Some are on the list, and some are downgraded. Where has China’s ESG governance come from?

In recent years, with the continuous introduction of ESG policies and the continuous improvement of disclosure and evaluation standards, the disclosure rate of corporate ESG reports has also increased year by year. From vision to reality, from minority to the public, ESG presents a development trend as a whole. Of course, the phased characteristics of this process, the framework guidelines, and the problems presented in information disclosure are also worthy of our review and reflection. According to reports, among the more than 600 A-share listed companies that have disclosed ESG reports this year, about 128 companies' reports are titled “Social Responsibility and ESG Reports”.According to Sun Xi, chief ESG officer of Menglang Sustainable Digital Technology (Shenzhen) Co., Ltd., this is a special phenomenon in the transition period from traditional CSR reporting to ESG reporting. "CSR reports are generally traditional qualitative disclosures, with more descriptive content, and focus on the 'S' level, focusing on public welfare and charity. In fact, this content is only a part of the ESG report." Sun Xi said that many The company's concepts of CSR, ESG, and sustainable development are mixed, and even replace each other. The root cause is that they have not clarified two questions: Why should a report be issued? Who is the target group for the report? In fact, these two issues point to the motivation and goals of corporate information disclosure, and involve key issues such as the framework and standards adopted by corporate ESG reports, which directly affect the quality of information disclosure. From the perspective of the motivation and audience of the report, the reporting framework and content requirements for the public, investors and regulators are different. Taking the regulatory agency as an example, the report mainly meets the disclosure guidelines of the exchange. However, the report content for investors needs to present more quantitative indicators based on the relevant framework. Compared with traditional CSR reports, ESG reports need to refer to global mainstream ESG disclosure frameworks, such as the Global Reporting Initiative GRI Standards (2021), the Recommendations of the Working Group on Climate-related Financial Information Disclosures (TCFD), the Accounting Standards Board for Sustainable Development SASB, etc., as well as the domestic "China Corporate Social Responsibility Reporting Guidelines (CASS-ESG 5. 0)” and other mainstream frameworks, and conduct relatively standardized disclosures on substantive issues, key performance indicators, and stakeholder participation. The "social responsibility and ESG report" of some companies is precisely because the disclosure framework of social responsibility and ESG is confused, resulting in nondescript content, too much qualitative content, and a lack of substantive issues and quantitative indicators, such as carbon emission data, carbon neutrality targets, etc. . In response to this phenomenon, Sun Xi believes that by seeking external independent assurance to verify the accuracy and reliability of the data information in the report, it can enhance the confidence of shareholders and other stakeholders in the information disclosed in the report. At the same time, the industry still has different views on the "social responsibility and ESG report" issued by a number of state-owned enterprises including China Life Insurance, China Eastern Airlines, and CIMC. In an interview with China News Weekly, Wang Xiaoguang, president of Beijing Rongzhi Research Institute, believed that since the State-owned Assets Supervision and Administration Commission has long required central enterprises and state-owned enterprises to release social responsibility reports, if the ESG report is released separately, the content overlaps to a large extent, so it forms A combination of the two phenomena to meet regulatory requirements. In addition to the confusion in the framework and the lack of quantitative indicators caused by reporting motivations and unclear audiences, incomplete disclosure of ESG-related information has become the second "threshold" for many companies' ESG reports. In Sun Xi’s view, there are two reasons why many companies’ ESG reports cannot respond to “real issues”. One is the difficulty in collecting information, and the other is that many companies’ ESG reports are actually written by third parties. Information collection is the starting point of information disclosure. Without high-quality information collection, disclosure becomes water without a source and tree without roots. Leading platform companies also have similar difficulties in collecting ESG data from many invested companies in their ecosystems. For example, although Tencent's "Environmental, Social and Governance Report 2022" was compiled in accordance with the ESG reporting guidelines of the Hong Kong Stock Exchange and with reference to relevant standards, it has many bright spots in the three aspects of environment, society and governance, but Tencent's huge volume Ecosystems including foreign investment and mini programs are not included in the scope of the report. Some people believe that Tencent's promotion of ESG should not only consider the company's own operations, but also need to promote the development of Tencent's business ecosystem as a whole. In Sun Xi’s view, it is precisely because of the large scale of Tencent’s invested subsidiaries that “it is very difficult for these companies to report the data that needs to be released according to a unified