More Chinese Companies Embrace ESG Strategy
More Chinese businesses are embracing the ESG (Environmental, Social, and Governance) concept as they work to improve their sustainable development skills and meet the country's goal of reducing carbon emissions.
ESG is a term that was first used in 2005. It looks at a company's long-term value and how important it is to its stakeholders. An ESG rating assesses the environmental and social impact of a company as well as the effectiveness of its corporate governance in managing those impacts. Organisations create ESG strategies to help them act on and measure what is mutually beneficial for profits, people, and the planet.
Chinese businesses and professionals discussed their expertise in adopting ESG strategies at the 2022 Boao Forum for Entrepreneurs in south China's Hainan Province.
Wang Xiaogang, the CEO of THNORLAND, a dairy company based in Qinghai Province in northwest China, said that the company has been using an ESG development philosophy since it started.
"We conduct carbon monitoring throughout the industrial chain and have built a data-based system, and we strive to build ecological organic farming and animal husbandry," said Wang, emphasising the importance of green development to the environmental protection of the Qinghai-Tibet Plateau.
Zhou You, vice president of auto information provider Autohome Inc., said that the company is now adjusting to ESG regulatory standards and will publish its first ESG rating assessment next year.
"The automobile industry has a large carbon emission, and many automobile enterprises seek technological innovation and product transformation in pursuit of the goal of reducing carbon emission," said Zhou, promising that the company will make contributions to the green transformation of the auto industry.
King's Luck is a liquor company based in east China's Jiangsu province. In addition to producing wine, it has established a grain planting base to aid in rural revitalisation.
In this manner, the company realises the convergence of economic and social value creation. In the first three quarters of 2022, the company's sales went up by about 22.2% compared to the same time last year, reaching 6.51 billion yuan (about 904.1 million US dollars).
Standards must be formulated to better regulate the operation of enterprises. So, this year, a set of organisational standards for an ESG evaluation system for enterprises was published in Beijing. These standards are an important part of the infrastructure for enterprises to practice ESG.
Over 90 firms, institutions, and organisations collaborated to develop the standards, which were led by China Economic Information Service, Capital University of Economics and Business, and China Enterprise Reform and Development Society.
According to data provided during the forum, more than 1,400 Chinese-listed companies disclosed independent social responsibility reports, often known as ESG reports, in 2021.
"The active practice of ESG by Chinese enterprises can enhance their vitality, innovation, and anti-risk capability," said Li Hua, an official with China Enterprise Reform and Development Society.