China News Agency, Beijing, May 1, topic: Interview with Deloitte China Climate Change and Sustainable Development Leader: ESG is an irreversible trend in the future
Author Liu Wenwen
It has been more than a year since China clearly stated the goal of carbon neutralization in September 2020. During this period, the concept of sustainable development has continued to penetrate into all walks of life.
Deloitte China Climate Change and Sustainable Development Managing Partner Xie An said in an exclusive interview with China News Agency recently that China has made considerable changes in addressing climate change and sustainable development over the past year. and governance) is undoubtedly an irreversible trend in the future.
The government and enterprises pay more and more attention
"In the past year or so, we have seen a considerable change in the thinking of many Chinese executives. When it came to climate change before, some domestic companies were more passive and more concerned about cost, but now everyone is more proactive Seek opportunities, solve problems, and defuse risks." Xie An said.
Deloitte recently released the "Deloitte 2022 Chief Executive Sustainability Report", which analyzes the concerns of business leaders and enterprises on climate change and sustainable development through a survey of more than 2,000 executives around the world.
The results show that 98% of Chinese executives say their companies have been negatively impacted by climate change, compared to 97% globally.
Despite the dire situation, 93% of Chinese executives agree that the worst impacts of climate change can be mitigated with immediate action.
The above data shows that Chinese enterprises are increasingly aware of sustainable development and are increasingly concerned about the risks and opportunities brought about by climate change.
Xie An also pointed out that, in fact, from the "14th Five-Year Plan", to the carbon peaking, carbon neutral "1+N" policy system, and then to this year's "Government Work Report", the state has given a lot of top-level design. Support and guidance, including the establishment of a national carbon market, carbon pricing, corresponding financial and financial support, etc... This actually shows an important signal - China is taking action.
From regulatory-driven to self-driven
"The recognition of sustainable development is getting higher and higher, and the choice to practice the ESG concept will be more and more firm." Xie An said.
Chinese regulators adopt a "top-down" approach to promote Chinese companies to strengthen ESG management through ESG information disclosure and funding guidance.
In January this year, the Shanghai Stock Exchange clearly required that companies on the STAR Market should disclose ESG-related information in their annual reports, and prepare and disclose ESG report documents separately as appropriate.
More and more market players are participating in the preparation and publication of ESG reports.
In Xie An's view, ESG is a common language used to express performance at the environmental, social and governance levels.
Actively compiling and publishing ESG reports is a work that is driven by regulation to the self-driving of enterprises.
Using a more general and mature framework to help companies express ESG performance more quantitatively and logically can further drive corporate governance upgrades.
He further analyzed that the release of ESG reports can help potential investors, regulators and other stakeholders to see the level of corporate sustainability performance more transparently.
In the process, the company itself will also be under pressure from regulators, governments, board members and shareholders to force its development and change.
In addition, ESG reporting is an important tool to help identify some particular risks and opportunities.
Xie An pointed out that for the same two financial reports, companies with poor ESG performance mean that they may face greater risks in certain areas due to regulatory changes or market changes.
Localization should be based on internationalization
At present, ESG is stepping into a process of accelerating development in China.
However, how to localize ESG and establish a rating standard and information disclosure system that is in line with international standards and China's national conditions?
How to prevent companies from deliberately "greenwashing" ESG as an endorsement tool or fundraising method?
Xie An said that, in fact, a lot of work is being done both domestically and internationally to promote the establishment of a globally recognized standard.
"First of all, under a unified standard, all parties can compare and have dialogue, which is an important starting point. Second, whether it is climate action or the practice of ESG, it is an important issue of global integration in the true sense. Therefore, ESG localization must be based on the foundation of internationalization, and localization without internationalization is self-talk.” Xie An said.
Xie An believes that on the one hand, Chinese enterprises must be in line with international standards, and on the other hand, they must adapt to China's current market and policies.
Making sustainable and correct decisions does not happen overnight. It requires balancing multiple stakeholders and enhancing the value creation of the enterprise itself.
In his view, to prevent or reduce "greenwashing" behavior, we must first increase the cost of violations, and secondly we must pay attention to governance.
To a certain extent, G (governance) in ESG is more important than E (environment) and S (society). G includes both government governance and corporate self-governance. Therefore, by grasping G, E and S can be guaranteed.
Specifically, Xie An believes that it can be guaranteed through legislation and supplemented by market-based mechanisms.
After the big waves wash away the sand, when more high-quality and professional institutions emerge, they will identify the real "top students" for sustainable development.
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