive-summary">Electricity Market Report - July</a>&rdquo;, identifying two simultaneous trends:

<ul>
	<li>
	The shortage of gas supply and the consequent price surge is prompting countries to turn its hope to coal power. European governments are putting off the phase out of coal power plants and ease the restrictions on their usage.
	</li>
	<li>
	Significant additions to renewable capacity is driving renewable power generation to grow at a faster speed than that of the electricity demand in 2022. Renewable power generation is seen to rise by over 10% this year, while the overall low-carbon electricity generation is set to rise by 7% given a 3% decline in nuclear power generation.
	</li>
</ul>

As risers and fallers among fossil fuels and renewables offset each other, CO2 emissions from electricity generation are expected to fall in 2022 from the previous year, but at a marginal rate of less than 1%.

<figure class="image">
Chart: Global change in electricity emissions by source and emissions intensity
<img alt="" height="355" src="https://resources.miotech.com/static/landing-page/system/undefined1660545411679_屏幕截图 2022-08-15 100506.png/th1000" width="700" />
<figcaption>Source: IEA</figcaption>
</figure>

&nbsp;

Meanwhile, Reuters <a href="https://www.reuters.com/business/energy/developers-add-less-than-half-planned-us-solar-capacity-h1-eia-2022-08-11/">reported</a> the drastic slowdown in the installation of solar photovoltaic capacity in the United States, with less than half of the capacity planned for 1H22 being actually installed. According to the US Energy Information Administration (EIA), power plant developers have planned to add 17.8GW of solar PV capacity in 2022 while only 4.2GW have come online in the country across the first six months of 2022.

The State of California has just <a href="https://www.energy.ca.gov/news/2022-08/cec-adopts-historic-california-offshore-wind-goals-enough-power-upwards-25">made</a> a boost to its transition to 100% clean electricity with a series of new targets it set for offshore wind power development, including to top up the offshore wind capacity in the state to 2GW to 5GW by 2030, and further to 25GW by 2045. According to the California Energy Commission (CEC), the power generation from offshore wind energy will be enough to power 25 million homes by mid-century.

Last week, China&rsquo;s Shanghai also <a href="https://www.chinacace.org/news/fieldsview?id=13814">proposed</a> ambitious clean electricity goals to reach 4.07GW of solar PV and 2.62GW of wind power capacity in the city by 2025 and move forward with 7GW of solar PV and 5GW of wind power capacity by 2030.

Soaring energy prices are reflected in the latest quarterly financial report of Saudi Aramco. According to <a href="https://www.wsj.com/articles/aramco-reports-record-profit-injecting-saudi-kingdom-with-cash-11660461665?mod=hp_lead_pos5">WSJ</a>, the state oil company of Saudi Arabia recorded USD 48.4bn in net income in the second quarter, which marks a 90% jump from USD 25.5bn in the first quarter.

&nbsp;

Tesla AGM: 10 or 12 gigafactories, support workers&rsquo; rights proposals - Tesla may end up building &ldquo;probably at least 10 or 12 Gigafactories&rdquo;, said its CEO Elon Musk at the company&rsquo;s annual shareholder meeting, in its ambition to produce up to 20 million cars a year, Caixin <a href="https://www.caixin.com/2022-08-06/101923475.html">reported</a>. Tesla now has two gigafactories in the US as well as one in Shanghai, China and Berlin, Germany respectively. Shanghai has the most productive Gigafactory with an annual production of over 750,000 units of cars.&nbsp;

While rolling out of its network of plants, workers&rsquo; rights is another highlight at the meeting. A shareholder resolution hoping for company to report on its effort to prevent harassment and discrimination against the &ldquo;protected classes of employees&rdquo; has won the support of 46% of its shareholders. According to <a href="https://www.responsible-investor.com/esg-round-up-tesla-sees-strong-support-for-worker-rights-proposals/">Responsible Investor</a>, the fact that Elon Musk holds 15% of the company&rsquo;s equity has made this more impressive as the threshold to obtain a majority and pass is very high in this situation.

&nbsp;

Five Chinese SOEs announced New York exit - Last Friday, PetroChina (PTR.US), Sinopec (SNP.US), Aluminium Corporation of China (ACH.US),&nbsp; China Life Insurance (LFC.US), and Sinopec Shanghai Petrochemical Co (CHI.US) have consecutively announced that they will apply to delist their shares from the New York Stock Exchange. Caixin <a href="https://finance.caixin.com/2022-08-12/101925599.html">noticed</a> that China Eastern Airlines and China Southern Airlines are the only two Chinese central enterprises that are still keeping their ADRs without a delisting plan.

China&rsquo;s capital market watchdog CSRC later that day <a href="http://www.csrc.gov.cn/csrc/c100028/c5356611/content.shtml">said</a> they were aware of the companies&rsquo; announcements. CSRC said both listing and listing are what happens in the capital markets, and it is clear in the companies&rsquo; announcements that delisting is their own business decision. CSRC added that only a small portion of the shares of these companies are traded in the US.

Meanwhile, things are moving up in Hong Kong as China Tourism Group Duty Free Corp aims to raise up to USD 2.16bn in its upcoming Hong Kong listing, Reuters <a href="https://www.reuters.com/markets/asia/china-tourism-seeks-216-bln-hong-kongs-biggest-listing-so-far-2022-term-sheet-2022-08-12/">reported</a>. This makes it replace Tianqi Lithium as the biggest Hong Kong IPO this year. It got the nod from the Stock Exchange of Hong Kong last Tuesday, according to <a href="https://cn.investing.com/news/stock-market-news/article-2125755">CLS</a>.

&nbsp;

Hottest summer and going on - You are probably familiar with Europe&rsquo;s struggling to live with reduced availability of gas and one of the options is resuming coal power plants. Now even that has issues, because of the extraordinary heat of this summer. According to <a href="https://www.bloomberg.com/news/features/2022-08-10/europe-s-low-water-levels-threaten-rhine-river-hit-80b-trade-lifeline">Bloomberg</a>, at the river of Rhine, a vital transport link for Germany, falling water levels caused by the ongoing drought are making it impassable to ship coal. This year, the water levels at different points of the river are up to 50% lower compared historical average.

France, being heavily dependent on nuclear power, is also suffering from the drought. As the nuclear reactors take water from rivers to cool them down and discharge the heated water, hotter water in the river has made this cooling less effective and may cause disruption in power generation. The water discharge is subject to temperature limits to avoid harm to the ecosystem, but according to <a href="https://www.wsj.com/articles/edfs-nuclear-reactors-to-discharge-hotter-water-amid-heat-wave-energy-crisis-11659976190?tpl=sb">WSJ</a>, &Eacute;lectricit&eacute; de France SA (EDF) has obtained a temporary exemption from the government to discharge hotter water into the river, to maintain the operation of nuclear power plants. EDF said it monitors the wildlife to make sure they are not harmed by the water discharge.&nbsp;

Green Central Banking has <a href="https://greencentralbanking.com/2022/08/09/temperature-shocks-us-monetary-policy/?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=20220811">reported</a> on a research by Filippo Natoli Bank of Italy, which based on US economic data, found that extreme temperatures have negative effects on private consumption and investment, both being key components of GDP, and such effects could last for as long as four years following the temperature shocks. The CPI is also subject to this negative impact but with a greater lag. Seen in combination with the Federal Reserve&rsquo;s interest rate decision reveals that on average, the Fed responded to the negative climate-related impacts on the economy with lower policy rate. However, the Fed seems not to recognise climate as a factor contributing to economic shocks and seldom mention it in its meetings.

