1、WHITE PAPER ON ESG PRACTICES IN CHINAWHITE PAPER ON ESG PRACTICES IN CHINAShui RuqingChina Central Depository&Clearing Co.,Ltd All good principles should adapt to changing times to remain relevant.Since the concept of ESG was first put forward,its practice has gradually become an effective way of pr

2、omoting sustainable development and a global trend.China has always been an advocate,participant and promoter of global sustainable development.Guided by policies,Chinas ESG practice is in the ascendancy.More and more enterprises and financial institutions have incorporated environmental and social

3、benefits into their business objec-tives,striving to achieve long-term sustainable development with win-win results for all parties.Adhering to the original mission as a key financial institution,CCDC responded to the national 14th Five-Year Plan and the strategic goals of carbon peaking and carbon

4、neutrality.We released a series of green-themed products,researched and established the Green Bond Environmental Impact Disclosure Indicator System,as well as innovated green bond collateral management services.We have been continu-ously improving the sustainable financial services system and have b

5、een widely recognized by authorities and market institutions.Since 2020,CCDC has launched an ESG evaluation system that takes into account international standards and specifications as well as the characteristics of the domestic market.This system pioneers the full coverage of Chinese bond issuers a

6、nd other listed companies,and compre-hensively assists with the high-quality development of Chinas financial market.After many years of dedication in the field of sustainable finance,this year the CCDC and the Internation-al Capital Market Association(ICMA)jointly compiled the White Paper on ESG Pra

7、ctices in China,summarizing the efforts of participants in the ESG ecosystem such as regulators,real enterprises and financial markets.This white paper comprehensively,objectively and fairly demonstrates Chinas ESG practice,shares Chinas ESG-related experience,and provides case studies as reference

8、for advancing sustainable development globally.Although the journey ahead may be long and arduous,with sustained actions,we will eventually reach our destination and embrace a brighter future.CCDC will continue its role as an important national financial market infrastructure.We will continue to con

9、tribute to the high-quality development of Chinas financial market,work together with all stakeholders to meet the opportunities and challenges brought about by the trend of sustainable development,and promote the development of ESG.Bryan Pascoe ICMAThe global agenda to mobilize financial capital to

10、wards sustainable development is clear.Since the ratification of the Paris Agreement in 2016,the theme of sustainability in the financial markets has become a core part in the agenda of public and private sectors around the globe.In order to achieve this goal,the market needs to properly account for

11、 sustainability risks,and consensus needs to be built by global market participants and stakeholders to identify sustainable economic activities.As a frontrunner and global standard setter in the space,ICMAs mission has been to help guide effective regulation through direct engagement with the regul

12、atory community globally to preserve the robustness,credibility,and quality of the market.Through the development of the Green Bond Principles,Social Bond Principles,Sustainability Bond Guidelines and Sustainability-Linked Bond Principles,as well as disclosure frameworks such as the Climate Transiti

13、on Finance Handbook,ICMA has helped harmonise best practices and transparency expectations in the sustainable bond markets,ensuring investor confidence and a credible growth trajectory for sustainable issuance.With one of the worlds largest financial markets,China has an important role to play.In Ch

14、inas sustain-able finance market,growth of onshore and cross-border issuance has been largely attributable to national green finance policies to achieve the governments“dual-carbon”goals of reaching carbon peaking by 2030 and carbon neutrality by 2060.Chinas international cooperation in sustainable

15、finance can be seen with initiatives such as the Common Ground Taxonomy,which maps commonalities between the EU Taxonomy and the China Green Bond Endorsed Project Catalogue,and the China Green Bond Principles,which further harmonize green bond regulations in the domestic bond markets and adopt the 1

16、00%use-of-proceeds approach in line with the global Green Bond Principles.In partnership with the CCDC,we have put together a comprehensive summary of all ESG-related policies that have been issued by financial regulators in China to provide better clarity on national regula-tory developments in the

17、 space.In addition,we examined the development of ESG practices in Chinas financial market to better inform international market participants and stakeholders.It is hoped that this white paper may facilitate further discussion to improve the usability and effectiveness of sustainable finance regulat

18、ions and practices in the global markets.01 Introduction03 Overview of Chinas ESG-related Policy15 Overview of ESG Practices by Chinese Enterprises27 Overview of ESG Practices in Chinas Financial Markets37 Recommendations 41 Conclusions IntoductioESG is an acronym for Environmental,Social,and Govern

19、ance.It was first proposed by the United Nations Environment Programme as a concept in 2004,providing a comple-mentary perspective for evaluating company performance and management in addition to financial performance.Its goal is to promote sustainable development.Sustainable development is a global

20、 issue.The international community has worked together to promote sustainable development by creating inter-governmental coopera-tion,concluding international conventions,and taking actions.More than 100 countries and regions have announced their sustainable development goals with pledges made by st

21、ate leaders or by passing legislation pertaining to their own situations.They have also promoted the creation of ESG development strategies and implementation plans.ESG concepts have also received positive feedback in China.From the Chinese proverb that“the laws of Nature govern all things and that

22、man must seek harmony with Nature.”China has pursued economic development commensurate with its population,resources,and the environment.It has also emphasized the need to“comprehensively strengthen the construction of ecological civilization”and implement new development concepts that emphasize“inn

23、ovative,coordinated,green,and open development for all.”Combining these factors with Chinas pledge of“peaking carbon emission by 2030 and achieving carbon neutrality before 2060,”China takes the concept of sustainable development seriously.Currently,China has been pursuing economic developments cons

24、idering the quality of GDP growth,harmony between humanity and nature,and common prosperity for all.It has focused on promoting prosperity in rural areas,promoting coordinated regional development,upholding and acting on the principle that nature is invaluable,accelerating green transition,enhancing

25、 pollution prevention and control,encouraging diversity,stability and sustainability in our ecosystem,and ultimately achieving the goals of peaking carbon emissions and reaching carbon neutrality.All these have profoundly shown that the concepts of sustainable development and ESG have been adopted b

26、y China and served as significant guidelines for promoting its high-quality economic development.01At the same time,we have observed that although ESG is developing rapidly,it still lacks uniform standards.Different countries,industry organizations,and financial institutions are exploring and practi

27、cing ESG according to their own situations.Against this backdrop,China Central Depository&Clearing Co.,Ltd.(CCDC)and the International Capital Market Association(ICMA)jointly wrote the White Paper on ESG Practices in China(the“White Paper”),which details the ESG development trends in China and provi

28、des ESG case studies in China.We believe that the development of ESG would not be possible without the participation and efforts of relevant policy makers,business entities,financial institutions,and third-party service institutions.It is necessary for these entities to interact with each other and

29、work together to form an effective ESG ecosystem and forge a synergy that promotes ESG development.Therefore,this White Paper focuses on two aspects.First,it presents the policy framework and implementation progress.It introduces Chinas ESG related policies,especially those related to financial mark

30、ets,for the purpose of providing a reference for all participants in this field to understand Chinas ESG policy system.On this basis,it reviews the policy implementation and progress made by business entities and in financial markets respectively.Second,this White Paper demonstrates the efforts of b

31、usiness entities and the innovation of financial markets.From the perspective of the real economy,it presents the actual situation of ESG information disclosure and ESG perfor-mance of Chinese enterprises based on widely collected company-level data.The data covers not only listed corporations,but a

32、lso issuers in Chinas domestic bond market,providing an overview of Chinese enterprises ESG development.From the perspective of financial markets,this White Paper summarizes the progress in Chinas ESG invest-ment and financing instruments and third-party services,and it demonstrates the achieve-ment

33、s in Chinas financial markets supporting the real economy to contribute to sustain-able development.In summary,this White Paper is divided into four parts as follows.Part 1-3 summarize efforts by regulators,enterprises,and financial markets,respectively,regarding Chinas ESG ecosystem.The fourth part

34、 proposes the direction for further ESG development in China.WHITE PAPER ON ESG PRACTICES IN CHINA 02 ESG-related policies ESG-related policies in the financial market Requirement on ESG-related information disclosure03In recent years,Chinas ESG-related policies have continued to devel-op,which has

35、promoted the creation and development of Chinas ESG practice.This part intends to take stock of Chinas ESG-related policies,including financial market-related policies,and introduce the informa-tion disclosure policies,to demonstrate the progress made by China in promoting ESG practice and provide r

36、eference for domestic and foreign investors that participate in ESG investment and financing in China.WHITE PAPER ON ESG PRACTICES IN CHINA 04改为“中国ESG相关政策概览”。政策部分的正文也相应修改。Figure 1-1 Chinas ESG-Related Policy FrameworkEnterprise Practice GuidanceIncentive and Restraint MechanismInformation Disclosure

37、 PolicyClassification CriteriaFinancial ProductsInstitution Investment GuideIncentive and Restraint MechanismInformation Disclosure PolicyFinancial InstitutionFinancial InstrumentESG-related policies in the financial marketBusinessEntitiesIn recent years,Chinas ESG-related specific policies have eme

38、rged rapidly.The policies cover for business entities,financial institutions,and financial instruments.Content-wise,the policies can be divided into three categories.The first category is“high-level guidance,”which guides the business entities or financial institutions to understand the concept of E

39、SG.The second category is the“incentive mechanism,”which provides preferential policies for the business entities and financial institutions that adopt ESG in financing.The third category is“information disclosure,”which aims to improve the transparency of ESG-related practices through improving inf

40、or-mation disclosure mechanisms(see Figure 1-1 for Chinas sustainable policy frame-work).The policies cover all three aspects of environment,social,and governance.ESG-related policies05WHITE PAPER ON ESG PRACTICES IN CHINA 06In general,Chinas ESG-related policies demonstrate the following characteri

41、stics:First,Chinas ESG related policies are mainly composed of departmental regulations and industry self-discipline rules.The policies originate from various national ministries,industry associations,and self-regulatory organizations.The policies usually are initiated to promote sustainable develop

