In February 2024, the Shanghai and Shenzhen North Stock Exchanges issued the Self-Regulatory Guidelines for Listed Companies – Sustainability Reports (Trial) (Consultation Draft), which is the first time that the three major exchanges have drafted guidelines for sustainability information disclosure. With the tightening of information disclosure supervision, a number of listed companies have set up ESG management committees since 2024 to improve their corporate governance mechanisms. In addition, ESG-related investment products are also showing a growth trend.
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For the first time, the three major exchanges have drafted guidelines on sustainability disclosure
On February 8, 2024, under the unified guidance of the China Securities Regulatory Commission, the Shanghai and Shenzhen North Stock Exchanges issued the Guidelines for the Self-Regulatory Supervision of Listed Companies - Sustainability Report (Trial) (Draft for Comments) in order to thoroughly implement the new development concept, standardize the disclosure of information related to the sustainable development of listed companies, guide listed companies to practice the concept of sustainable development, and promote the high-quality development of listed companies.
Specifically, the scope of mandatory disclosure of the SSE's sustainability report includes sample companies of the SSE 180 and STAR 50 Index, as well as companies listed at home and abroad. The scope of mandatory disclosure by the Shenzhen Stock Exchange includes SZSE 100 and ChiNext index sample companies, as well as companies listed both domestically and overseas. So far, more than 450 A-share companies listed in Shanghai and Shenzhen have met the mandatory disclosure requirements.
In addition to companies that are required to disclose, the Shanghai and Shenzhen Stock Exchanges encourage other listed companies to disclose voluntarily.
The Beijing Stock Exchange, taking into account the characteristics of the development stage of innovative small and medium-sized enterprises, does not make mandatory disclosure requirements for the "Sustainability Report". In the initial stage, it is proposed to implement the principle of "voluntary disclosure" to encourage companies that are willing and able to disclose their sustainability reports in accordance with the guidelines.
In 2023, a total of 1,023 listed companies on the Shanghai Stock Exchange disclosed their 2022 social responsibility reports, ESG reports or sustainability reports, accounting for 47%; In 2022, more than 800 listed companies on the Shenzhen Stock Exchange disclosed social responsibility reports, ESG reports or sustainability reports.
In terms of disclosure time, the guidelines indicate that the Sustainability Report should be disclosed at the same time as the annual report after being reviewed and approved by the Board of Directors, and the reporting subject and period should be consistent with the annual report.
A number of listed companies have set up ESG management committees
After the issuance of the above-mentioned "guidelines", on February 19, Changhong Meiling (000521SZ) announced that in order to further improve the company's ESG management and operation level, improve the corporate governance structure, and better meet the needs of strategic development, the 40th meeting of the 10th board of directors of the company deliberated and passed the "Proposal on the Establishment of ESG Management Organizational Structure of the Company", and agreed to establish an ESG management organizational structure and an ESG management committee under the board of directors of the company.
Changhong Meiling has four domestic manufacturing bases in Hefei, Mianyang, Jingdezhen and Zhongshan, overseas manufacturing bases in Indonesia and Pakistan, and its subsidiary Sichuan Changhong Air Conditioning is a key pollutant discharging unit announced by the environmental protection department. At present, Changhong Meiling has basically completed the industrial layout of comprehensive white electricity, covering the whole product line of refrigerators, washing machines, air conditioners, kitchens and bathrooms, small household appliances, etc., and has entered new industries such as biomedicine.
In addition to Changhong Meiling, since 2024, Zhongfu Industry (600595SH), Joy Co., Ltd. (688121SH) has successively announced its intention to set up an ESG management committee.
The main business of Zhongfu Industry is aluminum and aluminum deep processing, supporting coal mining, thermal power generation, carbon and other industries. The company's end products can be widely used in cans, Tetra Pak, aseptic bags and other fast-moving consumer goods packaging, new energy vehicles and consumer electronics.
In order to actively respond to the policy or development requirements such as carbon footprint management of the first chain of aluminum processing and the carbon tariff of the European Union, Zhongfu Industrial is gradually establishing a carbon emission data management and accounting system for aluminum deep processing products to carry out carbon emission target management. In June 2023, Zhongfu Industrial's main products can body material, coated can cover material, new energy battery foil and anodizing material obtained SGS carbon footprint certification, and the company's subsidiary Henan Zhongfu High Precision Aluminum passed the GRS global ** certification.
The main business of Joy Co., Ltd. is the modular and integrated manufacturing of large-scale refining and chemical special equipment, and environmental pollutants such as wastewater, waste gas, solid waste, and noise will be generated during the production and assembly of special refining and chemical equipment.
At present, Joy Co., Ltd. further promotes industrial upgrading and innovative development under the new situation, such as continuing to promote R&D investment, gathering low-carbon technologies in the petrochemical industry through resource integration, practicing green and clean strategies, and increasing investment in process development and engineering capabilities in carbon neutral technology, clean energy and new materials for petrochemical plants.
The scale of ESG products has grown
According to the "2023 China ESG Development*** In 2023, China's ESG policy and market continued to develop in a stable and orderly manner, which is characterized by information disclosure and product growth.
ESG products mainly include bonds, public offerings**, bank wealth management, etc.
According to the statistics of Debang bonds, in terms of bonds, as of December 29, 2023, China has issued 3,877 ESG bonds, excluding bonds with undisclosed total issuance, and the stock size has reached 578 trillion yuan. Among them, the balance of green bonds accounted for the largest proportion, reaching 5935%。
CSI Pengyuan said that at present, the investors of green bonds are mainly banks, especially those in the green finance reform and innovation pilot zone, because of policy requirements, so the enthusiasm for green investment is high.
For instance, in October 2023, Bank of China (601988SH) successfully issued a two-year offshore RMB 1.6 billion green bond to support eligible green projects in Europe and the Middle East, including renewable energy and clean transportation.
In November 2023, Industrial and Commercial Bank of China (601398SH) successfully issued 20 billion yuan of green financial bonds in the national interbank market, and the raised funds were mainly invested in green industry projects such as energy conservation and environmental protection, clean production, clean energy, ecological environment, green infrastructure upgrading, and green services.
In January 2024, China Construction Bank (601939SH) issued a US$600 million green bond by DIFC Branch, which will select assets with significant greenhouse gas emission reduction effects, such as clean transportation.
In terms of public offerings**, as of December 29, 2023, there are 503 ESG products in the market, with a total net value of 5,3956.8 billion yuan. Among them, the scale of environmental protection products accounted for the largest proportion, reaching 4544%。
In terms of bank wealth management, as of December 29, 2023, there were 447 ESG products on the market. Among them, pure ESG products accounted for the largest proportion, reaching 5906%。