The China Enterprise Reform and Development Society (CERDS), Ping An Insurance Company of China and dozens of other companies in the country have developed its first environmental, social and governance (ESG) disclosure standards, which come into effect June 1.
The Guidance for Enterprise ESG Disclosure, which was published by CERDS, is based on relevant Chinese laws, regulations and standards while considering China's context. It includes a corporate disclosure indicator system with three dimensions – environmental, social and governance – and provides a basic framework for their disclosure.
The guidance also specifies disclosure principles, indicators, requirements, applications, responsibilities and supervision for enterprises of different types, industries and sizes. It can support Chinese enterprises in their ESG governance practices and disclosure, serving as a reference for self-evaluation and third-party evaluation.
CERDS had strict requirements for companies participating in the development of the guidance standard. The companies must have outstanding performance and be ranked among the top in their industries, with high social influence and reputation. They must fully, accurately and comprehensively implement the concept of sustainable development in their operations, promote the construction of a corporate ESG system and achieve outstanding ESG outcomes.
In recent years, awareness of ESG issues has grown in China, as has the demand for enterprises to make ESG disclosures. However, the common international ESG rating standards are difficult to match with the operating conditions in China.