42、ment in a certain industry or field and form a more practical implementation plan.Second,Chinas ESG-related policies started late but developed rapidly.At present,the types of ESG-related policies include high-level guidance,implementa-tion guidelines,incentive and restraint mechanism,applied to bus

43、iness entities and finan-cial institutions.Third,ESG-related policies for business entities and financial sector go hand in hand and develop in a coordinated manner.Business entities are the main vessels for implementing the concepts of ESG,and ESG-related policies for business entities were the fir

44、st to be released,focusing on pollu-tion prevention and low-carbon transition.As an important force for resource allocation,the financial market is an important channel for promoting the implementation of ESG concepts.ESG-related policies for financial institutions and financial instruments have eme

45、rged rapidly as a result.ESG-related policies in the financial market are thus also the focus of this White Paper.1 In this white paper,the National Development and Reform Commission abbreviated as NDRC,the Ministry of Industry and Information Technology of the Peoples Republic of China abbreviated

46、as MIIT,and the Ministry of Finance of the Peoples Republic of China abbreviated as MOF.Ministry of Natural Resources of the Peoples Republic of China abbreviated as MNR,Ministry of Ecology and Environment of the Peoples Republic of China abbreviated as MEE,and Ministry of Housing and Urban-Rural De

47、velopment of the Peoples Republic of China abbreviated as MOHURD,The Peoples Bank of China abbreviated as PBC,China Banking and Insurance Regulatory Commission abbreviated as CBIRC,China Securities Regulatory Commission abbreviated as CSRC,National Energy Administration abbreviated as Banking and In

48、surance Regulatory Commission,National Energy Administration abbreviated as NEA.The former Ministry of Environmental Protection of the People s Republic of China abbreviated as the former MEE,the former China Banking Regulatory Commission abbreviated as the former CBRC,and the former China Insurance

49、 Regulatory Commission abbreviated as the former CIRC.National Association of Financial Market Institutional Investors abbreviated as NAFMII,Asset Management Association of China abbreviated as AMAC,Insurance Asset Management Association of China abbreviated as IAMAC,Shanghai Stock Exchange abbrevia

50、ted as SSE,and Shenzhen Stock Exchange abbreviated as SZSE ESG-related policies in the financial marketSource:Compiled from policy documents in the public domainTable 1-1 ESG-related investment guidance documents in recent years Year Institution Document Name Document Content2001920182019

51、Banking and insurance institutions are required to promote green finance from a strategic perspective.This is the first time that banking and insurance institutions should incorporate environmental,social,and governance(ESG)requirements into their management processes and comprehensive risk manageme

52、nt procedures.Financial institutions are required to invest more funds in key economic and social fields and weak areas such as small and micro enterprises.Financial institutions are required to invest more funds in rural revitalization.The guidelines define green investment,encourage the fund indus

53、try to conduct green investment,and encourage fund managers to use the published green standards to screen investment targets when conducting green investment.Banking and financial institutions are required to actively promote green credits and increase financial support for the green economy,low-ca

54、rbon economy,and circular economy.The guidelines provide a clear definition of green trusts,encourage trust companies to develop green trusts,and require trust companies to follow the published green standards to screen investment targets when developing green trusts.Former CBRCCBIRCPBC,CBIRC,CSRC,N

55、DRC,MOFPBC,CBIRC,CSRC,MOF,MOAAMAC CTAGuidelines for Green CreditsGreen Finance Guidelines for Banking and Insurance Sectors“Opinions on Further Deepening Financial Services for Small and Micro Enterprises”and other documents“Guidelines on Finance Serving Prosperity in Rural Areas”and other documents

56、Green Investment Guidelines(For Trial Implementation)Green Trust GuidelinesIn 2016,the Peoples Bank of China,the Ministry of Finance,the National Development and Reform Commission,the former Ministry of Environmental Protection,the former China Banking Regulatory Commission,China Securities Regulato

57、ry Commission,and the former China Insurance Regulatory Commission jointly issued the Guidelines for Establishing the Green Financial System,which established the top-level structure of Chinas green financial system.Since this establishment,various types of high-level guidance,incentive and restrict

58、ive mechanisms,information disclo-sure systems,and financial instrument guidance have been introduced,covering the main aspects of the ESG investment and financing process.The ESG-related policy system in Chinas financial market has continued to develop.High-level guidance has been launched to guide

59、 the flow of funds to ESGChinas ESG-related guidelines concentrate on commercial bank credit.In order to promote the implementation of the national energy conservation and emission reduction strategy,banks started in 2007 to take into account,when conduct-ing credit reviews,whether and how the corpo

60、rate borrowers have implemented environmental protection policies.In 2012,the former CBRC issued the Guidelines for Green Credit to encourage banks to actively grant green loans.In 2022,the CBIRC issued the Green Finance Guidelines for Banking and Insurance Sectors to further guide banking and insur

61、ance institutions to incorporate environmental,social,and governance requirements into their management process-es and comprehensive risk management systems from a strategic perspective.At the same time,policies for guiding bank loans to small and micro enterprises and rural revitalization continued

62、 to be introduced in order to encourage financial institutions to fulfil their social responsibilities.After 2018,various ESG-related investment guidelines for asset management products were issued.In 2018,the Asset Management Association of China(AMAC)issued the Green Investment Guidelines(For Tria

63、l Implementation)and in 2019,and China Trustee Association(CTA)issued the Green Trust Guidelines,to promote standardization,normaliza-tion,and sustainability among ESG-related asset management products.07Source:Compiled from policy documents in the public domainFirst,by incorporating ESG in the perf

64、ormance evaluation for financial institutions.After 2012,the former CBRC,the PBC,and the MOF succes-sively released the Green Credit Key Performance Indicators,Green Finance Assessment Plan for Banking Institutions,Performance Evaluation Rules for Commercial Banks and other documents.With these docu

65、ments,the framework for evaluating banks started to take into account their contribute to ecological civilization and social responsibilities.The scale of green loans,green bonds,small and micro enterprise loans,and rural revitalization loans have become performance evaluation indicators for banks(s

66、ee Table 1-2).Third,by continuing to improve the financial statistical system.Since 2013,the former CBRC and the PBC have established the green credit statistical system and continu-ously revised it to gather data for green finance-related incentive policies and to monitor financing support for a gr

67、een low-carbon economy(see Table 1-3).Fourth,by introducing local incentive policies.A number of local governments and financial regula-tors have encouraged the development of green finance by introducing local incentive policies,such as providing financial incentives,conducting reviews and evaluati

68、on,introducing rewards and punishments,and establishing local green finance innovation pilot zones.Second,by promoting policies such as tax incentives and interest discounts.These policies include preferential tax policies to exempt value-added tax on interest income from and offer pretax deduction

69、of provisions for loans granted to small and micro enterprises and rural areas.The policies also include the implementation of preferen-tial deposit reserve ratios for qualified banks and the creation of relending and rediscounting policies for loans supporting the development of agriculture,small a

70、nd micro enterprises,and carbon emission reduction projects.Various incentive mechanisms introduced to spur interest in ESG-related investmentsWHITE PAPER ON ESG PRACTICES IN CHINA 08Table 1-2 ESG-related financial institutions performance evaluation incentive policiesYear Institution Document Name

71、Document Content200222Former CBRCFormer CBRCPBCPBCMOFPBC,CBIRCCBIRCAll banking institutions are required to facilitate and thoroughly carry out self-assessment of their green credit implementation following the requirements of the Green Credit Key Performance Indicators,and sub

72、mit the results of the self-assessment to the former CBRC.Green credit performance evaluation is carried out on national banking deposit financial institutions,and the evaluation results are incorporated into the macro prudential assessment(MPA).The scope of quantitative assessment is expanded to gr

73、een loans,green bonds and other financial institution businesses to guide financial institutions in increasing the allocation of green assets.The construction of an ecological civilization and loans for small and micro enterprises are included among the evaluation indicators.Financial institutions s

74、upport for rural revitalization is evaluated through loan scale,structure,system construction,financial innovation,etc.Banking institutions are required to set social responsibility indicators to evaluate their support for energy conservation,emission reduction,and environmental protection.The suppo

75、rt of commercial banks to small and micro enterprises is evaluated through loan growth,loan cost,asset quality,and the design of policies and procedures.Notice of the China Banking Regulatory Commission on Issuing the Supervisory Guidelines for Performance Appraisal of Banking Financial Institutions

76、Notice of the China Banking Regulatory Commission on Key Performance Indicators of Green Credit ImplementationNotice on Conducting Green Credit Performance Evaluation of Banking Depository Financial Institutions(repealed)Green Finance Assessment Program for Banking InstitutionsPerformance Evaluation

77、 Rules for Commercial BanksMeasures for Evaluation and Assessment of Services of the Financial Institutions for Rural RevitalizationMeasures for Supervision and Evaluation of Commercial Banks Financial Services for Small and Micro Enterprises(trial)Source:Compiled from policy documents in the public

78、 domainTable 1-3 Statistical Policies of ESG-Related Financial InstitutionsYear Institution Document Name Document Content20020Former CBRCCBIRCPBCPBCNotice of the General Office of CBRC on the Submission of Green Credit Statistics Form(repealed)Notice on the Policies for the Green Financi

79、ng Statistical SystemNotice on Establishing a Special Statistical System for Green Loans(repealed)Notice on Revising the Special Statistical System of Green LoansExpand the scope of statistics to include both on and off balance sheet financing and collect statistics on low-carbon economy financing,c

80、ircular economy financing,climate financing,environmental equity financing,etc.Clarify the statistical dimensions,coverage,standards,and implementation requirements of green loans.Expand the statistical scope of green loans and add metrics from the Guiding Catalogue of Green Industries(2019 Edition)

81、.Collect statistics on loans for 12 types of energy conservation and environmental protection projects and their impacts on energy conservation and emission reduction.Relevant classification standards are gradually harmonised,and sustainable bonds emerge quickly The first edition of the Green Bond P

