China Issues New Requirements for ESG Disclosures
What’s new: China’s top securities regulator issued new rules outlining requirements for domestically listed companies to add environmental, social and governance (ESG) disclosures to annual financial reports.
The China Securities Regulatory Commission (CSRC) published the new disclosure rules for publicly traded businesses Monday on its website. The new rules add a new chapter on environmental and social responsibility, requiring companies to disclose pollutant emission situations, environmental impacts and administrative penalties arising from environmental issues.
The rules also encourage companies to voluntarily disclose measures to reduce carbon emissions and alleviate poverty. The CSRC said it will work closely with international organizations in developing global standards for sustainability reporting.
The background: The new rules formalize some changes proposed in a draft revision to listed companies’ disclosure requirements issued in May amid the central government’s push on environmental and social responsibility initiatives.
The concept of ESG has captured the attention of regulators and businesses in China in recent years as the government pursues a goal of achieving carbon neutrality by 2060.
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