&nbsp;

CATL to build a battery plant in Hungary - According to <a href="https://www.reuters.com/business/autos-transportation/chinas-catl-build-new-756-bln-battery-plant-hungary-2022-08-12/">Reuters</a>, China&rsquo;s leading battery maker CATL said last week it would build a battery plant in the European country Hungary, with a capacity of 100GWh. The project is expected to cost EUR 7.3bn (USD7.5bn).

On the same day, the BMW Group announced that it has launched some projects to improve sustainable packaging in logistics and reduce carbon emissions in the supply chain, as <a href="https://www.esgtoday.com/bmw-launches-initiatives-to-improve-sustainable-packaging-reduce-emissions-in-supply-chain/">reported</a> by ESG TODAY.

&nbsp;

HSBC launches biodiversity ETF - HSBC Asset Management has launched the HSBC World ESG Biodiversity Screened Equity. The fund will track the Euronext ESG Biodiversity Screen index. The fund will be classified as an Article 8 product under the EU SFDR, that is, a financial product promoting environmental or social characteristics.

&nbsp;

Connecting workplace: Mark Carney chairs&nbsp;Brookfield AM, Kelly Hagg joins Nuveen as responsible investing head&nbsp;- Brookfield said <a href="https://www.linkedin.com/in/mark-carney-5b9744205/?originalSubdomain=ca">Mark Carney</a> will chair its asset management business when the unit becomes a separate company and lists in Toronto and New York, according to <a href="https://www.reuters.com/business/finance/mark-carney-chair-brookfield-asset-management-post-spin-out-2022-08-11/">Reuters</a>. The asset management arm of the company now has over USD 750bn in AUM. Mark Carney is currently the vice-chairman at the company. As the U.N. special climate envoy, Carney is one of the leaders in the global climate finance field. He is also a former governor of the Bank of England.

In addition, Nuveen has appointed <a href="https://www.linkedin.com/in/kelly-hagg/">Kelly Hagg</a> as Senior Managing Director and Head of Responsible Investing Strategy &amp; Solutions, according to <a href="https://www.esgtoday.com/nuveen-appoints-kelly-hagg-as-head-of-responsible-investing-strategy-solutions/">ESG TODAY</a>. Hagg joins Nuveen after nearly 20 years at Janus Henderson Investors where his most recent role was Global Head of Product Strategy and ESG.

&nbsp;

<h6 class="editor-title6">References</h6>

<h6 class="editor-title6">[1] IEA - Executive summary &ndash; Electricity Market Report - July 2022 &ndash; Analysis - IEA</h6>

<h6 class="editor-title6">[2] Reuters - Developers add less than half of planned U.S. solar capacity in H1 - EIA | Reuters</h6>

<h6 class="editor-title6">[3] 上海市发展和改革委员会 - 上海市能源电力领域碳达峰实施方案</h6>

<h6 class="editor-title6">[4] 财新网 - 特斯拉预计建立10至12座工厂 下一座或位于加拿大</h6>

<h6 class="editor-title6">[5] Responsible Investor - ESG round-up: Tesla sees strong support for worker rights proposals | Responsible Investor</h6>

<h6 class="editor-title6">[6] 财新网 - 多家国企中概股公告美国退市 证监会称企业自主行为</h6>

<h6 class="editor-title6">[7] 中国证监会 - 证监会有关部门负责人答记者问</h6>

<h6 class="editor-title6">[8] 财联社 - 港股IPO周报：中国中免通过聆讯 3家公司招股</h6>

<h6 class="editor-title6">[9] Reuters - China Tourism seeks $2.16 billion in Hong Kong&#39;s biggest listing so far in 2022</h6>

<h6 class="editor-title6">[10] Bloomberg - Historic Drought Threatens to Cripple European Trade</h6>

<h6 class="editor-title6">[11] WSJ - EDF&rsquo;s Nuclear Reactors to Discharge Hotter Water Amid Heat Wave, Energy Crisis</h6>

<h6 class="editor-title6">[12] SSRN - The Macroeconomic Effects of Temperature Surprise Shocks</h6>

<h6 class="editor-title6">[13] Green Central Banking - Temperature shocks already influencing US monetary policy &ndash; report</h6>

<h6 class="editor-title6">[14] Reuters -&nbsp;China&#39;s CATL to build $7.6 bln Hungary battery plant to supply Mercedes, BMW</h6>

<h6 class="editor-title6">[15] ESG TODAY - BMW Launches Initiatives to Improve Sustainable Packaging, Reduce Emissions in Supply Chain</h6>

<h6 class="editor-title6">[16] Reuters - Mark Carney to chair Brookfield Asset Management post-spin out</h6>

<h6 class="editor-title6">[17] ESG TODAY - Nuveen Appoints Kelly Hagg as Head of Responsible Investing Strategy &amp; Solutions</h6>

<h6 class="editor-title6">[18] WSJ - Saudi Aramco Posts 90% Jump in Profit, Generating Billions for Kingdom</h6>

<h6 class="editor-title6">[19] Funds Europe - HSBC launches biodiversity ETF</h6>

&nbsp;

Green Capital Weekly August 15 | Tesla shareholders back anti-harassment proposals; Drought making Rehine impassable for German coal boats

Hong Kong

<figure class="image">

<img alt="" src="https://resources.miotech.com/static/landing-page/system/undefined1659946332079_cop26-blue-zone-globe.jpg/th1000" />
<figcaption>Source: COP26</figcaption>
</figure>

&nbsp;

<img alt="Hang Seng CSI TAIEX S&amp;P" height="476" src="https://resources.miotech.com/static/landing-page/system/undefined1659946373930_图片5.png/th1000" width="500" />

&nbsp;

Industry department expected to lead the decarbonisation game - On August 1, China&#39;s multiple government offices jointly&nbsp;<a href="http://www.gov.cn/zhengce/zhengceku/2022-08/01/content_5703910.htm">released</a> a plan aimed at guiding carbon emission reduction across its industry department, outlining the key tasks, essential actions and policy incentives. The main targets raised in the plan for the year 2025 include:

<ul>
	<li>Industrial firms meeting certain thresholds should reduce their energy consumption per unit of added value by 13.5%;</li>
</ul>

<ul>
	<li>CO2 emissions per unit of added value from the industry department should decline at a faster pace than that of the entire economy;</li>
</ul>

<ul>
	<li>Key industrial sectors should see a significant drop in CO2 intensity.</li>
</ul>

The plan also requires the industrial sector to reach peak emissions before 2030.