82、rinciples were published by ICMA in 2014,representing the global consensus for the issuance of green bonds.Subsequently,Chinas green bond market started in 2015.Using the concept as defined by the global standard,a number of Chinese authorities issued multiple guidelines to encourage corporates and

83、financial institutions to issue green bonds.In summary,green bonds in Chinas onshore market are regulated by different authori-ties and subject to different rules respectively.The different authorities imposed two different sets of definitions of green for green bonds and different requirements on t

84、he percentage of proceeds that should be used for green projects.To unify the definitions of green for green bonds and gradually achieve convergence with global standards,the PBC,the NDRC,and the CSRC jointly issued the Green Bond Endorsed Projects Catalogue(2021 Edition)in 2021.In a call for furthe

85、r harmonisation of the domestic green bond regulations,the China Green Bond Standard Committee announced the Chinas Green Bond Principles(China GBP)in July 2022.Based on the ICMA Green Bond Principles,the China GBP clearly stipulates the definition of green bonds and the four core components of gree

86、n bonds and articulates that 100%of the proceeds of a green bond should be used for green projects.Over the years,guidance documents for various subtypes of sustainable bonds have also been published,further enrich-ing Chinas ESG sustainable financial product system(see Table 1-4).NAFMII published i

87、n May 2021 a Q&A guidance for sustainability-linked bonds based on ICMAs Sustainability-Linked Bond Principles and in November 2021 a Q&A document for piloting social and sustainability bonds in the interbank bond market based on ICMAs Social Bond Princi-ples and Sustainability Bond Guidelines.2 Est

88、ablished under the guidance of PBC,CSRC and other authorities,China Green Bond Standard Committee consists of self-regulatory organisations and selected private sector institutions.09Table 1-4 Relevant Policies of Chinas ESG Themed Bonds200022222022Regardi

89、ng the Issuance Management of Green Financial BondsNotice on Launching the Pilot Program of Green Corporate BondsNotice on Launching the Pilot Program of Green Corporate BondsGuiding Opinions of the China Securities Regulatory Commission on Supporting the Development of Green BondsGreen Debt Financi

90、ng Instrument Business Guidelines for Non-financial EnterprisesGreen Bond Endorsed Projects Catalogue(2021 Edition)Notice on Clarifying the Carbon Neutral Bonds Mechanism Ten Questions and Answers on Sustainability-Linked Bonds(SLB)Q&A on Piloting of Social Bonds and Sustainability BondsBusiness Gui

91、delines for Innovative Corporate Bonds No.1-Green Corporate Bonds(Revision 2021)Guidelines for the Application of the Examination Rules for the Issuance and Listing of Corporate Bonds of the Shanghai Stock Exchange No.2Corporate Bonds of Certain Varieties(revised 2022)Notice on Conducting Pilot Inno

92、vation Related to Transition BondsChina Green Bond PrinciplesGuidelines on the Issuance of Green BondsDefine and classify green bonds;encourage companies to issue green enterprise bonds and clarify bond issuance requirements.Encourage companies to issue green corporate bonds and clarify the requirem

93、ents for bond issuance.Clarify the requirements on green corporate bond issuers,use of proceeds and disclosure.Encourage companies to issue green debt financing instruments and clarify bond issuance requirements.The document unifies the two sets of definitions of green for green bonds Clarify the de

94、finition and issuance requirements for carbon neutral bonds.Based on ICMA s Sustainability-Linked Bond Principles,clarify the definition and issuance requirements for Sustainabili-ty-Linked Bonds.Based on ICMA s Social Bond Principles and Sustainability Bond Guidelines,clarify the definition and iss

95、uance requirements for social bonds and sustainability bonds.Provide definition and issuance requirements for carbon neutral green corporate bonds and blue bonds in the SZSE bond market.Provide definition and issuance requirements of ESG-themed bonds such as carbon-neutral green corporate bonds,blue

96、 bonds,and transition bonds in the SSE bond market.The document provides the definition and issuance requirements for transition bonds.Stipulate four core elements of green bonds:use of proceeds,project evaluation and selection,management of proceeds,and information disclosure.It also clearly requir

97、es 100%of the proceeds of green bonds to be used for green projects.Encourage financial institutions to issue green bonds and clarify the requirements for bond issuance.PBCNDRC SSESZSEYear Institution Document Name Document ContentCSRCNAFMIIPBC,NDRC,CSRCNAFMIINAFMIINAFMIISZSESSENAFMIIGreen Bond Stan

98、dards CommitteeSource:Compiled from policy documents in the public domainWHITE PAPER ON ESG PRACTICES IN CHINA 10Requirement on information disclosure is an important part of the ESG-related policy system.With the mainstreaming of the ESG concept in China,ESG-related information disclosure policies

99、have been developed.This section summariz-es the information disclosure policies,and the details are shown in the appendix.The entities disclosing ESG-related information are mainly high-polluting enterprises,centrally adminis tered state-owned enterprises and security issuersThe national environmen

100、tal protection bureaus were the first to issue relevant policies,which required the environmental information disclosure from key pollutant discharging enterprises,listed companies,and bond issuers.The China Securi-ties Regulatory Commission(CSRC)and the Shanghai and Shenzhen Stock Exchanges also is

101、sued relevant guidelines requiring listed companies to disclose information according to the requirements of the environmental protection bureaus and to clarify the disclosure requirements in terms of social responsibility and corporate governance.The authorities regulating green and sustainable bon

102、ds also issued relevant guidelines,requiring bond issuers to disclose information on use of proceeds,environmental impacts,etc.In addition,State-owned Assets Supervision and Administration Commis-sion of the State Council(SASAC)has successively issued policies to guide centrally managed state-owned

103、enterprises to fulfill their social responsibilities,improve corporate governance,and encourage regular issuance of social responsi-bility reports or sustainable development reports.There are increasing requirements for financial institutions to make ESG-related information disclosureIn 2021,the Peo

104、ples Bank of China(PBC)issued the Guidelines for Environmental Information Disclosure by Finan-cial Institutions,the Work Plan for Promoting Environmental Information Disclosure of Financial Institutions in the Green Finance Reform and Innovation Pilot Zone,the Operating Manual for Environmental Inf

105、ormation Disclosure of Banking Financial Institutions(trial),the Technical Guidelines for Carbon Accounting of Financial Institutions(trial),and other documents to encourage financial institutions to actively disclose environmental risk management,environ-mental impacts,and carbon emissions generate

106、d by business operations.There are relatively more mandatory information disclosure requirements on environmental performance and corporate governance,and disclosure of social responsibility information is encouragedIn terms of“environment”,according to the Administrative Measures for the Legal Disc

107、losure of Enterprise Environ-mental Information,key pollutant discharging units,companies that implement mandatory cleaner production audits,and other enterprises that may have a greater impact on the environment must disclose information including pollutants,carbon emissions,and information of viol

108、ating ecological environment laws.Companies that issue securities in the securities market must disclose relevant information on climate change,environment protection,and other related information of the projects they finance and use the funds raised according to the requirements of the securities m

109、arket.Issuers of carbon neutral bonds need to disclose environmental information on the underlying projects,focusing on environmental impacts,calculation methods,and reference points.In terms of“governance”,the mandatory information required to be disclosed include ownership structure,board composit

110、ion and performance of duties,salary structure,related party transactions,and internal control system.In terms of“social”,enterprises are encouraged to disclose information on employee protection,product quality,community relations,etc.in social responsibility reports.ESG information disclosure poli

111、cies applied with incentives and penaltiesAccording to the Administrative Measures for the Legal Disclosure of Enterprise Environmental Information,the relevant competent authority may impose a fine of RMB10,000 to RMB100,000 on enterprises that do not disclose environmental information in accordanc

112、e with the provisions of the Measures or disclose untrue or inaccurate environ-mental information.Enterprises with good social responsibility and enterprises that actively disclose corporate social responsibility reports can be preferentially included in the corporate governance segment of the Shang

113、hai Stock Exchange,becoming more attractive to investors.Requirement on ESG-related information disclosure11In general,the European Union,the United States and China have developed ESG-related information disclosure policies,which specify the disclosure entities,disclosure contents,the degree to whi

114、ch such disclosures are compulsory,and potential penalties.The EU,the US and China have gradually expanded the disclosing entities from business entities to financial institutions.The EU and the US have set more specific and mandatory information disclosure requirements for financial institutions.Fi

115、nancial institutions should disclose the impact of ESG factors on asset returns and the ESG impacts of investments in investment documents and official websites.Chinas disclosure regulations for financial institutions are voluntary,focusing on the environmental risk management of financial instituti

116、ons and the possible impact of invested assets on the environment.In terms of content for disclosure,there are differences in the mandatory disclosure content required by the EU,the US and China.The mandatory disclosure metrics of the EU and the US mainly include greenhouse gas emissions,pollutant e

117、missions,insider control,corruption,transparency of proxy voting system,human rights and rights of employees,etc.Chinas mandatory disclosure metrics focus on internal control systems related to an enterprises environmental management,pollution prevention,performance of directors and super-visors,and

118、 related transactions,etc.WHITE PAPER ON ESG PRACTICES IN CHINA 12BOX:Comparison of ESG information disclosure policies among the European Union,the United States and ChinaTable 1-5 Major Policies in EU Related to ESG Information DisclosureYear Document name Main content200720020202020212

119、022European Sustainability Reporting Standards(ESRS)(Draft for Comments)Shareholders Rights Directive(SRD),(revised in 2017,known as SRD II)Listed enterprises are required to disclose matters related to the company s voting and details of related transactions.Enterprises are required to pay attentio

120、n to the disclosure of information related to environment and corporate social responsibility.Financial products must disclose ESG-related information,including the environmental benefits of financial products in terms of carbon emission reduction,greenhouse gas emission reduction,and the characteri

121、stics of assets in corporate social responsibility.Classification regime for sustainable investment of financial institutions Usage of benchmark index,data and other information for sustainable investment disclosure.Building on NFRD,the scope of disclosing entities will be expanded to all large and

