As of June 2020, the percentage of A-share companies issuing ESG reports in mainland China was 27 per cent1. China’s ambition to reach peak carbon before 2030 and achieve carbon neutrality by 2060 will require companies to transform to lower carbon business models. ESG reporting, including making emissions data visible and comparable is a key ingredient in this transition.
China’s enterprises have a leading role to play in delivering environmentally friendly and socially responsible prospects both locally and globally. This drive to enhanced quality reporting can guide capital flows, help regulators make timely policy decisions and enable customers to make informed supply-chain management decisions. This report suggests that regulators and investors from mainland China and Hong Kong are the key drivers for corporate ESG reporting, whilst government policy goals are only likely to further increase its relevance.
The findings presented in this paper reflect discussions at three Forum-convened workshops held at the Forum’s China Business Roundtable, in collaboration with PwC and experts representing more than 30 businesses in China. This report, supported by Centre of Sustainable Finance, helps to outline how companies in China have been rapidly developing their understanding of ESG frameworks and have built capacity to capture and report their ESG performance. In addition, it assesses the landscape and main drivers for ESG reporting in China and highlights characterises that are important for stakeholders to recognise in order to facilitate this transition.
1 An Evolving Process: Analysis of China A-Share ESG Ratings 2020, SynTao Green Finance