China's New ESG Disclosure Guidelines to Implement on June 1

The State Council-backed body, known as CERDS (China Enterprise Reform and Development Society), has designed a new ESG disclosure guidelines based on Chinese laws and regulations, in collaboration with dozens of Chinese corporates.

The companies that were allowed to participate in the development of the guidelines were those already ranked among the top in their industry and which had already implemented the concept of sustainable development in their operations and produced "exceptional ESG results".

"The release of this group standard fills the gap in the field of corporate ESG disclosure standards in China," said an official notice when the guidelines were released last month. "It will promote the accuracy and effectiveness of information disclosure by Chinese enterprises and help Chinese enterprises practice new development concepts and achieve high-quality development."

The guidelines feature an indicator system for disclosure of "scientific and measurable" corporate information, comprising three first-level indicators ("E", "S", and "G"), ten second-level indicators, 35 third-level indicators, and 118 fourth-level indicators.

The guidelines also specify disclosure principles, indicators, requirements, applications, responsibilities, and supervision for businesses of different types, industries, and sizes.

"The standards can support Chinese enterprises in their ESG governance practices and disclosure, serving as a reference for self-evaluation and third-party evaluation,"  said Ping An Insurance, one of the companies that helped to develop the guidelines.

Other major corporates that were involved in the development of the guidelines included China Mobile, Ant Group, Dagong Credit Rating, China Post Life Insurance, along with asset managers and a number of energy and industrial companies.

The guidelines will take effect on 1 June 2022.

Chinese enterprises are asked to use the guidelines to disclose ESG information in accordance with the guidelines, depending on government and regulatory requirements, or voluntarily if formal requirements are not in place.

Disclosures should be made in ESG reports, published on platforms designated by regulatory authorities or independently selected by companies, the guidelines said.

Source: Regulation Asia