122、listed enterprises,and more detailed requirements for information disclosure will be introduced.It will introduce disclosure requirements for sustainability report.Corporates in scope are required to publish sustainability report starting from 2024.Enterprises are required to disclose information re

123、lated to the environment,anti-corruption,human rights protection,etc.A Renewed EU Strategy 2011-14 for Corporate Social ResponsibilityNon-financial Reporting Directive(NFRD)Regulation 2019/2088 on sustainabilityrelated disclosures in the financial services sector(SFDR)Regulation 2020/852 on the esta

124、blishment of a framework to facilitate sustainable investment(Taxonomy Regulation)Regulation 2019/2089 amending Regulation(EU)2016/1011 as regards EU Climate Transition Benchmarks,EU Paris-aligned Benchmarks and sustainability-related disclosures for benchmarks(CBR)Corporate Sustainability Reporting

125、 Directive(CSRD)(Under development)13Table 1-6 Major Policies in the US Related to ESG Information DisclosureYear Document name Main content0201220172022Regulation S-K（Last revised in 2020）Security issuers are required to disclose information related to corporate governance in periodic re

126、ports providing specified content in specific formats.The majority of upstream production entities and downstream emitters(large facilities with annual CO2 emissions of 25,000 metric tons or more)are required to report GHG emissions.Issuers operating mines are required to disclose information on inc

127、idents,including the extent to which mine safety and employee health are compromised,illegal or administrative penalties that are related to coal mines or other mining operations.Proposes that securities issuers be required to disclose business-related climate risks,risk management measures,GHG emis

128、sions and other information in their registration materials and annual reports.Provides guidance for securities issuers to assess risks related to climate change in periodic reports and disclose information such as the necessary capital expenditures to reduce greenhouse gas emissions.Mandatory Green

129、house Gas Reporting RuleGuidance Regarding Disclosure Related to Climate ChangeMine Safety Disclosure（Section 1503 of the Dodd-Frank Wall Street Reform and Consumer Protection Act）The Enhancement and Standardization of Climate-Related Disclosures for Investors(proposed rules)ESG Reporting GuideProvi

130、des guidelines for ESG information disclosure of listed companies.WHITE PAPER ON ESG PRACTICES IN CHINA 14 The Status Quo of ESG information disclosure by Chinese enterprises ESG performance of Chinese enterprises15This part analyse two aspects:the ESG information disclosure and ESG performance of C

131、hinese companies.In terms of ESG information disclosure,this part analyses how many companies disclose ESG-relat-ed reports,and what the companies disclose.In terms of ESG perfor-mance,it mainly analyses the actual ESG performance of Chinese companies in recent years based on the data disclosed by t

132、he compa-nies.The scope of companies being analysed are the issuers of publicly offered credit bonds in Chinas domestic bond market and A-share listed companies from 2018 to 2021.There are a total of 8,660 sample companies,including 5,069 bond issuers and 4,070 listed companies3.3 There are 479 ente

133、rprises that are both listed companies and bond issuers.WHITE PAPER ON ESG PRACTICES IN CHINA 16 The proportion of enterprises disclosing ESG-related reports has increased year by yearIn addition to periodic reports such as annual reports and issuance documents,ESG-related reports are the main carri

134、ers for enterprises to proactively disclose ESG information.Statistics show that the proportion of companies making ESG disclosures4has increased from 16%in 2018 to 19%in 2021,and companies willingness to disclose actively has increased.In 2021,the disclosure ratio of listed companies is higher than

135、 that of bond issuers,which was 28%and 16%respectively(see Figure 2-1).Among the ESG-related reports published by enterprises,more than 80%of the disclosure came from corporate social responsibility reports,while the proportion of other types of reports such as environ-mental,social and governance r

136、eports is increasing.The Status Quo of ESG information disclosure by Chinese enterprises4 The social responsibility report,the environmental social and governance report,the sustainability report and the environmental report are the types of ESG-related reports that the enterprise has actively discl

137、osed.Among them,the Environmental,Social and Governance Report is the report prepared by the enterprise according to the Guidance on Environmental,Social and Governance Reports of HKEX;the other three reports are ESG-related information disclosure made by enterprises according to their own condition

138、s,and there is no uniform requirement for the disclosure content.30%25%20%15%10%5%0%Disclosure ratio23.20%15.47%25.00%15.24%25.99%16.00%27.87%16.41%2018 2019 2020 2021Figure 2-1 Enterprise ESG DisclosureListed company Bond issuerData source:CCDC17 ESG-related reports need to be disclosed in a more t

139、imely mannerEnterprises usually publish ESG-related reports for a specific year in the first four months of the following year.In 2021,the proportion of listed companies and bond issuers that issue their ESG-re-lated reports within four months were 95%and 69%respectively.Additionally,nearly 20%of bo

140、nd issuers published their reports in the fourth quarter of the following year.The proportion is higher in 2021 than in 2018.The timeliness of these disclosures needs to be improved(see Figure 2-2).Figure 2-2 Time Distribution of Enterprise ESG Report DisclosureData source:CCDCJan to Apr May to Jun

141、Jul to Aug Sep to Dec100%90%80%70%60%50%40%30%20%10%0%Listed company Bond issuer2018 20212018 2021Proportion of disclosure reports91.09%95.24%73.46%68.52%7.67%3.57%16.48%17.92%WHITE PAPER ON ESG PRACTICES IN CHINA 18 The disclosure ratio of ESG-related reports in different industries varies greatlyI

142、nstructed by policy,the disclosure ratio of bond issuers in the eight energy-intensive industries is higher than the average level of bond issuers(For example,the disclosure ratio in the petrochemical and building materials industries exceeded 50%,and other industries exceeded or approached 30%)(see

143、 Table 2-1).The disclosure ratio of listed companies in eight energy-intensive industries is higher than the average disclosure ratio of all types of listed companies(see Table 2-2).Table 2-2 Disclosure Ratio of ESG-related Reports of Listed Companies in Eight energy-intensive IndustriesData source:

144、CCDC2018 2019 2020 2021SteelPaper and pulpElectricityPetrochemicalNonferrous metalAviationBuilding materialChemical industryListed companies fromall industries44.12%48.15%47.89%45.45%44.68%29.69%25.93%18.34%23.20%61.76%59.26%54.93%45.45%42.55%31.25%27.16%22.19%25.00%61.76%59.26%54.93%45.45%42.55%31.

145、25%27.16%22.19%25.99%61.76%59.26%54.93%45.45%42.55%31.25%27.16%22.19%27.87%Table 2-1 Disclosure Ratio of ESG-Related Reports of Bond Issuers in Eight energy-intensive IndustriesData source:CCDC2018 2019 2020 2021PetrochemicalBuilding materialAviationSteelPaper and pulpNonferrous metalElectricityChem

146、ical industryBond issuers from allindustries75.00%70.00%33.33%46.67%40.00%53.85%35.79%25.53%15.47%75.00%55.00%51.85%46.67%40.00%38.46%36.84%29.79%15.24%75.00%55.00%51.85%46.67%40.00%38.46%36.84%29.79%16.00%75.00%55.00%51.85%46.67%40.00%38.46%36.84%29.79%16.41%19Note:Disclosure ratio of a bond issuer

147、 with certain size of total assets=total number of enterprises with ESG-related reports disclosed with this size of total assets/total number of enterprises with this size of total assetsData source:CCDCNote:Disclosure ratio of listed companies with certain market value=total number of enterprises w

148、ith ESG-related reports disclosed with this market value/total number of enterprises with this market valueData source:CCDC The disclosure ratio of ESG-related reports of large enterprises is higherBond issuers with larger balance sheet show a higher disclosure ratio of ESG-related reports.For bond

149、issuers with assets of more than RMB200 billion on their balance sheet,the disclosure ratio of ESG-related reports was found to be more than 50%in 2021,significantly higher than in 2018.The disclosure ratio of ESG-related reports of bond issuers with total assets of less than RMB50 billion was about

150、 10%(see Figure 2-3).The disclosure ratio of ESG-related reports of listed companies with a market value of more than RMB100 billion exceeded 90%in 2021.For listed companies with a market value of less than RMB10 billion,this was less than 30%(see Figure 2-4).Figure 2-4 Disclosure Ratio of ESG-Relat

151、ed Reports of Listed Companies with Different Market Values2018 2021100%90%80%70%60%50%40%30%20%10%0%Lower than 5 billion 5-10 billion 10-50 billion 50-100 billion More than 100 billionDisclosure ratioMarket value of listed companies8.74%13.38%22.65%44.15%73.98%93.80%18.08%38.10%55.73%75.52%2018 202

152、1Figure 2-3 Disclosure Ratio of ESG-Related Reports of Bond Issuers with Different Sizes of Balance Sheets60%50%40%30%20%10%0%Less than 50 billion 50-200 billion 200-500 billion More than 500 billionDisclosure ratioSize of total assets of the bond issuer13.81%25.40%46.70%47.34%56.21%52.36%15.11%28.4

153、8%WHITE PAPER ON ESG PRACTICES IN CHINA 20 Environmental performance and social responsibility disclosure sources are largely corporate social responsibility reports and annual reports,and corporate governance disclosure are mainly in the annual reports5Corporate social responsibility reports and an

154、nual reports account for about 90%of the ways enterprises disclose environmental and social related information.The ratio of other types of reports issued by enterprises,however,has increased significantly(see Figure 2-5 and Figure 2-6).Information related to corporate governance is mainly disclosed

155、 through the annual report.2018 2021Report TypeReport Type100%90%80%70%60%50%40%30%20%10%0%Report usage ratioFigure 2-6 Social-related Disclosure-Breakdown by SourceData source:CCDC5In this white paper,information related to environmental performance refers to information disclosed by companies with

156、 regard to their environmental management ability,green development,resource utilization,pollution prevention and ecological protection;social responsibility related information refers to the information disclosed by the enterprise to protect the rights and interests of employees,suppliers,customers