&nbsp;

Green bond that matures in 2072 - Singapore&#39;s inaugural sovereign green bond &quot;Aug-72&quot; is now open for subscription,<a href="https://www.mas.gov.sg/news/media-releases/2022/singapore-prices-2-4-billion-50-year-inaugural-sovereign-green-bond-public-offer-now-open-for-individual-investors"> </a><a href="https://www.mas.gov.sg/news/media-releases/2022/singapore-prices-2-4-billion-50-year-inaugural-sovereign-green-bond-public-offer-now-open-for-individual-investors">according to</a> Singapore&#39;s central bank. The first tranche of the city-state&#39;s first ever sovereign bond is issued with a total amount of SGD 2.4bn (USD 1.7bn), a yield of 3.04% and a tenor of 50 years. It follows the Singapore Government<a href="https://www.mas.gov.sg/news/media-releases/2022/singapore-green-bond-framework-introduced-for-upcoming-inaugural-singapore-sovereign-green-bond-issuance"> </a><a href="https://www.mas.gov.sg/news/media-releases/2022/singapore-green-bond-framework-introduced-for-upcoming-inaugural-singapore-sovereign-green-bond-issuance">announcing</a> the publication of Singapore Green Bond Framework on June 9. The yield of 3.04% marks a significant tightening from the 3.15% of the initial price guidance due to the high volume of demand: the bond was 2.26 times oversubscribed with a combined order value of over SGD 5.3bn. The tenor of 50 years is unusually long, not just compared to other government green bonds, but also standing out as the first 50-year bond issued by the Singapore government. Hong Kong&#39;s inaugural retail green bond issued on May 18 has a tenor of three years, which raised HKD 20bn (USD 2.5bn).

&nbsp;

China-US climate talk halted following Pelosi&#39;s visit to Taiwan, CATL pauses North American production plan - On August 5, China&#39;s Ministry of Foreign Affairs<a href="https://www.fmprc.gov.cn/eng/zxxx_662805/202208/t20220805_10735706.html"> </a><a href="https://www.fmprc.gov.cn/eng/zxxx_662805/202208/t20220805_10735706.html">announced</a> eight countermeasures in response to US House Speaker Nancy Pelosi&#39;s zigzag visit to Taiwan, including suspending China-US talks on climate change.

CATL, the world&#39;s largest maker of batteries used for electric cars, based in Fujian-China, has decided to hold aside the plan to announce a North American plant in Mexico or the US to supply Tesla and Ford as Pelosi&#39;s visit to Taipei has worsened the geopolitical tension between China and the US, Bloomberg<a href="https://www.bloomberg.com/news/articles/2022-08-02/pelosi-trip-spurs-china-battery-giant-to-pause-plant-unveiling"> </a><a href="https://www.bloomberg.com/news/articles/2022-08-02/pelosi-trip-spurs-china-battery-giant-to-pause-plant-unveiling">reported</a> citing people familiar with the matter. According to informed sources, CATL now plans to wait till September or October to announce the plan. In May, Reuters<a href="https://www.reuters.com/technology/exclusive-catl-planning-ev-battery-production-united-states-vetting-sites-2022-05-06/"> </a><a href="https://www.reuters.com/technology/exclusive-catl-planning-ev-battery-production-united-states-vetting-sites-2022-05-06/">reported</a> that the battery maker was considering South Carolina and Kentucky, among others, as its US production site.

Meanwhile, China and the US are both making progress towards tackling the climate crisis. The US Senate has passed Democrats&rsquo; economic package by a narrow margin of 51 to 50, the Financial Times <a href="https://www.ft.com/content/4d1e86e0-0254-4144-b784-88d963b310d5">reported</a> yesterday. The bill includes a series of measures to limit global warming that could bring a combined USD 369bn of funding for climate and clean energy programmes.

After a rally of Chinese provinces have unveiled plans to tackle climate change in the years from 2021 to 2025 (14th five-year plan period) since the beginning of this year, Shanghai Securities Journal, one of China&rsquo;s national newspapers, <a href="http://www.xinhuanet.com/finance/2022-08/08/c_1128897314.htm">reported</a> that a national-level climate change strategy for the five years is soon to be released.

&nbsp;

Guangzhou aims to be a global hub for futures trading - Last week, the Guangdong Financial Supervisory Authority unveiled a plan to enhance the market infrastructure for futures trading. As part of the strategy, the province&rsquo;s centre of future trading, Guangzhou Futures Exchange (GFE) will expand its product portfolio to list the futures of emission allowances, electricity, commodity indices, silicon wafers, and lithium. The GFE, in which the Hong Kong Exchange (HKEX) <a href="https://www.hkex.com.hk/News/News-Release/2021/2102052news?sc_lang=en">has a 7% stake</a>, will also strengthen its ties with the HKEX and Shenzhen Stock Exchange.

A well-functioning trading system matters with the unprecedented shortage of key materials needed for the manufacturing of electric cars. Not only the chip supply is heavily squeezed. According to the Financial Times <a href="https://www.ft.com/content/7ca99f9f-3b67-489a-a83c-477b6b12764e">report</a> yesterday, Kent Masters, chief executive of Albemarle, one of the largest lithium producers, said the lithium market will stay&nbsp;tight for seven to eight years.

&nbsp;

The implementation of the EU Taxonomy comes in fits and starts - With EUR 6.4bn (USD 6.5bn) in AUM and entirely invested in impact, Triodos Investment Management has recently <a href="https://www.triodos-im.com/articles/2022/current-implementation-of-eu-taxonomy-leads-to-distorted-picture?utm_campaign=5eccd015a1ea390001473d0a&amp;utm_content=62e952ac090e51000136a2f7&amp;utm_medium=smarpshare&amp;utm_source=linkedin">shared</a> its opinions from its Hadewych Kuiper, managing director on the European sustainable fund landscape. Kuiper said that the current requirement for the EU Taxonomy is not complete and includes non-sustainable activities, thus it is not able to reflect the actual sustainability profile of a fund. On top of that, the implementation of the EU Taxonomy &ldquo;comes in fits and starts&rdquo;, which can lead to &ldquo;counterproductive effects&rdquo;. Nikkie Pelzer, Impact Manager at the investor also mentioned the significant additional reporting efforts required of sustainable funds (Article 8 or 9 under the EU sustainable finance disclosure requirements). &ldquo;This explains why you now even see sustainable funds opting for article 6 (general funds)&rdquo;.

