A shares are heavy! The guidelines for the sustainable development of listed companies are here!

Mondo Finance Updated on 2024-02-09

Reporter Wu Xiaolu.

The guidelines for the disclosure of sustainability reports of A-share listed companies are here!

On February 8, the Shanghai and Shenzhen North Stock Exchanges solicited opinions on the guidelines for the disclosure of sustainable development reports of listed companies, further promoting the improvement of the quality of listed companies, guiding listed companies to practice the concept of sustainable development, standardizing the disclosure of sustainable development-related information, and helping to build a standardized and unified sustainable development rule system for listed companies with Chinese characteristics, international influence, and standardization.

Quick Facts:

1.Mandatory disclosure is combined with voluntary disclosure. During the reporting period, companies that continue to be included in the sample indices of SSE 180, STAR 50, SZSE 100 and ChiNext Index, as well as companies listed at home and abroad, should disclose their Sustainability Reports, and encourage other listed companies to do so on a voluntary basis.

2.Encourage companies on the Beijing Stock Exchange to "do what they can".

3.Establish a sustainability information disclosure framework. If the sustainability issues to be disclosed are both financially important and impact-significant, the listed company should analyze and disclose the issues to be disclosed around the four core contents of governance, strategy, impact, risk and opportunity management, and indicators and targets.

4.Strengthen the disclosure requirements related to carbon emissions.

5.Clarify environmental, social, and corporate governance disclosure issues.

6.Transitional arrangements and mitigation measures are in place. Listed companies with mandatory disclosure should publish their 2025 Sustainability Report by April 30, 2026. In the first reporting period, listed companies are not required to disclose the year-on-year changes in relevant indicators, and can make qualitative disclosures and explain the reasons for indicators that are difficult to disclose quantitatively.

7.In the 2025 and 2026 reporting periods, if it is difficult for the disclosing entity to quantitatively disclose the impact of sustainability-related risks and opportunities on the current financial position, it may only make qualitative disclosures.

Adhere to the three major ideas

On February 8, the Shanghai and Shenzhen North Stock Exchanges respectively solicited opinions from the public on the "Self-Regulatory Guidelines for Listed Companies on the Shanghai ** Stock Exchange No. 14 - Sustainability Report (Trial) (Consultation Draft)", the Self-Regulatory Guidelines for Listed Companies on the Shenzhen ** Stock Exchange No. 17 - Sustainability Report (Trial) (Consultation Draft), and the Beijing ** Stock Exchange Continuous Supervision Guidelines for Listed Companies No. 11 - Sustainable Development Report (Trial) (Consultation Draft) (hereinafter referred to as the "Guidelines").

It is reported that in the process of drafting the "Guidelines", three major ideas were adhered to:

First, insist on seeking truth from facts. Fully consider the development stage and disclosure ability of listed companies, and achieve cost and benefit matching through the combination of mandatory and voluntary disclosure, qualitative and quantitative disclosure, and the establishment of transition periods and mitigation measures.

The second is to adhere to systematic thinking. Assist listed companies to build a sound sustainability-related governance mechanism, clarify the disclosure framework built with corporate governance, strategy, impact, risk and opportunity management, indicators and objectives as the core elements, and promote high-quality information disclosure with better internal governance and specific actions.

The third is to embody Chinese characteristics. Based on the actual situation of China's capital market, a series of specific topics reflecting Chinese characteristics, such as rural revitalization and innovation-driven, are set up to fully reflect China's characteristics, advantages and priorities in the field of sustainable development.

Mandatory disclosure is combined with voluntary disclosure.

It is reported that on the basis of the content of the current rules, the Guidelines actively absorb beneficial experience and broad consensus at home and abroad, and further enrich and improve the disclosure requirements for sustainable development information. The guidelines consist of six chapters, with Chapter 1 (General Provisions) and Chapter 2 (Sustainability Information Disclosure Framework) being general requirements, Chapters 3, 4 and 5 respectively providing specific disclosure requirements for environmental, social and corporate governance dimensions, and Chapter 6 being supplementary provisions.

There are five main contents:The first is the combination of mandatory disclosure and voluntary disclosure. In terms of disclosure entities, companies that continue to be included in the sample of SSE 180, STAR 50, SZSE 100 and ChiNext indices during the reporting period, as well as companies listed at home and abroad, should disclose the Sustainability Report, and encourage other listed companies to do so voluntarily. In addition, taking into account the characteristics of the development stage of innovative small and medium-sized enterprises on the Beijing Stock Exchange, the rules do not make mandatory disclosure provisions for sustainable development reports, and encourage companies to "do what they can".