157、,investors,communities,society and other stakeholders.Finally,corporate governance related information refers to the protection of shareholders rights and interests,the governance ability of directors,supervisors and senior executives,incentive mechanism,information disclosure and management standar

158、dization disclosed by enterprises.85.07%97.89%85.98%93.34%92.59%4.93%15.12%2.58%5.15%0.34%1.01%94.85%89.39%61.86%47.41%11.99%83.01%33.05%1.10%15.79%Figure 2-5 Environmental-Related Disclosure-Breakdown by SourceData source:CCDC2018 2021100%90%80%70%60%50%40%30%20%10%0%Annual ReportReport usage ratio

159、Enterprise Social Responsibility ReportEnvironmental,Social and Governance ReportEnvironmental ReportSustainability ReportEnterprise Social Responsibility ReportAnnual ReportEnvironmental,Social andGovernance ReportSustainability ReportEnvironmental Report21 The disclosure ratio of environmental and

160、 social-related topics has increased,and the depth of governance related disclosure continues to improveIn terms of environmental performance,companies disclosure of environmental strategy and planning,green business,water resources utilization and carbon emission has increased compared with 2018.In

161、 2021,the disclosure rate of the above topics was about 10%(see Figure 2-7).The disclosure rate of topics related to energy utilization,pollution preven-tion and control was relatively low.In terms of social disclosure,the disclosure rate was around 15%(see Figure 2-8),higher than that in 2018.The d

162、isclosure rate of governance-related information is relatively high,and the depth of disclo-sure has continued to improve,as the number of indicators disclosed about a single topic has increased.16.30%11.50%10.25%11.31%7.09%7.09%10.45%10.45%2018 2021Figure 2-7 Disclosure rate of Environmental-Relate

163、d InformationNote 1:This figure shows the environmental related topics that have good level of disclosureNote 2:the disclosure rate on a specific topic=the total number of enterprises that disclose at least one metric about this topic/the total number of enterprises to which the said topic is releva

164、ntData source:CCDC20%15%10%5%0%Disclosure rateGreen strategy and planningGreen main businessWater resources utilizationCarbon emissionFigure 2-8 Disclosure rate of Social Related InformationNote:Due to the trivial difference in the disclosure rate of social related topics,this figure shows the discl

165、osure rate of representative topics in three dimensions,namely employee,supplier and customer,community and social contribution.Data source:CCDC2018 202120%15%10%5%0%Disclosure rate13.07%17.36%13.07%17.36%7.91%13.48%Employee s basic rights and interests protectionAfter-sales service Response policie

166、sWHITE PAPER ON ESG PRACTICES IN CHINA 220.580.570.550.54 ESG performance of Chinese enterprisesFigure 2-9 Trends of indicators representative of enterprises environmental performanceData source:CCDC01000800600The number of companiessetting carbon emissiontargets and measures2018 2019 202

167、0 2021 In terms of environmental performance,the environmental management capabilities,energy conservation and emission reduction,and pollution prevention performance of the sample enter-prises have improved significantlyAt present,addressing environmental pollution and controlling carbon emission i

168、ntensity are two of the major tasks facing China.Therefore,this white paper has selected total energy consumption,pollutant emission and carbon emission reduction measures as the key indicators to analyse their environmental performance at the corporate level.From 2018 to 2021,the level of total ene

169、rgy consumption,wastewater and waste gas emissions and other indicators representing pollution prevention and control has declined year by year.In the 8,660 samples,the number of companies that set carbon emission targets and measures has increased from around 840 to nearly 1,400.Chinese firms have

170、worked to meet policy requirements with increasing emphasis on low-carbon transition.0.580.570.560.550.54Comprehensive energyconsumption per unit producttons of standard coal2018 2019 2020 202137523 In terms of social,the protection of the rights and interests of stakeholders has been enh

171、ancedAccording to the data,companies have enhanced the protection of employees,customers,suppliers,communities,creditors and other stakeholders.From 2018 to 2021,the proportion of enterprises organising labor union activities,customer satisfaction surveys,supplier social responsibility assessments,a

172、nd investment and construction projects for the community continued to increase(see Figure 2-10).With increasing number of defaults in Chinas bond market,question of whether bond issuers have set up investor protection clauses has become an important indicator.In recent years,the types of investor p

173、rotection clauses in China have been continuously enriched,from four types to 21 types.Among them,cross-default clauses and conditions prece-dent are the most important types of clauses,and the set-up ratio is at about 20%(see Figure 2-11).Figure 2-11 Setting up investor protection clauses in the bo

174、nd prospectusNote:The data of this figure is about credit bonds publicly issued in 2018 and 2021,including corporate bonds,medium-term notes,short-term financing bonds,ultra-short-term financing bonds,and financial bonds other than inter-bank deposit receipts.Data Source:CCDC2018 2021RatioCross Prot

175、ection ClauseConditions precedentChange of Ownership ClauseDebt Service GuaranteeCommitment ClauseCollateral and Pledge20.20%21.70%23.10%2.60%6.20%0.60%0.00%23.30%0.00%0.00%Types of investor protection clauses90%80%70%60%50%40%The Proportion of enterprisescarrying out laborunion activities2018 2019

176、2020 202120%18%16%14%12%10%8%The Proportion ofenterprises carrying outcustomer satisfication surveys2018 2019 2020 2021The proportion of enterprisescarrying out communityinvestment and construction2018 2019 2020 202120%18%16%14%12%10%8%The proportion of enterprises assessing suppliers socialresponsi

177、bility assessments2018 2019 2020 202120%18%16%14%12%10%8%Figure 2-10 Trends of indicators representative of social performanceData source:CCDC60.65%11.59%12.54%14.72%17.08%11.61%10.85%12.11%14.09%16.54%12.59%14.73%17.10%60.86%72.03%77.71%WHITE PAPER ON ESG PRACTICES IN CHINA 24 In terms of governanc

178、e,the adoption of corporate governance practices and the quality of information disclosure have been improvedFrom the data disclosed by the enterprises in scope of this research,the majority of Chinese listed companies have established the framework of three meetings(the shareholders meeting,board o

179、f directors,and board of supervisors),and the quality of the three meetings has improved;the proportion of bond issuers having independent audit committee and remuneration committee has been rising(see Figure 2-12).The proportion of enterprises that disclose externally audited periodic reports on ti

180、me with unqualified opinions has generally increased(see Figure 2-13).First quarter report Mid year reportThird quarter report Annual report2018 2019 2020 2021100%90%80%70%60%50%84.81%84.81%87.26%67.60%71.25%73.93%79.29%70.21%71.30%68.39%62.94%88.61%83.19%96.34%90.40%93.35%82.58%83.59%84.27%Figure 2

181、-12 Proportion of Bond Issuers Having Independent CommitteesData source:CCDC2021829.48%25.53%23.73%21.23%Proportion of enterprises withaudit committee27.98%24.87%22.89%20.65%20218Proportion of enterprises with remuneration committeeFigure 2-13 Reliability and Completeness of En

182、terprise Information DisclosureNote:if the first quarter report,the mid-year report,the third quarter report and the annual report of an enterprise are published before April 30,August 31,October 31 of the current year and April 30 of the next year,it is considered to be a timely disclosure.Data sou

183、rce:CCDC85%84%83%82%Proportion of enterprises withunqualified audit opinions2018 2019 2020 2021Proportion of enterprisesdisclosing in time82.39%25WHITE PAPER ON ESG PRACTICES IN CHINA 26 ESG investment ESG-related financing instruments ESG-related third-party evaluation and data service27ESG conside

184、rations have developed rapidly in Chinas financial market owing to government policy action.The types of ESG-themed funds,bank wealth management products and other asset management prod-ucts continue to develop,and the scope of such products has also expanded.Meanwhile,ESG-related financing tools ar

185、e becoming increasingly diversified.Domestic third-party ESG service also have evolved.WHITE PAPER ON ESG PRACTICES IN CHINA 28 ESG investment ESG concepts are gradually recognized by Chinese financial institutionsIn recent years,the number of Chinese financial institutions that have announced adopt

186、ion of ESG principles in their investments has grown rapidly.By the end of 2021,a total of 83 institutions in China signed the PRI6,including 4 asset owners,62 investment managers and 17 information service providers(see Figure 3-1).In addition,there has been rapid and sustained growth in the number

187、 of institutions that are signing the Equator Principles7,Principles for Sustainable Banking8,and Principles for Sustainable Insurance9.Chinese investors are playing an increasingly important role in responsible global investment.6 Principles for Responsible Investment,abbreviated as PRI7 Equator Pr

188、inciples,abbreviated as EP8 Principles for Responsible Banking,abbreviated as PRB9 Principles for Sustainable Insurance,abbreviated as PSIAsset Owner Investment Manager Service Provider66%52%83%200%100%9080706050403020100Number of signatories716 2017 2018 2019 2020 2021 Figure

189、3-1 Number and Growth Trend of PRI Signing Institutions in Mainland ChinaData source:CCDC29 The scale of ESG-related funds10has rapidly increased,primarily in the area of equity fundsSince 2020,the scale and number of ESG-related funds have increased rapidly.By the end of 2021,there were more than 1

190、60 public ESG-related fund products,with nearly RMB400 billion in assets under management(see Figure 3-2).In 2021,68 ESG-related funds were launched,which was four times the number launched in 2020,including 10 newly launched funds with ESG in the name.10Since there is no clear definition of ESG fun

191、ds,this white paper estimates the size of ESG funds by screening keywords in fund names and investment objectives.Working off of the relevant statements in the socially responsible investment chapter of the 2021 China Securities Investment Fund Industry Public Fund Industry Social Responsibility Rep

192、ort(I)issued by the AMAC,this white paper mainly selects through specific ESG keywords:ESG,social responsibility,low carbon,new energy,clean,environmental protection,environmental governance,ecology,carbon neutrality,green,sustainable,beautiful China,corporate governance,etc.Figure 3-2 Statistics on