It is not a good time for sustainable funds in Asia either. <a href="https://www.ft.com/content/f8d3c001-682c-4e8d-bc38-99f5afe95dd3">According to</a> Ignites Asia, sustainable funds in Mainland China saw net outflows of USD 1.4bn in 22Q2, while Taiwan and Hong Kong respectively recorded USD 911m and USD 129m of inflows, <a href="https://www.morningstar.com/lp/global-esg-flows">according to</a> MorningStar. South Korea, India, and Indonesia also saw net outflows.

Sustainable funds in the United States shrank&nbsp; for the first time in five years with net outflows of USD 1.6bn last quarter <a href="https://www.morningstar.com/articles/1104758/us-sustainable-funds-see-outflows-for-the-first-time-in-five-years">out of fears of recession, inflation, rate hikes, and energy crisis</a>.

&nbsp;

Connecting workplace: StanChart has ex-Googler to manage sustainability matters - International banking institution Standard Chartered has appointed<a href="https://www.linkedin.com/in/kconstabile/"> </a><a href="https://www.linkedin.com/in/kconstabile/">Kerry Constabile</a> as the Managing Director, Net Zero and Sustainability, to lead the two teams, the bank<a href="https://www.sc.com/en/media/press-release/weve-hired-kerry-constabile-to-lead-net-zero-and-sustainability-strategy/"> </a><a href="https://www.sc.com/en/media/press-release/weve-hired-kerry-constabile-to-lead-net-zero-and-sustainability-strategy/">announced</a> on August 5. Constabile joins Standard Chartered after two years at Google as Lead for Sustainability Strategy and Engagement and 11 years as an UN climate officer prior to Google. Eco-Business<a href="https://www.eco-business.com/news/john-swire-sons-appoints-new-sustainability-head/?sw-login=true"> </a><a href="https://www.eco-business.com/news/john-swire-sons-appoints-new-sustainability-head/?sw-login=true">reported</a> on August 3 that John Swire has appointed <a href="https://www.linkedin.com/in/markharper76/?originalSubdomain=hk">Mark Harper</a> to be its new &quot;Group Head of Sustainability&quot;, based in Hong Kong, following his over six years in the conglomerate as Group Sustainable Development Manager. His predecessor Dr. Mark Watson has left the group after roughly 14 years in the group and its affiliate Cathay Pacific Airways with his next role being unclear at the moment.

&nbsp;

&nbsp;

<h6 class="editor-title6" style="margin-left:0cm; margin-right:0cm">References</h6>

<h6 class="editor-title6" style="margin-left:0cm; margin-right:0cm">[1] 中国政府网 - 工业和信息化部 国家发展改革委 生态环境部关于印发工业领域碳达峰实施方案的通知</h6>

<h6 class="editor-title6" style="margin-left:0cm; margin-right:0cm">[2] Monetary Authority of Singapore - Singapore Prices S$2.4 billion 50-year Inaugural Sovereign Green Bond; Public Offer now Open for Individual Investors</h6>

<h6 class="editor-title6" style="margin-left:0cm; margin-right:0cm">[3] The Ministry of Foreign Affairs -&nbsp;The Ministry of Foreign Affairs Announces Countermeasures in Response to Nancy Pelosi&rsquo;s Visit to Taiwan</h6>

<h6 class="editor-title6" style="margin-left:0cm; margin-right:0cm">[4] Bloomberg -&nbsp;Pelosi&rsquo;s Taiwan Trip Spurs Chinese Battery Giant to Pause Plant Debut</h6>

<h6 class="editor-title6" style="margin-left:0cm; margin-right:0cm">[5] Reuters - EXCLUSIVE CATL planning EV battery production in United States, vetting sites</h6>

<h6 class="editor-title6" style="margin-left:0cm; margin-right:0cm">[6] FT - US Senate passes Joe Biden&rsquo;s flagship economic package</h6>

<h6 class="editor-title6" style="margin-left:0cm; margin-right:0cm">[7] 上海证券报 - 多地出台&ldquo;十四五&rdquo;应对气候变化规划</h6>

<h6 class="editor-title6" style="margin-left:0cm; margin-right:0cm">[8] 广东省地方金融监管局 - 关于印发《关于完善期现货联动市场体系 推动实体经济高质量发展实施方案》的通知</h6>

<h6 class="editor-title6" style="margin-left:0cm; margin-right:0cm">[9] HKEX - HKEX INVESTS IN GUANGZHOU FUTURES EXCHANGE</h6>

<h6 class="editor-title6" style="margin-left:0cm; margin-right:0cm">[10] FT - Carmakers face fierce battle for lithium until 2030, warns top producer</h6>

<h6 class="editor-title6" style="margin-left:0cm; margin-right:0cm">[11] Triodos Investment Management - Current implementation of EU Taxonomy leads to distorted picture</h6>

<h6 class="editor-title6" style="margin-left:0cm; margin-right:0cm">[12] Ignites Asia - China ESG funds bleed $1.4bn in Q2 as Asian growth slows sharply</h6>

<h6 class="editor-title6" style="margin-left:0cm; margin-right:0cm">[13] MorningStar - Global Sustainable Fund Flows Report</h6>

<h6 class="editor-title6" style="margin-left:0cm; margin-right:0cm">[14] MorningStar - U.S. Sustainable Funds See Outflows for the First Time in Five Years</h6>

<h6 class="editor-title6" style="margin-left:0cm; margin-right:0cm">[15] Standard Chartered - We&rsquo;ve hired Kerry Constabile to lead net zero and sustainability strategy</h6>

<h6 class="editor-title6" style="margin-left:0cm; margin-right:0cm">[16] Eco-Business - John Swire &amp; Sons appoints new sustainability head</h6>

https://resources.miotech.com/static/landing-page/system/attachments/articles/1660026872150_Green Capital Weekly 8 Aug.pdf

A week of drama as the China's eight countermeasures to protest House Speaker Nancy Pelosi's Taiwan visit included the suspension of China-US talks on climate change.

Green Capital Weekly August 8 | China-US climate talk halted following Pelosi's visit to Taiwan; Singapore launches 50-year green bond

Green Capital Weekly August 1 | Tug of war between ESG and business demands; Singapore's MAS requires disclosure from ESG fund managers

Green Capital Weekly 25 July 2022 | Russia resumes gas supplies to Europe through Nord Stream 1; Fifth Wall raises USD 500m for real estate decarbonisation venture fund

<h2 dir="ltr"> 
Please introduce Vigeo Eiris and how the company is promoting responsible and sustainable investment in the finance industry.</h2>

 
<a href="http://www.vigeo-eiris.com/">Vigeo Eiris</a> is an international provider of environmental, social and governance (ESG) research and services for asset managers, investors and for listed and unlisted issuers. We undertake risk assessments and evaluate the level of integration of sustainability factors within organisations&rsquo; strategies and operations. 
 
Vigeo Eiris offers a wide and exclusive suite of research and ratings products and services on sustainability risks and performance. Our products support investors&rsquo; decision-making through a sustainable and ethical investment approach (including ratings, databases, sector analyses, portfolio analyses, structured products, indices and more). Vigeo Eiris obtained ISO 9001: 2015 certification for its processes relating to methodology, rating, sale and delivery of its data to all types of investors. 
 
