Chinese companies must step up with climate disclosures as they fail to meet even half the minimum standards, LGIM says

Nearly all the Chinese companies whose climate risk disclosures LGIM has reviewed failed to meet half the minimum standards set by the London-based firm

They are far behind their regional peers, particularly in their lack of disclosure on meaningful company policies to tackle emissions and targets to become carbon-neutral, says LGIM

3-MIN READ3-MIN

Chinese companies are far behind their regional peers, particularly in their lack of disclosure on meaningful policies to tackle emissions, says LGIM. Photo: Reuters

Published: 11:37am, 14 Dec 2020Updated: 8:40pm, 14 Dec 2020

President Xi Jinping’s goal for China to become carbon-neutral before 2060 will help asset managers push for better climate risk disclosure by listed Chinese companies which have failed miserably in meeting standards, according to Legal and General Investment Management (LGIM).

Some 98 per cent of the 142 Chinese companies whose climate risk disclosures LGIM has reviewed have failed to meet even half of the minimum standards set by the London-based firm, which manages around US$1.5 trillion of assets, said Meryam Omi, head of sustainability and responsible investment strategy.

Chinese companies are far behind their regional peers, particularly in their lack of disclosure on meaningful company policies to tackle emissions, climate governance frameworks and targets to become carbon-neutral, she said.

A company achieves long-term carbon neutrality first by investing in facilities to reduce, capture and store or use their carbon dioxide emissions. Any residual emissions would eventually be fully offset by investing in facilities elsewhere to remove the same quantity from the atmosphere.

“With this commitment of carbon neutrality by 2060, we are much more hopeful on discussing how to lower emissions in the fossil fuel industry significantly,” Omi told the Post. “They should be able to talk about aspects of their business that may not be sustainable in the long run and their plans for them.