193、 the Number and Scale of Public ESG Funds in ChinaData source:Wind,CCDC450040003500300025002000000AUM(in 100 million yuan)Number of funds361.90643.593336.521672.5373.31535.3013.19373.1830.51513.232017 2018 2019 2020 2021From the perspective of product vari

194、eties,by the end of 2021 more than 98%of the funds were equity and multi-asset funds,and there were three fixed income funds,with a total size of RMB4.189 billion,accounting for 1%of all public ESG-related funds.The majority of ESG-related funds are actively managed funds.By the end of 2021,there we

195、re 98 active funds among 160 public ESG-related funds,accounting for 80%of the total,and the scale of passively managed funds is also expanding gradually(see Figure 3-3).Bond fund,4.189 billion yuan1%Equity fund,213.839 billion yuanPassive fundActive fundMulti-assset fund,179.983 billion yuanActive

196、fund Passive fundBond fund Multi-asset fund Equity fundFigure 3-3 Distribution of Chinas public ESG related fundsData source:Wind,CCDC54%45%80%20%AUM of existing funds at the end of the previous year(left axis)AUM of new funds launched in that year(left axis)Number of outstanding funds at the end of

197、 the year(right axis)WHITE PAPER ON ESG PRACTICES IN CHINA 3011 According to the Measures for the Supervision and Administration of the Wealth Management Business of Commercial Banks issued by the CBIRC in 2018,the wealth management business of commercial banks refers to financial services in which

198、commercial banks accept the entrustment of investors to invest and manage the entrusted investors assets according to the investment strategy and risk bearing income distribution method that investors and banks agree upon in advance.The investment scope of bank wealth management products includes de

199、posits,bonds,and stocks.12 According to the Measures for the Administration of Financial Management Subsidiaries of Commercial Banks issued by the CBIRC in 2018,commercial bank subsidiary companies refer to non-bank financial institutions established by commercial banks whose main business is wealth

200、 management.ESG-themed bank wealth management products11developed rapidly and became an import ant force promoting ESG investmentSince April 2019,when the first ESG-themed wealth management product was launched in China,to the end of 2021,roughly 17 Chinese commercial banks or wealth management subs

201、idiaries12have launched more than 103 ESG-themed wealth management products(see Figure 3-4).According to the Annual Report on Chinas Banking Financial Market(2021),the scale of funds from bank wealth management products invested in green bonds exceeded RMB220 billion,and funds raised by new ESG-them

202、ed bank wealth management products launched in 2021 raised exceeded RMB60 billion,with an outstanding volume of RMB 96.2 billion.Increasing adoption of ESG in long-term investment Diverse ESG-themed investment strategiesWith the ESG in the mainstream,the improved availability of ESG data and transpa

203、rency,ESG-themed investment strategies brought to market are becoming more diverse.More and more investment institutions have gradually shifted from the use of a single ESG methodology such as positive screening,negative screening,industry screening,to the comprehensive application of multiple ESG m

204、ethodologies,from simply tracking ESG hot spots for thematic investment to an in-depth integration of ESG factors into the whole investment decision making process.0200Number of products2019 2020 202Number of new wealth management products during the year Figure 3-4 Number of E

205、SG-themed Wealth Management Products Issued by Banks in ChinaData source:Wind,CCDCInsurance companies,sovereign funds and other long-term fund owners now actively explore and launch ESG-related products.According to the data from IAMAC,the funds from the insurance industry supporting green industry

206、develop-ment exceeded RMB1 trillion by the end of 2021.In 2022,the China Investment Corporation(CIC)issued Sustainable Investment Policy,and the National Council for Social Security Fund of the Peoples Republic of China(NSSF)issued the Guidelines for Industrial Investment,announcing that they will i

207、ncorporate ESG factors into all aspects of invest-ment,practice the concept of sustainable investment and explore sustainable investment practices.Number of existing wealth management products at the end of the previous year 31BOX:Analysis on the trends related to ESG bond indicesIn recent years,mor

208、e financial market institutions are practicing ESG investment by following ESG indices.ESG has been recognised as a“Smart Beta”in the passive investment field.Broadly speaking,Chinas ESG-themed bond indices have the following characteristics:First,most ESG fixed income indices apply negative exclusi

209、on or positive optimization.On one hand,it is a common practice for financial institutions to exclude bond issuers with low overall ESG ratings from the index,and some institutions will additionally exclude bond issuers with a low rating in one particular aspect of ESG,such as governance.On the othe

210、r hand,a common methodology is to select bond issuers with high ESG scores for ESG indices.Second,an ESG strategy can be further integrated with other strategies to form a bond index.Presently,ESG evaluation scores and other related factors,such as credit ratings,term structure,the investment strate

211、gy of a specific client,have been combined in the bond screening and weight distribu-tion when constructing Chinese ESG indices,which reflects the customisation of the ESG strategy in financial institutions index investments.In addition,bond indices released with ESG strategy combined with other the

212、mes,such as regional development and green bonds,further diversify the methodologies of applying ESG themes to bond indices.WHITE PAPER ON ESG PRACTICES IN CHINA 32 ESG-related financing instruments The scale of green bonds continues to grow rapidly,and China ranks among the largest green bond marke

213、ts globallySince the first green bond was issued in 2016,the cumulative issuing volume of green bonds in Chinas domestic markets has reached RMB1,729.037 billion by the end of 2021,with an average annual growth rate of nearly 25%over five years(see Figure 3-5).The outstanding balance at the end of 2

214、021 exceeded RMB1 trillion.When ordered by type,green medium-term notes are the largest category,accounting for about 28%,followed by green asset-backed securities,green financial bonds and green corporate bonds;by industry breakdown,electricity,heat,gas and water production and supply,finance,trans

215、portation,warehousing and postal services are the major issuer industries in 2021(see Figure 3-6).70006000500040003000200050040030020010002016 2017 2018 2019 2020 202270215200200 220452018Figure 3-6 Category Distribution of Chinas Green Bond IssuersData source:CCDCby

216、 Classification Of Industryby Types of Green BondsMining industry,20.6 billion yuan,4%Others,51.012 billion yuan,11%Electricity,heat,gas and water production andsupply industry,163.011 billion yuan,34%Construction industry,50.286 billion yuan,11%Transportation,warehousing and postal services,67.33 b

217、illion yuan,14%Financial industry,126.715 billion yuan,26%Number of issuanceGreen enterprise bonds6%Others1%Green paper(include super&short-term commercial paper)13%Green medium-term notes28%Green corporate bonds14%Green financial bonds18%Green asset-backed securitty/asset-backed medium-term notes20

218、%Issuing volume(in 100 million yuan)Issuing volume (left axis)Number of issuance(right axis)Figure 3-5 Chinas Green Bond Issuance VolumeData source:CCDC33Figure 3-7 Development History of ESG Themed Bonds in China The rapid emergence of sustainable bonds and the continuous enrichment in investment v

219、arietiesIn addition to green bonds,sustainable bonds in China currently include sustainability-linked bonds,social bonds and sustainability bonds.Among them,sustainability-linked bonds refer to bonds that link the bond terms with whether the issuers reach their pre-determined sustainability targets.

220、If the sustainability performance targets are not reached within the agreed time limit,the adjustment of bond terms will be triggered.By the end of 2021,26 sustainability-linked bonds were issued in China,with the issuance amount of RMB36.8 billion and the balance of outstanding bonds at RMB36.8 bil

221、lion.Social bonds and sustainability bonds refer to bonds in the inter-bank market whose proceeds are 100%used for social projects or green and social projects.Chinas bond market has also introduced sub-types of green bonds,including blue bonds,which finance projects related to marine protection and

222、 sustainable utilization of marine resources,and carbon neutral bonds dedicated for green projects contributing to carbon emission reduction.Both blue bonds and carbon neutral bonds should comply with the Green Bond Endorsed Projects Catalogue(2021 Edition).By the end of 2021,7 blue bonds were issue

223、d in China,with an actual issuing amount of RMB3.9 billion and the balance of outstanding bonds of RMB3.9 billion;there were 234 carbon neutral bonds,with an actual issuing amount of RMB335.037 billion and the balance of outstanding bonds of RMB294.417 billion.In addition,Chinas bond market has also

224、 introduced its own definition of transition bonds.Transition bonds in China refer to bonds that raise funds specifically for low-carbon transition to support climate change mitigation and adaptation.The funds raised should be specifically used for low-carbon transition of enterprises,focusing on ai

225、ding traditional indus-tries as they transition and transform their business models.The proceeds of transition bonds under Chinas definition are used for clean production and efficient use of coal,clean energy use of natural gas,energy conservation and carbon reduction in key areas of high-energy co

226、nsuming industries.Green bonds(2016)Sustainability-linked bonds(2021)WHITE PAPER ON ESG PRACTICES IN CHINA 34Carbon neutral bonds(2021)Social bonds(2021)Transition bonds(2022)Sustainabilitybonds(2021)Blue bonds(2020)ESG-related third-party evaluation and data service Various institutions actively pa

227、rticipated,providing ESG evaluation and data servicesESG-related third-party services provide the market with ESG evaluation results and relevant data,providing reference values and data for ESG investment and financing and effectively channeling funds to sustainability.These services are thus an im

228、portant part of the ESG ecosystem.At present,there are diverse ESG third-party services available in the market.Institutions that provide ESG services in China include financial infrastructure,professional ESG data providers,comprehensive financial information service providers,credit rating agencie

229、s,and academic research institutions.Most third-party ESG evaluation scores and data cover listed companies only,and some institutions can fully cover bond market issuers.Most third-party institutions provide ESG evaluation and ESG data services,while Some institutions also provide analytical tools

230、and solutions such as ESG indices,ESG reporting and ESG consulting services.35 Chinas local ESG evaluation methodologies contain both international practices and Chinese characteristicsIn general,although the methodologies of ESG evaluation differ by service providers in China,they have referenced i

231、nternational,influential ESG standards,while also taking into account the characteristics of Chinas policy environment and capital market.First,the local evaluation framework refers to relevant international mainstream ESG standards.The international standards include the Guidelines for Sustainabili

232、ty Reporting and the Sustainability Reporting Standards issued by Global Reporting Initiative(GRI),ISO 26000 issued by International Organization for Standardization(ISO),as well as the Sustainability Accounting Standards issued by Sustainability Accounting Standards Board(SASB),Corporate Governance

233、 Standards issued by Orga-nization for Economic Cooperation and Development(OECD)and the TCFD Recommendations issued by Working Group on Guidelines for Disclosure of Climate related Financial Information(TCFD).Second,the ESG evaluation methodologies share common objectives and evaluation dimensions.