With a team of more than 240 experts of 28 different nationalities, Vigeo Eiris is present in Paris, London, Brussels, Casablanca, Hong Kong, Milan, Montreal, New York, Rabat, Santiago and Stockholm. The Vigeo Eiris Global Network, comprising 4 exclusive research partners, is present in Brazil, Germany, Israel and Japan.

&nbsp;

<h2 dir="ltr">We&rsquo;re currently seeing pressure for firms to integrate ESG strategies into investment decisions, why the sudden push/trend? 
&nbsp;</h2>

Firms are facing growing expectations from their stakeholders to account for their willingness and capacity to act responsibly, to reduce their negative externality and to contribute positively to sustainability. COP 21 was a wake-up call for the world in 2015. The finance industry reacted swiftly and started to initiate a transition into a more sustainable and green economy, particularly in the face of the current climate emergency. At this stage, most of the world&#39;s leading corporations declare having embraced the 17 Sustainable Development Goals, to which virtually all UN countries have committed.&nbsp;

The recent acceleration to enshrine ESG considerations into investment decisions stems from investors&rsquo; fiduciary duty (e.g. UNEPFI). In addition, there are growing initiatives to demonstrate ESG considerations at international and national levels (PRI, Global Compact, SDGs, Montreal Carbon Pledge, French Law for Energy Transition&hellip;) and more and more concern about the threats of short-termism on company performance, investment returns and market behaviour.

Moreover, it is now recognized that ESG risks can have a meaningful financial impact: it is recognised that strong ESG performance can reduce capital costs as well as enhancing an assets&rsquo; value and improving reputation, human capital, operational efficiency and legal security.

Going forward, ESG analysis will have an ever-greater impact on investment decisions, while being a key driver of the transition to a sustainable economy. 
&nbsp;

<h2 dir="ltr">What do you think of the implementation rates in Asia from your perspective? 
&nbsp;</h2>

Asian investors have started more recently to integrate ESG factors into investment decisions, but most countries are now moving fast in this direction via regulation requirements and at the request of large asset owners to select ESG-driven asset managers. Focus in Asia and especially China and HK are more on environmental issues than Social or Governance. 
&nbsp;

<h2 dir="ltr">We see policy taking the lead in supporting ESG initiatives, in your opinion, how important is it that asset management firms follow suit?</h2>

 
All stakeholders have a role to play to be able to achieve ambitious climate targets.

Regulators have a role to play in encouraging companies to integrate ESG metrics more systematically into annual accounting and reporting documents, with the same principles of standardisation, oversight, and auditing which apply to purely financial metrics.

Investors have a role to play by requiring companies to demonstrate clear and transparent sustainable strategies and reporting to be able to assess a company&rsquo;s level of ESG engagement. 
&nbsp;

<h2 dir="ltr">How does Vigeo Eiris help financial institutions achieve their ESG goals?</h2>

 
Vigeo Eiris have a wide range of products to help investors, from assessing their ESG strategy to providing data for ESG integration. We also provide tools so investors can define and implement their own customised strategies and report on the impact of their portfolios. Integration of ESG into passive management is increasingly common, with a growing number of thematic or sectorial indices that are based on ESG data from providers such as Vigeo Eiris. We provide a very creative range of indices that gather the most promising issuers on hundreds of ESG topics and indicators. 
&nbsp;

<h2 dir="ltr">Vigeo Eiris also has Controversy database, could you please tell me more?</h2>

 
Vigeo Eiris&rsquo;s controversy database provides a documented and norms-based opinion in real time on companies facing allegations in order to allow financial institutions and investors to manage their risk exposure and take appropriate investment decisions.

The controversy database is continuously screening and qualifying controversies through three factors: severity, frequency and reactiveness of the company.

Our opinion assesses a company&rsquo;s capacity to manage controversies. It could be lowered when the company faces controversies relating to fundamental issues, such as a considerably adverse impact on the interests of a given company and its stakeholders, without the company permanently being the focus of reactive, reparative or remediative measures. The more the company is exposed to a significant number of controversies, the more our opinion will be altered. 
&nbsp;

<h2 dir="ltr">What are the current challenges facing financial institutions from adopting substantial ESG practices as opposed to something to check off the list.</h2>

 
The greatest challenge is their capacity to gather skills and improve their methods so they&rsquo;re aligned with mainstream ESG understanding and can incorporate adequate measurements in their models. 
&nbsp;

<h2 dir="ltr">Your thoughts on ESG Data, its value and its reliability?</h2>

 
Vigeo Eiris has developed a strong methodology with 17 years of history which is thorough, reliable and impartial. 
 
Our methodology is consistent, and is supervised by an independent scientific committee that supports back-testing and trend management. The ratings are consistent and comparable, and we try to have a high level of interaction with rated companies to access the most relevant information. 
&nbsp;

<h2 dir="ltr">What are the main ESG trends that Vigeo Eiris is seeing?</h2>

 
One of the main trends we&rsquo;re seeing is a need to systematically explore sustainability stakes, assess their related risks and opportunities, and explain the weight devoted to ESG factors in investment decisions. 
&nbsp;

<h2 dir="ltr">What is Vigeo Eiris currently excited about?</h2>

 
Vigeo Eiris is continuously developing new products to collaborate with investors and help them integrate ESG factors in line with their fiduciary duty.

Our products range from a historical negative screening tool to positive impact solutions and services. 
 
A recent development is Sustainable Goods &amp; Services (SGS). SGS research assesses the extent of corporate involvement in products and services that contribute to the achievement of the UN&rsquo;s Sustainable Development Goals (SDGs). It addresses the lack of data on SDG performance and makes it easy for investors to understand. We provide a positive screening to identify business activities devoted to sustainable solutions, complementary to the traditional ESG approach. 
&nbsp;

<h2 dir="ltr">Will not being sustainable cost a firm going into the future?</h2>

 
Not being sustainable is a direct threat for a given corporation, notably in terms of its brand, attractiveness, capacity to innovate, economic performance, and even existence.

&nbsp;

 
 
Juliette Macresy took charge of Vigeo Eiris Hong Kong office in September 2017, becoming Head of Greater China and South East Asian markets. She is already working with banks, investors, corporates and international organisations in the region on Green &amp; Sustainable bonds and its derivatives products while marketing Vigeo Eiris ESG research.

In this article, we speak to Juliette Macresy, Head of Vigeo Eiris’ Greater China and South East Asian markets, on the growing trend of sustainable investing in Asia and why "not being sustainable is a direct threat for a given corporation".

Why ESG Matters When it Comes to Investing

<h2 dir="ltr">We&rsquo;re currently seeing pressure for financial institutions to integrate ESG strategies into investment decisions, why the sudden push/trend?</h2>

&nbsp;

ESG, or Sustainable investing (&quot;SI&quot;), has developed into a financial megatrend in recent years. Originally followed primarily by professional, institutional investors, it sees now wide adoption from private investors, especially in Europe and the USA, with a significantly growing number of Asian investors adopting SI approaches.

