The SSE formulates the Three-Year Action Plan on Improving ESG Information Disclosure Quality of Listed Companies on the SSE (2024-2026) and solicits public opinions on the guides for the compilation of sustainability reports by listed companies
In order to implement the new development concept, accelerate the green transition in all areas of economic and social development, make achievements in "five major financial articles", and improve the quality of ESG information disclosure of listed companies, the Shanghai Stock Exchange (SSE) recently formulated the Three-Year Action Plan on Improving ESG Information Disclosure Quality of Listed Companies on the SSE (2024-2026) (hereinafter referred to as the Action Plan).
Sustainable development is the "golden key" to solving current global problems. True development is development for all and good development is sustainable. As the world's second largest economy, China is an important practitioner and promoter of global sustainable development. In recent years, companies listed on the SSE have followed international trends with their own realities to actively integrate ESG concepts and requirements into their business models and management systems, continuously explored the Chinese samples of ESG practices, continuously enriched the Chinese connotation of ESG standards, and explored an ESG development path that is in line with the international concept of sustainable development and reflects the requirements of Chinese characteristics.
The first is to pay more attention to environmental protection and help achieve the goal of "carbon peak and carbon neutrality". Key elements such as energy conservation and emission reduction, circular economy, and supply chain co-creation were incorporated into the core operating philosophy of the companies. In 2023, a total of 1,896 companies listed on the SSE established environmental protection-related mechanisms, accounting for more than 80% of all, with environmental protection investment of more than 200 billion yuan, reducing carbon dioxide emissions by more than 800 million tons.
The second is to pay more attention to rural revitalization and actively promote the consolidation of poverty alleviation achievements. In combination with their own resource endowments and the characteristics of the industry, the companies have promoted the sustainable and high-quality development of local industries through various measures such as financial assistance, consumption assistance, industrial assistance, employment assistance, talent revitalization, agricultural loans, and re-loans and rediscounts to support agriculture and small businesses. In 2023, the companies have invested a total of more than 100 billion yuan.
The third is to pay more attention to supply chain security and to build a win-win ecosystem. The companies have taken advantage of the leading role of leading enterprises, fully considered ESG factors in their supplier screening criteria, conducted on-site inspections of suppliers, implemented classified management, ensured the steady improvement of supply resources and product quality, focused on building a green supply chain, and promoted carbon reduction and emission reduction in the value chain, shaping a more sustainable and resilient supply chain system.
The beneficial exploration of ESG practices by companies listed on the SSE has provided rich materials for the formulation of Chinese standards for ESG information disclosure, and has also become an important consideration for investors investing in Chinese enterprises. According to statistics, in 2023, 1,187 companies listed on the SSE released ESG reports, sustainability reports or social responsibility reports, with a disclosure rate of over 52%, an increase of more than 5 percentage points year-on-year, and a record high in both the number of disclosures and disclosure rate. In terms of ratings, among the 241 companies included in the MSCI ratings for two consecutive years, 69 companies have been upgraded, and the number of companies with an A rating or higher has increased from 15 to 38. In terms of investment, as of the end of June 2024, there were 273 domestic ESG publicly offered fund products with a scale of more than 260 billion yuan. The SSE’s market ecology of the positive interaction between ESG information disclosure, evaluation and investment has been initially formed.
The SSE has formulated the Action Plan to effectively implement the requirements of Guidelines No.14 of SSE for Self-Regulation of Listed Companies—Sustainability Report (Trial) (hereinafter referred to as the Guidelines), promote listed companies to improve their ESG governance level through better disclosure and guide listed companies to better practice the concept of sustainable development.
The first is to improve listed companies’ ESG information disclosure capabilities and the efficiency of supervision and services. The SSE will continuously optimize the ESG information disclosure system, actively launch digital tools and training services, provide a "toolbox" for listed companies to compile ESG reports, and regularly discover outstanding cases and achievements of characteristics, so as to give full play to the leading role of best practices. The second is to increase fund support for green transition. The SSE will continuously innovate ESG financial services and products, enrich the supply of ESG index products, encourage the issuance of various ESG-themed funds, actively support the application of ESG evaluation results of CSI in various financial products, provide financing convenience for listed companies with high ESG ratings, and guide more funds to flow into the field of sustainable development. The third is to carry out continuous promotion for the listed companies and keep international communication and cooperation on ESG. The SSE will vigorously support listed companies to be in line with international practices, and help to share the work initiatives and achievements of Chinese companies in the ESG field through platforms such as the World Federation of Exchanges (WFE), various international conferences, forums and salons, and investor performance briefings, so as to tell the ESG stories of Chinese companies. The fourth is to accelerate the digital construction of ESG. The SSE will use big data technology and artificial intelligence algorithms to explore the formation of an ESG database for listed companies, promote the application of ESG data information in various scenarios, and support the CSI to enrich ESG data products such as climate transition evaluation, so as to provide reference for sustainable investment.
In order to continuously optimize the rule system of ESG information disclosure, the SSE also drafted the Guide No.4 for Self-Regulatory Supervision on Listed Companies of the SSE — Compilation of Sustainable Development Reports (Draft for Comment) and the Guide No.13 for Self-Regulatory Supervision on Listed Companies of the SSE STAR Market— Compilation of Sustainable Development Reports (Draft for Comment) (hereinafter referred to as the Guides) and solicits public opinions from the market. The Guides provide a "toolbox" and "treasure book" for listed companies to improve governance structures and procedures of sustainable development, identify material issues, and analyze sustainability-related risks and opportunities. At the same time, in the Guides, the relevant disclosure requirements of the Guidelines are refined into disclosure points, and specific applicable explanations are provided to facilitate listed companies to compile sustainability reports.
In the next step, the SSE and all market parties will actively participate in accelerating the green transition in all areas of economic and social development. By optimizing systems, strengthening guidance and improving services, the SSE will help to promote listed companies to become practitioners and leaders of the ESG concept, continuously help to open up a Chinese ESG development path in the interaction between global trends and Chinese practices, and help to improve the quality of listed companies and promote the high-quality development of the capital market.
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