234、In terms of evaluation objectives,they often investigate the long-term sustainable development capacity of enterprises.In terms of evaluation dimensions,they examine the environmental practices in resource utilisation,pollutant discharge,environment protection,etc.;for evaluating“social”they often t

235、ake into account the responsibility of enterprises for stakeholders such as employees,customers and suppliers.For“governance”they assess the composition,stability,incentives,as well as checks and balances of enter-prise management.Third,Chinas local ESG evaluation methodologies consider the nature o

236、f Chinas policy environ-ment,market,and thus include some metrics that reflect the local Chinese context.This localized methodologies,for example,include key topics such as financial services for poverty alleviation,rural revitalization,and common prosperity and determines the best practice paramete

237、rs by carefully considering industry differences and referring to the development plans and standards of various industries in China.WHITE PAPER ON ESG PRACTICES IN CHINA 36 Recommendations for the short term Recommendations for the medium and long term37WHITE PAPER ON ESG PRACTICES IN CHINA 38Thank

238、s to the continuous efforts of authorities and all types of market participants,considerable progress has been made in Chinas ESG development.We believe that the ESG practices will inject impetus into Chinas high-quality development in the future.However,we still have a long way to go in the promoti

239、on and application of ESG,which faces many challenges.Thus,suggestions are put forward as follows:First,it is necessary to promote the development of Chinas ESG-related standards system in combination with current ESG practices domestically and internationally.At present,globally,ESG is still in its

240、 relative infancy.While the concept of ESG has received wide recog-nition,there is no consensus yet with regards to a specific code of conduct or evaluation method,and the relevant standards issued by various international organizations have different emphases.At present,ESG remains in an early stag

241、e of development in China.Corporates and financial institutions have made efforts on ESG according to their own understanding of the concept.However,the specific codes of conduct for various entities to engage in ESG policies lack consistency.This has impacted the further expansion and standardisati

242、on of Chinas ESG corporate practice to a certain extent.Therefore,the formulation of relevant ESG standards in China in terms of corporate disclosure,financial institution investment,and third-party institution evaluation is paramount.It is also necessary to guide Chinese enterprises and finan-cial

243、institutions to deepen their engagement with ESG and thereby encourage mechanisms for China and the world to carry out dialogue and investment and financing cooperation in the area of sustainability.Second,the standardisation of ESG information disclosure shall be accelerated based on the current pr

244、actice of ESG information disclosure by Chinese enterprises.From an international perspective,the reliability and standardisation of ESG information disclosure to satisfy international requirements is an important challenge for the ongoing adop-tion of ESG investment and financing practices.While po

245、licy has encouraged progress,the disclosure ratio,the richness,comparability and reliability of the information disclosed should be further improved.Therefore,there is urgent need to continue encouraging this practice at the policy level,to draw upon relevant international disclosure standards,and t

246、o issue Chinas ESG information disclosure standards based on Chinas ESG standards.It is also necessary to further strengthen awareness of ESG information disclosure,while fully considering the feasi-bility of information disclosure by enterprises.China could draw on experiences in other mar-kets.It

247、is helpful to provide a uniform disclosure template through financial infrastructures to reduce the cost burden of information disclosure on enterprises as much as possible,and stan-dardise the work related to information disclosure to promote the in-depth development of ESG investment and financing

248、 practices.Third,the role of financial infrastructures shall be fully utilized and the application of ESG third-party evaluations shall be promoted.At present,Chinas financial infrastructures,positioned as neutral and objective institutions with the advantage of obtaining data from serving the marke

249、t over the years,have taken the initiative to fulfill their social responsibilities.They have launched ESG-related services,covering the bond market and A-share listed companies and providing reference indicators for Chinas ESG investment and financing.In the future,the leading role of financial inf

250、rastructures shall be fully utilised,and enterprises and financial institutions shall be encouraged to widely apply ESG evaluations and data in their practices.On that basis,enterprises shall be guided to proactively improve their own ESG levels,while financial institutions shall fully consider ESG

251、factors in their investment decisions to promote capital flow into the field of sustain-able development.Recommendations for the short term39WHITE PAPER ON ESG PRACTICES IN CHINA 40First,ESG concepts need to be further applied to deliver more vivid practices in China for deepening ESG development.Th

252、e continuous deepening of ESG practices in China requires advancing the construction of a more effective and diversified ESG ecosystem.Under policy guidance,we need to keep all parties fully motivated;further encourage enterprises,financial institutions,third-party service institutions,and scientifi

253、c research institutions to engage in extensive participation;explore the establishment of a data co-construction and sharing mechanism;enrich ESG prac-tice scenarios;improve Chinas ESG evaluation system;and deepen Chinas ESG theory.Taking these actions will lead to a virtuous circle of proactive pol

254、icy guidance,proactive actions by enterprises,continuous investment of financial resources,and efficiency improve-ments in third-party services.Second,it is necessary to participate in global ESG governance and promote the coordinated development of international sustainable finance.At present,China

255、 and the EU have jointly promoted the convergence in green classification standards and published the Common Sustainable Finance Taxonomy for international inves-tors reference.In the near future,the financial sector should continue to open to facilitate the participation of international investors

256、in Chinas sustainable finance market,making it more attractive to international investors.Based on Chinas ESG practices,China needs to leverage the role of international sustainable finance institutions and organizations and participate in the development of international ESG-related rules and relev

257、ant international cooperation.Recommendations for the medium and long termCurrently,ESG is developing rapidly across the globe.Many international organizations and guidelines focusing on global sustainable development paths and promoting information disclosure have emerged in a short period of time.

258、Large enterprises have proactively adopted ESG concepts,while sovereign funds,banks,and other asset management institutions have also begun to incorporate ESG factors in their investment processes.We can see that promot-ing sustainable development has become the common mission of all countries.The d

259、evelopment of ESG and sustainable development concepts have also been grown rapidly,thanks to the vigorous effort by all parties.On the one hand,despite a relatively late start,ESG policies in China have made enormous progress,with a clearer policy frame,and a better ESG-related taxation,mone-tary,a

260、nd investment policies and standard systems.Also,China is actively promoting international cooperation and participating in the formulation of international standards.On the other hand,companies have responded to policy requirements while taking action,boosting their ESG performance on all fronts.In

261、 addition,different kinds of sustainable financial instruments have emerged rapidly,making China the global leader in terms of issuance volume of sustainable bonds.Coclusios41With a focus on major participants in the ESG ecosystem,this White Paper presents the progress in and the implementation resu

262、lts of Chinas ESG system,the efforts made by business entities and the innovation of financial markets;takes stock of and summarises Chinas actions and practices in the ESG field;and provides an overview for global investors who are interested in Chinas ESG development.China is currently promoting s

263、ustainable development to promote a balance of human activities and nature.It is believed that with the endeavors and cooperation of all parties,ESG will play a role in Chinas economic development.China will embrace global sustainability concepts while taking local context and situations into accoun

264、t.WHITE PAPER ON ESG PRACTICES IN CHINA 42Appendix Summary of Chinese policies that require or encourage the disclosure of ESG information2007Former State Environmen-tal Protection Administra-tion(EPA)Former State Environmental Protection Administration(EPA)Measures for the Disclosure of Environment

265、al Information(for Trial Implementation)(abolished)Key pollutant discharging enterprisesMandatoryBasic information,information about pollution such as the discharge of major pollutants and characteristic pollutants,environmental quality monitoring of surrounding areas,construction and operation of p

266、ollution prevention facilities,environmental protection administrative licensing,emergency plan for environmental emergencies and other information according to the environmental impact assessment report(form)and the response from authorities.MandatoryVoluntaryThe recorded level of the enterprise s

267、pollutant emission and monitoring records of the impacts on the environment.All enterprises2022Work Plan for Improving the Quality of Listed Companies Controlled by Central EnterprisesSASACDedicated ESG report.Listed companies controlled by centrally managed state owned enterprisesVoluntaryDocument

268、nameDisclosing entityContent to be disclosedCompulsory or notIssuingauthorityYear2015Guiding Opinions on Strengthening the Construction of Enterprise Environmental Credit SystemFormer Ministry of Environmen-tal Protection(MEPC),National Develop-ment and Reform Commission(NDRC)enterprises that produc

269、e or import motor vehicle Verified emission,technologies applied for pollution control and relevant maintenance technical information of motor vehicle models manufactured and imported.Key pollutant discharging enterprises2021Administrative Measures for the Legal Disclosure of Enterprise Environmenta

270、l InformationMinistry of Environ-mental Protection(PRC)MandatoryMandatoryMandatoryIn addition to the contents required to be disclosed by key pollutant discharging enterprises,the following shall also be disclosed:methods of financing,financing amounts,use of proceeds for the year,as well as the inf

271、ormation about how the projects being financed contribute to climate change and environment protection.Listed companies and bond issuersBasic information of enterprises,including basic information of enterprise production and actions to protect ecological environment;information about enterprise env

272、ironmental management,including ecological environment administrative permission,environmental protection tax,environmental pollution liability insurance,environ-mental protection credit evaluation and other information;information on the generation,treatment and discharge of pollutants,including in

273、formation on pollution prevention and control facilities,pollutant discharge,discharge of toxic and harmful substances,generation,storage,flow,utilization and disposal of industrial solid waste and hazardous waste,and self-monitoring;carbon emission information,including information on emission leve