&nbsp;

At UBS, we have made the decision early on, to help shape the sustainable investing landscape and be at the forefront of bringing exciting investment solutions to client which look beyond the pure return maximization but take into account how these returns are being generated.

&nbsp;

We&rsquo;re using our expertise, knowledge and connections to drive change that matters. Innovative finance can be good for society, good for the environment, and give good returns. In fact,we think they all go hand in hand. Across our private and institutional businesses, we manage USD 313bn in dedicated sustainable investing strategies.

&nbsp;

<h2 dir="ltr">What does this say about the new generation of investors? Are they driven by performance or principals?</h2>

&nbsp;

Our clients have various motivations to follow a sustainable investing approach. But some of the key triggers we see in liquid strategies are that they understand that integrating ESG as a factor for better informed investment decisions which can lead to superior investment outcomes over time as well as a trend to &quot;Investing for the next generation&quot; by building an investment portfolio which helps to leave the planet intact for their next generation.

&nbsp;

In private markets impact investing strategies, we clearly also see clients investing who are keen to build a long-term portfolio which allows them to generate positive impact on society through their investments, looking beyond just the targeted market-rate returns.

&nbsp;

Furthermore, many of the younger generation show a particular affinity for incorporating sustainability criteria in their consumption and investment behavior. They increasingly seek innovative means by which they can tackle problems of social inequality, as technology and extreme connectivity throw light on issues across the globe to more people. We see this reflected in strong demand for our longer term impact investing solutions which aim to create positive social and environmental impact as well as significantly increasing allocations to invest into leading innovators and companies contributing to a low carbon economy and a more sustainable future.

&nbsp;

<h2 dir="ltr">What do you think of the SI adoption rates in Asia?</h2>

&nbsp;

Awareness and adoption of sustainable investing has grown significantly among our clients in recent years.

&nbsp;

Based on our recent investor survey &quot;Investor Watch &ndash; Return on Values&quot;, for which we interviewed 5,500 investors across ten countries/regions, including Hong Kong &amp; China, we see strong buy-in for sustainable investing.

&nbsp;

In Hong Kong, 41% of investors expect sustainable investments to become the new standard in 10 years. In China, 74% of investors make that statement. At the same time, 50% of Hong Kong investors believe sustainable investments would deliver better returns than traditional investments.

&nbsp;

<h2 dir="ltr">We see policy taking the lead in supporting ESG initiatives, in your opinion, how important is it that financial institutions follow suit?</h2>

&nbsp;

We are on a journey to educating our clients and moving the industry towards a sustainable one. We are confident that with better understanding of sustainable investing and more available offerings, Sustainable Investing will become the mainstream approach for investors in the years to come.

&nbsp;

<h2 dir="ltr">What ESG strategies has UBS adopted?</h2>

&nbsp;

Options for SI investments have expanded rapidly in recent years.

&nbsp;

UBS has been at the forefront of bringing sustainable investment solutions to our clients here in the region. We currently offer our clients access to more than two dozen active and passive funds with sustainable investing focus, a universe which is growing constantly.

&nbsp;

Most notable are our mandate and fund solutions based on our unique 100% sustainable Strategic Asset Allocation which we introduced in April last year. It is the first time that private clients can access a 100% sustainable cross-asset portfolio, implementing ESG across all liquid equities and bonds strategies, allowing them to invest in a portfolio based on their personal risk and return expectations. The solutions contain innovative content such as ESG engagement strategies or World Bank bonds and Green Bonds with multiple risk profiles to choose from, yet aim to deliver full market-rate returns for investors.

&nbsp;

Another area in which we have seen strong client pick-up is Impact Investing. In 2017, UBS has committed to allocate USD 5bn into impact investments in support of addressing the UN Sustainable Development Goals.

&nbsp;

<h2 dir="ltr">&nbsp;What is UBS is excited about when it comes to SI?</h2>

&nbsp;

I am really excited about our very comprehensive services we can offer our clients on sustainability. Let me specifically pick two which I am really excited about:

With the launch of our innovative 100% sustainable investing portfolios last year, we were able to change the way many of our investors in the region think about their investments and truly work on raising awareness of how personal values and competitive financial returns are not mutually exclusive. In fact, we think they go hand in hand. We have raised over USD 600 million in APAC, and globally over USD 6 billion in this short period of time, showing the success of this offering in delivering performance and meeting clients&rsquo; values.

&nbsp;

Looking at longer term investments &ndash; impact investing &ndash; we are continuously bringing exciting opportunities to our clients. For example, we have raised USD 470m for our UBS Oncology Impact Fund, an early stage private equity fund focusing on investments in the development of cancer therapeutics in order to achieve attractive financial returns, while making a positive global impact helping to extend and improve the lives cancer patients, focusing on curing certain forms of cancer. USD 275m was committed by our investors here in APAC.

&nbsp;

<h2 dir="ltr">Will not having an ESG approach cost a financial institution going into the future?</h2>

&nbsp;

I absolutely believe that ESG will become a core component of the investment process. There is strong evidence today, that SI strategies deliver equal to better investment performance over time compared to traditional investment approaches.

&nbsp;

Let me refer to a recent large-scale institutional investor survey by Responsible Investor and UBS. 48% of respondents who are already &#39;doing ESG&#39; are doing so because they expect a positive impact on financial performance, and a further 48% of &#39;adopters&#39; are considering the integration of ESG into the investment process for the same reason.

&nbsp;

Additionally, and interesting to note, a majority of European institutional asset owner respondents predict that key environmental factors (climate crisis, biodiversity loss) will be more material to their investments in the next five years than financial factors.&nbsp;&nbsp;

&nbsp;

&nbsp;

 
Mario Knoepfel, Head Sustainable &amp; Impact Investing Advisory, Investment Platforms and Solutions, Asia Pacific, UBS Wealth Management. 
&nbsp;

Get a free deep dive into whether the world's asset owners are thinking long-term, sustainable finance.

​​​​​​​Download the "Investor Watch – Return on Values" Survey by Responsible Investor and UBS.

http://miotech-landingpage-images.oss-cn-shanghai.aliyuncs.com/files/1565578041344_Responsible-investor-ubs-esg-do-you-or-dont-you.pdf

In this article, MioTech speaks with Mario Knoepfel, Head Sustainable & Impact Investing Advisory, Investment Platforms and Solutions, Asia Pacific at UBS Wealth Management on the growing trend of sustainable investing in Asia and his belief that it can bring equal to better investment performance over time.

UBS: Sustainable Investing to Become Core Investing Component

<blockquote>
1. What is a data culture?
</blockquote>

A data culture is shaping an organization to prioritize data an important variable in decision making. This requires training, education, and perhaps most importantly, building relationships with each business unit to determine which metrics will drive their decision making.