standard.” Due to the difficulties in data collection, when companies submit ESG reports to the first When a tripartite agency writes, some companies tend to "report good news but not bad news", and the quality of the report will inevitably be greatly reduced. The process of data collection cannot be replaced by a third-party organization. When an enterprise and a third-party organization become a "Party A and Party B" relationship, many tasks that require time and cost The data collection work is over. "Through the digital system, managing non-financial information like financial information in daily work and realizing online and intelligentization will definitely be a major trend in the future." Sun Xi said. In this regard, Wang Xiaoguang told "China News Weekly" that the company's market operations, profit scale, human resources, etc. are "visible" performances, so they are relatively complete, but because of the uncertainty of risk factors, risk management means additional cost, and thus relatively absent. The quality of ESG information disclosure includes timely submission and the accuracy and rationality of data. Only when ESG is integrated with the overall operation of the enterprise, risk management and long-term growth and becomes the infrastructure of the enterprise can ESG disclosure be supported. On the basis of ensuring the quality of information disclosure, looking back at the number of reports, although the number of ESG reports released in 2023 has increased compared with previous years, in terms of proportion, there are still more than 60% of listed companies that have not disclosed ESG information. The key reason is A: Non-policy mandated. In 2013, the Hong Kong Stock Exchange issued the "Environmental, Social and Governance Reporting Guidelines" to establish a basic framework for ESG information disclosure in Hong Kong stocks. In 2018, the China Securities Regulatory Commission revised the "Code of Corporate Governance for Listed Companies", stipulating that listed companies are responsible for disclosing ESG information, but it is not yet mandatory. For some domestic companies, since ESG disclosure is currently not mandatory, and this work means costs, companies naturally lack sufficient motivation to promote it. Especially when relevant disclosures draw public attention to their business risks, companies will think that ESG reports are "counterproductive" and have a repulsive mentality. Through many ESG reports, we can see that the current ESG disclosure of Chinese companies is going through the "triple gate" in the development process: vague framework, lack of information, and the number needs to be improved. If ESG rating is an exam, only by crossing these three "thresholds" can companies obtain the "exam admission ticket" more smoothly. On the basis of disclosure quality, looking back at the number of reports, although the number of ESG reports released in 2023 has increased compared with previous years, in terms of proportion, more than 60% of listed companies have not disclosed ESG information. There is only one key reason: Policy enforcement. In 2013, the Hong Kong Stock Exchange issued the "Environmental, Social and Governance Reporting Guidelines" to establish a basic framework for ESG information disclosure in Hong Kong stocks. In 2018, the China Securities Regulatory Commission revised the "Code of Corporate Governance for Listed Companies", stipulating that listed companies are responsible for disclosing ESG information, but it is not yet mandatory. For some domestic companies, since ESG disclosure is currently not mandatory, and this work means costs, companies naturally lack sufficient motivation to promote it. Especially when relevant disclosures draw public attention to their business risks, companies will think that ESG reports are "counterproductive" and have a repulsive mentality. Through many ESG reports, we can see that the current ESG disclosure of Chinese companies is going through the "triple gate" in the development process: vague framework, lack of information, and the number needs to be improved. If ESG rating is an exam, only by crossing these three "thresholds" can companies obtain the "exam admission ticket" more smoothly. On the basis of disclosure quality, looking back at the number of reports, although the number of ESG reports released in 2023 has increased compared with previous years, in terms of proportion, more than 60% of listed companies have not disclosed ESG information. There is only one key reason: Policy enforcement. In 2013, the Hong Kong Stock Exchange issued the "Environmental, Social and Governance Reporting Guidelines" to establish a basic framework for ESG information disclosure in Hong Kong stocks. In 2018, the China Securities Regulatory Commission revised the "Code of Corporate Governance for Listed Companies", stipulating that listed companies are responsible for disclosing ESG information, but it is not yet mandatory. For some domestic companies, since ESG disclosure is currently not mandatory, and this work means costs, companies naturally lack sufficient motivation to promote it. Especially when relevant disclosures draw public attention to their business risks, companies will think that ESG reports are "counterproductive" and have a repulsive mentality. Through many ESG reports, we can see that the current ESG disclosure of Chinese companies is going through the "triple gate" in the development process: vague framework, lack of information, and the number needs to be improved. If ESG rating is an exam, only by crossing these three "thresholds" can companies obtain the "exam admission ticket" more smoothly.