274、l and emission facilities;ecological environment emergency information,including emergency plans for environmental emergencies,emergency response in case of poor air quality;information on violation of environmental laws;disclosure of temporary environmental information in accordance with the law th

275、is year;other environmental information specified by laws and regulations.In addition to the contents required to be disclosed by key pollutant discharging enterprises,the following shall also be disclosed:reasons why the enterprise is required to conduct mandatory audit on clean production;implemen

276、tation,evaluation and acceptance results of mandatory audits on clean production.Enterprises that are required to conduct mandatory audits on clean production2008Measures for the Administra-tion of the Law-based Disclosure of Environmental Information by EnterprisesSASACSocial responsibility report

277、or sustainability report,disclosing the current situation,plans and measures of enterprises to fulfill social responsibility.Centrally managed state owned enterprisesVoluntaryAppendix432002Code of Corporate Governance for publicly listed companies(abolished)CSRC2017Guidelines for Green Debt Financin

278、g Instruments of Non-financial EnterprisesNAFMIIClearly disclose the specific information of green projects,including but not limited to:basic information of green projects;description whether green projects comply with relevant standards;environmental objectives and impacts such as energy conservat

279、ion and emission reduction brought by green projects;disclose the use of proceeds and the progress of green projects every six months.MandatoryIssuers of green bond financing instrumentCompanies engaged in thermal power generation,steel,cement,electrolytic aluminum,mining and other industries that h

280、ave significant impact on the environment2008Notice on Strengthening Listed Companies Assumption of Social Responsibility”and the“Guidelines on Listed Companies Environmen-tal Information Disclosure.”Shanghai Stock Exchange(SSE)MandatoryVoluntaryPractices and achievements in undertaking social respo

281、nsibility;social responsibility information such as social contribution value per share;environmental protection policies,objectives and actual achievement of the company;total amount of resource consumed in a year;investment for environmental protection and development of technology for environment

282、al objectives;type,quantity,concentration and destination of discharged pollutants;construction and operation of environmental protection facilities;the treatment and disposal of waste in the production process,and the recovery and reuse of waste products;voluntary agreements signed with the environ

283、mental protection department to improve environmental behavior;rewards received from the environmental protection department;etc.Environmental protection policies,objectives of the year and actual achievement of the year of the company;total amount of resource consumed in a year;investment for envir

284、onmental protection and development of technology for environmental objectives;type,quantity,concentration and destination of discharged pollutants;construction and operation of environmental protection facilities;the treatment and disposal of waste in the production process,and the recovery and reu

285、se of waste products;voluntary agreements signed with the environmental protection department to improve environmental behavior.Listed companies2018Specifications for Post-issuance Information Disclosure of Green Financial BondsPeople s Bank of ChinaThe use of proceeds shall be disclosed quarterly,i

286、ncluding but not limited to the amount and quantity of new green projects launched during the reporting period,the due amount and quantity of projects launched,the balance and quantity of projects launched at the end of the reporting period,and a brief analysis of the balance and quantity of project

287、s launched as of the end of the reporting period.The annual report shall comprehensively describe the overall use of proceeds and the expected or actual environmental impacts in the reporting year;the top 10%projects by the amount of funds allocated under the green financial bonds and the projects w

288、hich received allocation of RMB50 million or more or accounted for 1%or more of the outstanding amount of green financial bonds shall be disclosed individually;other projects can be summarized and disclosed by category.Disclose information such as major pollution accidents or other violations of env

289、ironmental laws by enterprises or projects being financed by the green financial bonds.Issuers of green financial bondsMandatory2006Guidelines on Social Responsibility for Listed CompaniesShenzhen Stock Exchange(SZSE)The social responsibility report shall at least include:establishment and implement

290、ation of the social responsibility procedures in terms of employee protection,environmental pollution,product quality,community relations,etc.;whether there is a gap between the performance of social responsibility and the Guidelines and the explanation of the reasons for this gap;measures to improv

291、e and implementation timelines.Listed companiesVoluntary2018Code of Corporate Governance for Listed Companies(revised)CSRCDisclose environmental information,implementation of social responsibilities such as poverty alleviation,and information related to corporate governance in accordance with laws a

292、nd regulations and the requirements of relevant authorities.Listed companiesMandatoryInformation that may affect the decisions of shareholders and other stakeholders.VoluntaryDocument nameDisclosing entityContent to be disclosedCompulsory or notIssuingauthorityYearWHITE PAPER ON ESG PRACTICES IN CHI

293、NA 44Appendix Summary of Chinese policies that require or encourage the disclosure of ESG informationDocument nameDisclosing entityContent to be disclosedCompulsory or notIssuingauthorityYear2022Shenzhen Stock Exchange Corporate Bond Innovative Business Guidance No.1-Green Corporate Bonds(revised 20

294、22)Shenzhen Stock Exchange(SZSE)Disclose the specific areas in which the proceeds of green corporate bonds are used,the information of green projects and the environmental benefits achieved.Issuers of green corporate bondsMandatory2022Guidelines for the Application of the Examination Rules for the I

295、ssuance and Listing of Corporate Bonds of the Shanghai Stock Exchange No.2 Certain Types of Corporate Bonds(revised in 2022)Shanghai Stock Exchange(SSE)Disclose the information about the green projects being financed,including but not limited to the category of green projects,the criteria or standar

296、d for project selection,and environmental benefit objectives;disclose the use of proceeds,progress of green projects,environmental benefits,etc.Green corporate bonds(including carbon neutral bonds and blue bonds)MandatoryCalculation methodologies and reference points for environmental benefits,and q

297、uantitative calculation of amount of energy saving(standard coal),carbon emission reduction and other environmen-tal benefits of the project.Issuers of carbon neutral bondsMandatoryInformation related to the environmental benefits of the carbon neutral project,with an emphasis on the disclosure of t

298、he measurement methodologies and reference points of environmen-tal benefits,and the quantitative measurement of the environmen-tal benefits of the project such as amount of energy saving(based on standard coal)and carbon emission reduction.Carbon neutral bond issuersMandatory2021Guidelines for fina

299、ncial institutions on environmental information disclosurePeople s Bank of China(PBC)Disclose annually in the environmental information report,social responsibility report or annual report,the environmental related governance structure,environmental related policies and procedures,innovation in the

300、aspects of environmental related products or services,environmental risk management process,the impact of environmental factors on financial institutions,the environmental impact of investment and financing activities,the environmental impact of business activities;data consolidation,verification an

301、d protection;green financial innovation and research achievements.Banks,asset management companies,insurance companies,trusts,futures companies,securities companies and other financial institutionsEncouraged2018Pecifications for Post-issuance Information Disclosure of Green Financial BondsPeople s B

302、ank of China(PBC)Disclose the methodologies for measuring environmental impacts or the name of verifier;introduce the vision and objectives of their own green financial bonds and explain the progress made;disclose the focus of green financial bonds on which types of projects,key categories for use o

303、f proceeds or categories that are explicitly excluded.Issuers of green financial bondsEncouraged45WHITE PAPER ON ESG PRACTICES IN CHINA 46China Central Depository&Clearing Co.,Ltd.(CCDC),founded in December 1996.CCDC is the only central financial enterprise to specialize in financial market infrastr

304、ucture(FMI)services.Since its establishment,CCDC has faithfully fulfilled its duties as a national financial market infrastructure institution and fully and deeply participated in the cultivation and construction of Chinas bond market.It has become an important service platform for Chinas bond marke

305、t opera-tions,a support service platform for the implementation of national macroeconomic policies,a pricing benchmark service provider for Chinas financial market,and a main gateway for Chinas bond market to connect with overseas markets.As of the end of 2021,CCDC managed registered financial asset

306、s of over RMB 125 trillion,of which bonds accounted for more than RMB 87 trillion.ChinaBond Pricing Center is a reliable set of pricing benchmarks that CCDC provides for the finan-cial market based on its unique expertise and neutrality as a CSD.ChinaBond Pricing Center is responsible for compiling

307、and operating ChinaBond Pricing Products.These products fully reflect the prices and risk status of the RMB bond market and are reliable benchmarks for the domestic bond market.Approved and recommended by regulators and widely used in the market,they have become key references for the formulation an

308、d implementation of fiscal and monetary policies.In 2020,ChinaBond Pricing Center launched the worlds first ESG evaluation system.This system fully covers issuers in Chinas bond market,filling a gap in the market.It expanded to cover A-share listed companies in 2021,realizing full coverage of nearly

309、 9,000 domestic bond issuers and other listed companies.The ChinaBond Pricing Center also provides diversified product services includ-ing ESG evaluation,ESG database,ESG index,ESG reports and ESG consultancy,thus promoting the practical application of ESG concepts philosophy and high-quality econom

310、ic and social devel-opment.About CCDC47The International Capital Market Association(ICMA)is an international trade association that is a highly influential voice for the global capital market.ICMA represents institutions worldwide,who are active in the international capital markets on a cross border

311、 basis.Founded in 1968,ICMA has its head office in Zurich,with a subsidiary in London and representative offices in Paris,Brussels,and Hong Kong.ICMA liaises closely with regulatory and governmental authorities,both at the national and supranational level,to provide industry-driven rules,principles

312、and recommendations that promote coherent,resilient and well-functioning international cross-border debt securities markets.ICMAs market conventions and standards have been the pillars of the international debt markets for over 50 years.While ICMA has been most active in the international debt marke

313、ts,it takes full account of the increasing integration between the debt and equity,cash and derivatives markets.Membership continues to grow,with currently more than 600 members based in over 60 jurisdic-tions.ICMA members include global investment banks,commercial and regional banks,brokers,private

314、 banks,institutional asset managers,pension funds,central banks,sovereign wealth funds and other institutions with a pronounced interest in the securities market,such as supranational institutions,infrastructure providers,rating agencies,law firms,audit firms and media.About ICMAWHITE PAPER ON ESG PRACTICES IN CHINA 48WHITE PAPER ON ESG PRACTICES IN CHINA