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China’s new ESG disclosure guidelines need a forward-looking slant for international alignment, experts say
- The guidelines, comprising 127 environmental, social and governance (ESG) metrics and 373 sub-metrics, is the first China-focused disclosure standard
- They are ‘a helpful starting point and point of reference,’ said Alexander Chan, head of ESG client strategy for Asia-Pacific at Invesco
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A set of voluntary corporate sustainability disclosure guidelines launched in China last month has provided a good starting point for regulators to set future requirements, but more forward-looking disclosures will be needed for China to align with international norms, according to experts.
The reporting guidelines, drafted by over 80 think tanks and companies and comprising 127 environmental, social and governance (ESG) metrics and 373 sub-metrics, is the first China-focused ESG disclosure standard. Nearly 40 per cent of the metrics pertain to environmental matters.
Published by the China Enterprise Reform and Development Society (CERDS), a state-backed think tank, its metrics are mostly aligned with international standards.
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One exception, with “Chinese characteristics”, is the “civic duties” metric that pertains to the national development goals of rural revitalisation and common prosperity.
The guidelines are “a helpful starting point and point of reference,” said Alexander Chan, head of ESG client strategy for Asia-Pacific at US-based Invesco, which manages US$1.5 trillion of assets.
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Initially, it will probably be mostly adopted by large companies, as smaller ones struggle to find the expertise and resources required to complete the disclosure exercise, he said.
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