At present, ESG is accelerating from a "multiple-choice question" to a "must answer question", and the importance and urgency of sustainable development are becoming increasingly prominent.
ESG integrates environmental, social and governance requirements into its business model and management system, and is committed to maximizing comprehensive value, which is highly consistent with the essential requirements of Chinese path to modernization and an important practice of implementing the new development concept.
Chinese enterprises, especially listed companies, are actively participating in international standard setting, sharing ESG management capabilities, and helping to enhance the influence of China's ESG system. As the "leader" of national economic development, state-owned enterprises have played a positive leading role.
On November 6th, the three major stock exchanges in Shanghai, Shenzhen, and Beijing drafted the "Guidelines for the Preparation of Sustainable Development Reports for Listed Companies (Draft for Comments)" (hereinafter referred to as the "Guidelines"). The Guidelines provide necessary detailed guidance on conducting dual importance assessment analysis and the four element disclosure framework for market attention, providing reference for listed companies to prepare sustainable development reports.
Information disclosure is increasingly receiving attention from various stakeholders
At present, the capital market field is increasingly attaching great importance to guiding listed companies to improve their performance in various aspects such as environment, social responsibility, and corporate governance (ESG), in order to assist enterprises themselves and promote sustainable economic, social, and environmental development.
Since 2024, regulatory authorities have intensively released ESG disclosure related documents, such as the "Guidelines for Sustainable Development Reports of Listed Companies" and "Guidelines for Corporate Sustainable Disclosure - Basic Guidelines (Draft for Comments)". ESG action plans and other documents have also been released in Beijing, Shanghai, and Suzhou.
On June 3, 2024, the China Enterprise Reform and Development Research Association and the Responsibility Cloud Research Institute released the "General Framework for China Enterprise Sustainable Development Reporting Guidelines (CASS-ESG 6.0)" and other policies, highlighting the increasing importance and urgency of ESG information disclosure.
In April 2024, the State Council issued the "Several Opinions on Strengthening Supervision, Preventing Risks, and Promoting High quality Development of the Capital Market" (also known as the new "National Nine Articles"), which clearly proposed to "improve the sustainable information disclosure system of listed companies".
In September 2024, the China Securities Regulatory Commission publicly solicited opinions on the "Decision on Amending the Measures for the Administration of Major Asset Restructuring of Listed Companies (Draft for Comments)" (i.e. the new "Six Articles on Mergers and Acquisitions"), which clearly stated the need to "strictly fulfill various legal obligations such as information disclosure".
In October 2024, the China Securities Regulatory Commission released the "Regulatory Guidelines for Listed Companies No. 10- Market Value Management (Draft for Comments)" for public consultation, which is the first time that the regulatory authorities have issued a specialized guidance document on "market value management".
The draft for soliciting opinions proposes six paths for market value management: (1) mergers and acquisitions; （2） Equity incentives and employee stock ownership plans; （3） Cash dividends; （4） Investor relations management; （5） Information disclosure; （6） Share repurchase.
At the same time, five red lines have been drawn for market value management, strictly prohibiting the following behaviors in market value management:
Manipulating the disclosure of information by listed companies, misleading or deceiving investors through controlling the pace of information disclosure, selective disclosure of information, and disclosure of false information;
Obtaining illegal benefits and disrupting the order of the capital market through insider trading, leaking insider information, manipulating stock prices, or cooperating with other entities to carry out manipulation activities;
Make predictions or commitments on the prices of securities and their derivatives of listed companies;
Failure to implement share repurchase through dedicated repurchase accounts, failure to implement share increase through corresponding real name accounts, and violation of information disclosure or stock trading rules for share increase and repurchase;
Directly or indirectly disclose confidential project information.
The market value management (draft for soliciting opinions) specifies the requirements for information disclosure and sets red lines for market value management. At the same time, it requires good investor relations management, enhances the quality and transparency of information disclosure, and promotes the full reflection of the investment value of listed companies on the quality of listed companies.
On the basis of continuously strengthening environmental, social, and governance information disclosure in the early stage, the China Securities Regulatory Commission has guided the Shanghai, Shenzhen, and North Stock Exchanges to release the "Guidelines for Sustainable Development Reporting of Listed Companies" (referred to as the "Guidelines"), which will be officially implemented from May 1, 2024.
The Guidelines are the first mandatory regulations to systematically regulate the disclosure of sustainable development information by listed companies, making ESG information disclosure of listed companies systematic and standardized.
One of the important aspects of ESG practice is ESG information disclosure, which is a key means for listed companies to comprehensively communicate with various stakeholders such as investors, regulatory agencies, employees, suppliers, consumers, and media. It is also an important way for companies to systematically showcase their ESG concepts, policies, actions, and results.
As the "leader" of national economic development, central enterprises also fully play their leading role. In March 2022, the Social Responsibility Bureau will be established to further strengthen the construction of the central enterprise social responsibility system, guide and promote enterprises to actively practice ESG concepts.
Since 2021, for three consecutive years, the "Environmental, Social and Governance (ESG) Blue Book of Central Enterprise Listed Companies" has been compiled, and the "Central Enterprise ESG Pioneer 50 Index" has been released.
At the same time, we will participate in the applicability evaluation of the International Sustainability Standards Board (ISSB) standards in China, and work together with 9 departments including the Ministry of Finance to promote the construction of China's sustainable disclosure standards system. In May 2022, the "Work Plan for Improving the Quality of Listed Companies Controlled by Central Enterprises" was formulated and issued, requiring listed companies controlled by central enterprises to disclose ESG special reports.
In June 2024, the State owned Assets Supervision and Administration Commission of the State Council issued the "Guiding Opinions on the High Standard Fulfillment of Social Responsibility by Central Enterprises in the New Era" (referred to as the "Guiding Opinions"), which requires central enterprises to effectively strengthen ESG work and become an important milestone in promoting ESG work of central enterprises.
The above information disclosure requirements are clearly defined in the form of policies and regulations, and are well implemented and supervised accordingly. Under the premise of putting investors first, the needs of various stakeholders are fully considered, thus promoting the continuous improvement and development of information disclosure and attracting more stakeholders to join in.