<blockquote>
2. Why is it increasingly important to build a strong data culture within a company?
</blockquote>

As the South China Morning Post goes full speed ahead in its digital transformation, one of the key challenges was to accelerate operational efficiency. While the data team has been built from the ground up in a little over 18 months, one of its core reasons for existence is to help every part of the business get better at one they do. We&rsquo;ve established a culture of OKRs, Objective and Key Results which empowers each department and team to align with company level goals and have specific, measurable, actionable, relevant, and time-bound (SMART) goals.

A data-driven culture helps everyone within the company to have a consistent pulse on how they&rsquo;re tracking to these individual, team, department, and company goals. My team checks in monthly on each of their quarterly goals which build accountability and transparency. If we&rsquo;re falling behind, people are better able to ask for help or collaborate with other individuals or teams on shared interests or initiatives.

<blockquote>
3. What specific benefits/examples can you cite where data has significantly added value, editorially/operationally etc. ? What pain points did having data solve?
</blockquote>

In order to build automated digital metrics reporting and analysis, the team designed, constructed and implemented a centralized data warehouse and ETL processes. This enabled the aggregation of data from over 40 disparate data platforms. We also trained non-technical team members to use SQL and other data processing tools to automate workflows and report generation processes freeing up over 75% of one headcount. This, in turn, enabled a recalibrated focus on developing insights, recommendations, and action items, eradicating time-consuming and tedious report creation.

In order to ensure this transformative process was being leveraged across the organization, we scaled cross-functional business intelligence. Moreover, the team also consolidated redundant tools and platforms, resulting in the elimination of duplicated manpower, resources, and operational costs.

<blockquote>
4. What active steps do you think is important for a company to take in order to build a good data culture? (education etc)
</blockquote>

Perhaps the most critical component of driving business process efficiency is training, educating and evangelizing why data matters. The story-telling process requires the cross-pollination of data tools and culture to shift decision making from intuition to data-driven. Weekly online editorial meetings, slack, and email alerts for under-performing / over-performing content, daily insight emails summarizing wins/losses, and dynamic TV dashboards all contribute to driving this change. This helps to form rhythms encouraging data reliance on real-time reporting. Key performance indicators (KPIs) enable teams to better track progress and have increased accountability for targets; dozens of training workshops were held to ramp up staff on tools, features and tie data relevance into each individual&#39;s&rsquo; day-to-day. As the organization continues to transform, we&rsquo;re encouraged albeit kept quite busy by the 10x increase of data requests over the past 3 months.

With better tools and more responsive ad-hoc analysis via Tableau, BigQuery and Airflow, we&rsquo;re building a stronger data culture at SCMP, empowering business leaders and managers to access real-time data and make more powerful data-informed decisions.

We believe that creating a transformative culture starts with investing in our people. The impact was particularly apparent in our data-driven transformation, democratizing data via various tools within the organization, empowering our teams to make smarter decisions. Measuring the impact of those choices gives us the agility to adapt quickly when necessary. With the advent of these initiatives around data storage, centralization, and automation, we&#39;ve seen massive gains in efficiency, growth in our core metrics (traffic, revenue) and a rising tide of excitement, morale and engagement at the South China Morning Post.

<blockquote>
5. What barriers did you face building a data culture? (Mindset? Trust? Hiring?) How did you overcome it?
</blockquote>

This is very similar to question 4 and I think we answered most of it there already.

<blockquote>
6. Should data drive decisions? What&#39;s the right balance?
</blockquote>

While data is not usually the sole variable in driving a decision, it should play a role in most decisions. I prefer to call this data informed decisions. Throughout the course of the past two years, we&rsquo;ve seen an increasing trend in business leaders asking for and considering the data piece before jumping to conclusions or making decisions which is a big step from the &ldquo;gut-feeling&rdquo; or &ldquo;intuitive&rdquo; driven decisions that were more the norm previously.

A good example of this is A/B testing headlines in the newsroom. Sometimes editors have differing opinions on which headline works and which doesn&rsquo;t, the best way is to put it in front of our users and see which one they click on the most, then regardless of which one we might like, we know what works and what doesn&rsquo;t. The US-China trade war content has been a hot topic as of late and several headlines were written in the British style with Trade Row (Row as in a fight or brawl). However, since our audience is largely coming from the US now, Trade War picked up much more traction as Americans generally read &ldquo;row&rdquo; as &ldquo;row, row, row your boat&rdquo; not as &ldquo;fight&rdquo;.

<blockquote>
7. How readily available should this data be to employees? How do you ensure that the data is actionable?
</blockquote>

In an ideal data world, each and every employee should have access to the data they need to do their job. Naturally, security protocols need to be in place to ensure that individuals don&rsquo;t have access to data that may be sensitive (e.g. PII - personally identifiable information) or data they don&rsquo;t need access to because it&rsquo;s irrelevant to their job.

Actions are typically tied to decisions. Spending time with the teams to understand their workflows, projects, and initiatives enable us to put metrics and KPIs in front of them that help them to make decisions and therefore are actionable. It&rsquo;s also an iterative process, if something is no longer useful or we can make it better, we continuously seek to improve how our customers are engaging with the data.

<blockquote>
8. What would be in your opinion, the best data culture?
</blockquote>

In many ways, all of the things we just talked about. Aspirationally, an environment where everyone has the knowledge and ability to access to the data they need. Each person across the company should understand the value of data to their team as well as their individual work and be able to have self-serve access to actionable data to execute on their day to day work. Data tools should be largely automated and the data team&rsquo;s focus should primarily be focused on generating insights, enhancing recommendations, and building tools that employ AI, ML, and algorithms that help drive the business onwards and upwards.

In this article, MioTech speaks with Korey Lee, Head of Data at SCMP on the effective ways on building a strong data culture from scratch.

MioTalk X Korey Lee: Building a Culture Around Data

Head of Data, South China Morning Post

<blockquote>
Please tell me what your &ldquo;Biased Bots&rdquo; research paper was about.
</blockquote>

Fundamentally, I want to understand cognition and the evolution of cognition. Since our paper came out, it&#39;s been evident that people are surprised that machines can be biased. They assume machines are necessarily neutral and objective, which is in some sense true -- in the sense that there is no machine perspective or ethics. &nbsp;But to the extent an artefact is an element of our culture, it will always reflect our bias.

<img src="http://miotech-landingpage-images.oss-cn-shanghai.aliyuncs.com/images/1544438516463_1543225429797_image4.png/th1000" style="height:auto; max-width:100%; width:auto" />

Source: Dilbert

&nbsp;

I saw that implicit bias could be something that was a part of culture and that was fascinating to me. Culture can push you into a place, a way of thinking.

