Published June 2019
A new joint report by UNEP FI, PRI and SynTao Green Finance, launched in Shanghai on June 5, 2019, provides recommendations for China’s ESG disclosure framework, prepared by its financial regulators. This report is a follow-up from the Investor Duties and ESG Integration in China, and part of the Fiduciary Duty in the 21st programme recommendations for China.
These recommendations, supported by discussions with Chinese and international stakeholders, intend to inform the China Securities Regulatory Commission (CSRC), the China Institute of Finance and Capital Markets (CIFCM) and its domestic stock exchanges on the following questions:
- What are international investors’ expectations on China’s ESG disclosure framework?
- Are international ESG disclosure standards compatible with China’s corporate and investment landscape?
- What indicators should be part of China’s ESG disclosure framework?
To answer these questions, the research team has analysed investors’ needs regarding ESG data on Chinese domestic- listed companies and carried out a mapping exercise on existing disclosure practices in China and overseas.
Our research shows that both international and Chinese corporate ESG data disclosure practices lead to reporting based on a similar set of ESG indicators. However, the ESG data disclosed by companies is not standardised and not readily comparable across markets, industries and portfolios.
Our key recommendation is that the CSRC should introduce regulation, clarifying that ESG factors are financially material. Moreover, making it mandatory for all Chinese listed companies to disclose information on a standardised set of ESG indicators, could give the Chinese market long-term motivation for enhanced and high quality reporting on key ESG issues.
Download the report here.