According to the reporter, the number of listed companies that are required to disclose the "Sustainable Development Report" is 454, accounting for 8 of the number of A-share companies5%。

The second is to establish a sustainable development information disclosure framework. Listed companies should analyze and disclose the topics to be disclosed around the four core contents of governance, strategy, impact, risk and opportunity management, indicators and targets, so that investors and stakeholders can fully understand the actions taken by listed companies to respond to and manage sustainability-related impacts, risks and opportunities.

The third is to strengthen the disclosure requirements related to carbon emissions. In addition to disclosing the governance and strategies related to climate change in accordance with the four core contents, listed companies should also further disclose matters such as climate adaptation, transformation plans, total greenhouse gas emissions, emission reduction measures, and opportunities related to carbon emissions.

Fourth, clarify the disclosure issues of environmental, social and corporate governance. The chapter on environmental information disclosure also sets up important topics such as ecosystems and biodiversity, and circular economy. The chapter on social information disclosure sets up a number of important topics such as rural revitalization, innovation-driven, science and technology ethics, first-chain security, and equal treatment of small and medium-sized enterprises. The chapter on corporate governance information disclosure focuses on corporate governance structure, internal systems, control measures and procedures, and sets up anti-bribery, anti-unfair competition issues.

Fifth, provide transitional arrangements and mitigation measures. Listed companies with mandatory disclosure of Sustainability Reports should publish their 2025 Sustainability Reports by 30 April 2026. In the first reporting period, listed companies are not required to disclose the year-on-year changes in relevant indicators, and can make qualitative disclosures and explain the reasons for indicators that are difficult to disclose quantitatively. In the 2025 and 2026 reporting periods, if it is difficult for the disclosing entity to quantitatively disclose the impact of sustainability-related risks and opportunities on the current financial position, it may only make qualitative disclosures.

In 2022, more than one-third of A-share companies disclosed ESG-related reports

In November 2022, the China Securities Regulatory Commission issued the "Three-Year Action Plan for Promoting the Quality of Listed Companies (2022 2025)", which requires the establishment and improvement of the sustainable development information disclosure system, the formulation of a sustainable development information disclosure rule system for listed companies based on China's reality, in line with international trends, and with Chinese characteristics, and a clear implementation path, and a plan to gradually promote it in stages.

In recent years, listed companies have paid more and more attention to the disclosure of sustainable development information. According to wind statistics, from 2020 to 2022, the number of companies that disclosed ESG-related reports was 1,142, 1,466, and 1,841, respectively. Among them, the number of disclosures in 2022 accounted for more than 30%, the sample companies of the Science and Technology Innovation 50, SZSE 100 Index and A+H basically fully disclosed sustainability-related reports, and the report disclosure rate of the sample companies of the SSE 180 Index and ChiNext Index exceeded %.

The issuance of the Guidelines will not only help guide listed companies to actively practice the concept of sustainable development, stimulate the endogenous power of enterprises, and improve the quality of companies, but also help outstanding listed companies that attach importance to sustainable development to stand out and be widely recognized by the market and investors, so as to further improve the valuation level.

Tian Xuan, deputy dean of Tsinghua University's PBC School of Finance, told the reporter that the introduction of the guidelines for sustainable development will help guide listed companies to comprehensively and systematically demonstrate their sustainable development capabilities to investors and stakeholders, and urge listed companies to further optimize their business development layout, strengthen their internal governance capabilities, and strengthen their awareness of social responsibility. At the same time, it can also stimulate the endogenous power of sustainable development of listed companies, promote the high-quality development of listed companies, and further enhance their long-term financing capabilities.

For investors and relevant stakeholders, the Sustainability Information Disclosure Guidelines provide a systematic and comprehensive assessment standard for the development status of listed companies. In addition, investors can directly understand the actions taken by listed companies to respond to and manage sustainability-related impacts, risks and opportunities based on the status of information disclosure, and then take corresponding investment decisions in a timely and objective manner, so as to grasp investment autonomy. In addition, with the gradual maturity of sustainable disclosure rules, investors are expected to have a wider choice of investment products, such as sustainable financial products.

* |Station cool Hailuo production |Zhang Xin Review |Edited by Zhu Baochen |Shangguan Monroe's final review |Zhang Xin

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