Author丨Cui Wenjing.
Editor丨Jiang Shiqiang.
Source丨Xinhua News Agency.
The disclosure rate of China's A-share ESG report (also known as sustainability report) has gradually increased in recent years, reaching 36% in 2022.
However, due to the lack of unified ESG disclosure standards in China, the content of ESG reports varies greatly.
Today, this problem is being fundamentally solved.
On February 8, the Shanghai and Shenzhen North Stock Exchanges issued the Guidelines for the Continuous Supervision of Listed Companies - Sustainability Report (Consultation Draft) (hereinafter referred to as the "Guidelines") to systematically regulate the ESG reporting and disclosure of listed companies, and the Guidelines are open to the public for comments.
According to the Guidelines, sample companies that continue to be included in the SSE 180, STAR 50, SZSE 100 and ChiNext indices during the reporting period, as well as companies listed both domestically and overseas, are required to disclose ESG reports, while the rest of the listed companies are voluntary.
However, there is a longer transition period for mandatory disclosure of ESG reports, and listed companies that are subject to mandatory disclosure of sustainability reports should publish their 2025 sustainability reports by 30 April 2026.
More than 450 listed companies will be required to disclose ESG reports from 2026
On February 8, the Shanghai and Shenzhen North Stock Exchanges successively issued the "Guidelines", and the guidelines issued by the three major exchanges have differences in terms of mandatory disclosure, but the specific disclosure content is basically the same.
As China's first systematic ESG disclosure rules, the Guidelines have many highlights.
First, mandatory disclosure is combined with voluntary disclosure. During the reporting period, the sample companies were continuously included in the SSE 180, STAR 50, SZSE 100 and ChiNext indices, as well as companies listed at home and abroad.
At present, there are more than 450 such listed companies, accounting for 51% of the A** value.
Other listed companies are encouraged to disclose ESG reports but are not mandatory, and if disclosure is voluntary, the relevant indicators should also comply with the requirements of the Guidelines.
Second, listed companies that are required to disclose ESG reports need not be in a hurryThe Guidelines provide for a more adequate transition period and flexible disclosure requirements.
On the one hand, listed companies that are required to disclose ESG reports can guarantee to publish their 2025 Sustainability Report by April 30, 2026.
On the other hand, listed companies in the first reporting period 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 addition, from the perspective of disclosure indicators, it mainly includes three aspects: environmental information disclosure (E), social information disclosure (S), and corporate governance information disclosure (G).
Among them, in terms of corporate governance information disclosure, the disclosure requirements of the three major exchanges are basically the same, focusing on corporate governance structure, internal systems, control measures and procedures, etc., and setting up anti-bribery, anti-unfair competition issues.
In terms of environmental information disclosure, the common denominator is the analysis of the topics to be disclosed around the four core contents of governance, strategy, impact, risk and opportunity management, indicators and targets. Climate adaptation, transition plans, total greenhouse gas emissions, emission reduction measures, and opportunities related to carbon emissions are all common requirements for the Shanghai and Shenzhen Stock Exchanges.
At the same time, the exchange also requires disclosure of pollutants, waste, ecosystems and biodiversity, environmental incidents and penalties, circular economy, energy use, water use and other topics.
In terms of social information disclosure, the exchange has set up more than 10 topics, including rural revitalization, social contribution, innovation-driven, science and technology ethics, first-chain security, equal treatment of small and medium-sized enterprises, product and service safety and quality, data security and customer privacy protection, employees, etc. Listed companies need to disclose the impacts, risks and opportunities involved in the relevant issues, the specific measures taken by the company, and the specific results achieved.
ESG reporting disclosure has a long way to go
In recent years, due to the impact of policy supervision, the overall number of ESG disclosures of A-share listed companies has increased significantly. In the past decade, the disclosure rate of A-share ESG reports has increased from 12% in 2012 to 36% in 2022.
According to Xue Chen, an ESG researcher at the Industrial Securities Think Tank, there is a significant gap in ESG information disclosure among various industries, with high disclosure rates in banks and non-bank finance, and relatively low disclosure rates in industries such as medicine and biology, chemicals, machinery and equipment and electronics. From the perspective of company attributes, the disclosure rate of ESG reports of state-owned enterprises is the highest, and the disclosure rate of private enterprises needs to be further improved.
Xue Chen believes that in terms of the quality of disclosure, there is still room for further improvement in the ESG information disclosure of China's listed companies.
First of all, the standardization of ESG information disclosure needs to be further improved. Due to the lack of unified ESG disclosure standards, as well as the different understanding and importance of ESG concepts, there are great differences in the quality and content of ESG-related reports of listed companies.
Secondly, the integrity and balance of ESG information disclosure need to be improved. In the process of ESG information disclosure, listed companies often only emphasize positive information and avoid negative information, which does not objectively reflect their ESG performance and risk profile.
In addition, ESG information disclosure is not very comparable. The caliber of ESG disclosure data of listed companies is inconsistent, and there is a lack of effective third-party assurance, which makes it difficult to achieve horizontal and vertical comparison of ESG disclosure.
Liu Junwei, chief quantitative and ESG analyst of CICC's research department, also mentioned that due to the lack of standards.
1. Due to the difficulty of disclosure and other reasons, the disclosure content of some listed companies has problems such as lack of quantitative data, poor comparability, and insufficient balance of information. At the same time, the importance of ESG issues varies depending on factors such as industry characteristics, business environment, and corporate development stage, so the focus of ESG disclosure varies from industry to industry.
According to CICC's ESG rating series of studies, "greenhouse gas emissions", "labor relations management" and "employee diversity" are ESG topics that companies in various industries are concerned about.
In response to some of the above-mentioned issues, the Guidelines have made clear specifications. For example, Scope 1, Scope 2 and Scope 3 greenhouse gas emissions, which have attracted the most attention in the market, have ushered in unified disclosure norms. The Guidelines stipulate that disclosing entities shall disclose Scope 1 and Scope 2 greenhouse gas emissions, and that qualified disclosure entities may disclose Scope 3 greenhouse gas emissions.
At the same time, the Guidelines specify that the disclosing entity should calculate and disclose the total amount of greenhouse gas emissions during the reporting period in conjunction with energy use, and convert greenhouse gas emissions such as methane into metric tons of carbon dioxide equivalent.
In addition, the Exchange encourages qualified disclosure entities to engage third-party institutions to verify or verify the company's greenhouse gas emissions and other data.
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Editor: Liu Xueying, intern: Zhao Fengling.
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