China gets ESG disclosure framework
China has issued its first environmental, social and governance (ESG) disclosure standard, to take effect on 1 June 2022. This ‘Guidance for Enterprise ESG Disclosure’ was developed by the China Enterprise Reform and Development Society (CERDS) in collaboration with companies and other experts in the field. It covers disclosure principles, requirements, and metrics for different types and sizes of companies, to be used to deliver an official ESG report.
The guidance seeks to enable Chinese companies to meet investor demand for ESG data, providing a framework for disclosure that draws on international initiatives but is strongly focussed on harmonisation with existing Chinese laws, regulations, and standards. This raises the critical question of compatibility both with other reporting data within China and with ESG data from other jurisdictions around the world – a crucial challenge for the future, and one that is clearly on the agenda as China considers adoption of International Sustainability Standards Board (ISSB) standards.
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