The primary objectives of the report are to serve as a reference for listed companies to improve their ESG practices and disclosure effectiveness. It also aims to offer reliable information to investors, government bodies, and other stakeholders interested in the development of China's listed companies, thereby encouraging more engagement in and support for the ESG development of these firms.
China's services trade has resiliently sustained rapid growth, emerging as a highlight of its high-standard opening-up endeavors. Against this backdrop, the China International Fair for Trade in Services 2023 (2023 CIFTIS) was held from September 2 to 6 in Beijing, China. Themed "openness leads development; cooperation creates a win-win future", CIFTIS is poised to serve as a global platform for enterprises to showcase their cutting-edge technologies, expand opening-up, deepen cooperation and guide innovation.
During the 2023 CIFTIS, the "Carbon Neutrality Actions and Corporate ESG Innovation Forum" held on the afternoon of September 5th witnessed the joint release of the "China Listed Companies ESG Research Report (2023) Bluebook" by the Social Sciences Academic Press (China), the Chinese Institute of Business Administration, and the Beijing Rongzhi Corporate Social Responsibility Institute.
The report, based on a sample of 489 listed companies, consisting of 324 from the Shanghai Stock Exchange (66.26%) and 165 from the Shenzhen Stock Exchange (33.7%), provides an in-depth analysis of these companies' ESG performance from various angles for the years 2021 to 2022.
The report highlights four key aspects of China's listed companies' ESG development:
First, the report reveals that the overall ESG evaluation scores of Chinese listed companies are relatively low, with only 11.86% receiving an A-level rating. Second, the environmental ESG practices and disclosure levels are lacking, with 80% of companies falling into the middle or lower tiers. Third, ESG information disclosure quality among listed companies has been steadily improving, with significant variations observed across different industries. Notably, the manufacturing and financial sectors face higher ESG risks, primarily related to corporate governance and environmental compliance in manufacturing and product and ethical issues in finance. Fourth, state-owned companies are generally at the forefront of ESG development, deeply integrated into national strategies.
In terms of research findings, the report highlights several trends in China's listed companies' ESG investment:
- Strengthened ESG Reporting and Practices: Regulatory improvements and global investor interest are driving listed companies to proactively disclose ESG reports and expand their scope and depth.
- Progressive Development of ESG Evaluation Systems: National sustainable development policies are elevating market interest in corporate ESG performance and information disclosure, offering opportunities for the enhancement and perfection of China's ESG evaluation systems.
- Smarter ESG Evaluation Outcomes: Advancements in digital technologies support information gathering and system enhancement in ESG evaluation, allowing for the timely identification and assessment of ESG risks to inform investment decisions.
- Deepening ESG Investment Philosophy: As China advances its green finance concept and practices, investors are increasingly focusing on ESG-related themes, integrating ESG factors into investment decisions to enhance risk management.
- Continuously Improving ESG Ecosystem: Guided by new development philosophies and "Dual Carbon" goals, China's ESG development has been rapid. Significant progress has been made in policy development, ESG information disclosure, ESG investment, and international cooperation, contributing to the gradual formation of a comprehensive ESG ecosystem.
This comprehensive report sheds light on the current state and future trends of ESG development among China's listed companies, offering valuable insights for stakeholders across various sectors.