People don&#39;t usually think that implicit biases are a part of what a word means or how we use words, but our research shows they are. This is hugely important, because it tells us all kinds of things about how we use language, how we learn prejudice, how we learn language, how we evolved language. All understanding is being created and communicated this way and I don&rsquo;t think a lot of other people see how incredibly important it is. This gives us some important insight into why our brains work the way they do and what that means about how we should build AI.

<blockquote>
&quot;It&rsquo;s important that we understand what our machines are communicating through us, that the meaning comes from us.&quot;
</blockquote>

Our research paper sets out to show that applying machine learning to ordinary human language results in human-like semantic biases. It&rsquo;s important that we understand what our machines are communicating through us, that the meaning comes from us.

<blockquote>
This transference of inherent bias to AI technology, how does this occur?
</blockquote>

Computation is a physical process. It takes time, energy, and space. &nbsp;Therefore it is resource constrained. This is true whether you are talking about natural or artificial intelligence. From a computational perspective there&#39;s little difference between these. The reason AI is making so much progress right now is because we&#39;ve figured out how to transfer and represent what&#39;s already been computed by our culture or our biology into AI. A lot of people are saying this is showing that AI is prejudiced. No. This is showing we&rsquo;re prejudiced and that AI is learning that prejudice the same way. That&#39;s the first source of AI bias: unintentionally uploading the implicit human biases that pervade our culture.

&nbsp;

<blockquote>
The Implicit Association Test that you utilize for this research paper, what is this test?
</blockquote>

The test measures response times (in milliseconds) by humans when asked to pair word concepts displayed on a computer screen.

For example in a previous study, flower types, like &quot;rose&quot; and &quot;daisy,&quot; and insects like &quot;ant&quot; and &quot;moth.&quot; were to be paired with words with pleasant and unpleasant connotations, like &quot;caress&quot; and &quot;love,&quot; or &quot;filth&quot; and &quot;ugly.&quot; People were more quick to associate the flowers with pleasant words, and the insects with unpleasant terms.

To avoid controversy, we only replicated known biases that had been done by psychologists before, as measured by the Implicit Association Test. We utilized a purely statistical machine-learning model called &ldquo;word embedding&rdquo;, which is what computers are currently using to interpret speech and text, trained on a huge sample of internet content containing 840 billion words. The algorithm can showcase the co-occurrence statistics of words in, say, a 10-word window of text. Words that often appear in the same contexts (of other words) have a more similar meaning than those words that seldom do.

<img src="http://miotech-landingpage-images.oss-cn-shanghai.aliyuncs.com/images/1544438527919_1543225966867_image3.png/th1000" style="height:auto; max-width:100%; width:auto" />

Source: <a href="https://imgs.xkcd.com/comics/how_it_works.png">https://imgs.xkcd.com/comics/how_it_works.png</a>

&nbsp;

The team examined for example, words of profession like &ldquo;programmer, engineer, scientist&rdquo; and &ldquo;nurse, teacher, librarian&rdquo; alongside attribute words, such as men&rsquo;s or women&rsquo;s names to see if the common views humans consciously or unconsciously possess are also easily acquired by algorithms.

&nbsp;

<blockquote>
Could you give me an example of human bias that you found?
</blockquote>

Our machine learning experiment not only confirmed the word biases associated with flowers or bugs, but also found more troubling evidence of implicit biases related to gender and race.

The machine learning model found that women&rsquo;s names were more associated with arts and humanities vocations and with words like &ldquo;parents&rdquo; and &ldquo;wedding&rdquo;. On the other hand, men&rsquo;s names were linked closely with math and engineering professions and words like &ldquo;professional&rdquo; and &ldquo;salary&rdquo;.

<img src="http://miotech-landingpage-images.oss-cn-shanghai.aliyuncs.com/images/1544438517727_1543226132556_image2.png/th1000" style="height:auto; max-width:100%; width:auto" />

Source: Dilbert.com

&nbsp;

A previous experiment showed that CVs with European American names were 50% more likely to get offered an interview from a job application than CVs with African American names were, despite those CVs being otherwise identical.

And if you still don&rsquo;t believe that there is racism associated with people&rsquo;s names, we found out through our A.I. system that European American names are more likely to be associated with positive words like &ldquo;gift&rdquo; or &ldquo;happy&rdquo;, while unpleasant words were commonly attached to African American names.

This evidence reinforces existing social inequalities and prejudices that can be transferred to machines.

&nbsp;

<blockquote>
When being applied to the finance sector, what impacts do you foresee A.I. bias might have on finance industry?
</blockquote>

Compliance is an issue, for example what kind of customers you&rsquo;re picking. When using machine learning to assign credit scores, algorithms might rate an ethnic minority who needs a loan at a higher risk of default just because similar people have traditionally only been afforded unfavourable loan conditions. This could also be said for women who receive lower wages and less funding for new businesses as compared to men.

The main thing I worry about though&nbsp;is institutions not realising how important it is to document what they do and expose themselves to regulators and work with regulators.

&nbsp;

<blockquote>
What should we, as &ldquo;authors of robots&rdquo; moving forward do better?
</blockquote>

Many people are trying to make out that AI is now self-learning, or at least all programmed via machine learning. No algorithm spontaneously generates a software system or a robot. Quite a lot of the algorithms that affect people&#39;s lives are just macros someone programmed in a spreadsheet. AI is created by people deliberately. And don&rsquo;t forget you can get bias in A.I. because someone put it in there deliberately because they&rsquo;re out to be bad people.

<img src="http://miotech-landingpage-images.oss-cn-shanghai.aliyuncs.com/images/1544438529489_1543226335809_image1.png/th1000" style="height:auto; max-width:100%; width:auto" />

Source:Trader Feed ( <a href="http://bit.ly/2mn3u1M">http://bit.ly/2mn3u1M</a> )

&nbsp;

The way to deal with this is to insist on the right to explanation, on due process. &nbsp;All algorithms that affect people&#39;s lives should be subject to audit. If you don&rsquo;t have accountability for software, it is dangerous. We take for granted cooperation with government, engagement in policy, training in legal responsibilities and so forth. &nbsp;It&#39;s time our discipline matures and we accept what that means in terms of accountability.

<blockquote>
&rdquo;All algorithms that affect people&#39;s lives should be subject to audit.&ldquo;
</blockquote>

Once we saw the result, we understood why our research was important. This is why blue sky research is important. Our research paper helps communicate the true nature of AI and it proves that implicit biases are coming off current realities, off culture and into our technologies. What we can do with that, is now, we can explicitly say, that that&rsquo;s not the future we choose for ourselves. The implicit biases come for free; we have to make an effort to make the future better.

&nbsp;

To read full research paper, click <a href="https://www.researchgate.net/publication/306885285_Semantics_derived_automatically_from_language_corpora_necessarily_contain_human_biases">here</a>.&nbsp;

The views expressed above reflect those of the authors and are not necessarily the views of MioTech.

In this article, MioTech speaks with leading AI specialist, Joanna Bryson on how machines can reflect the biases that humans inherently possess and the detrimental impacts it can have on society.