Shenzhen Stock Exchange Launches ESG Rating Methodology and ESG Index

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  • Shenzhen Stock Exchange Launches ESG Rating Methodology and ESG Index

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    Shenzhen Securities Information, affiliated with the Shenzhen Stock Exchange (SZSE), launched the CNI ESG Ratings Methodology along with a set of ESG indices, as reported by People.cn on July 26. Among the three pillars of environment, society, and corporate governance (ESG), the rating methodology sets up 15 themes, 32 domains, and more than 200 indices that fully reflect listed companies’ practice and performance in sustainable development. The rating system aims to offer an ESG evaluation tool suitable for the Chinese market. To improve the index system and provide the market with more index investment instruments, the SZSE presented the Shenzhen Component ESG Index, Shenzhen 100 ESG Index, ChiNext ESG Index, Shenzhen Component ESG Top Index, Shenzhen 100 ESG Top Index, and ChiNext ESG Top Index.

    This was China’s latest move in building its ESG ecosystem. In January, Shanghai Stock Exchange (SSE), another bourse in the Chinese mainland, mandated ESG disclosure in the annual reports of enterprises listed on its STAR Market, a tech company-focused board. The SSE also stressed that enterprises should disclose their plans on how to help China realize its carbon-neutral goal for 2060. Moreover, the government-backed think tank China Enterprise Reform and Development Society (CERDS) and China’s top companies including Ping An Insurance [2318:HK] drew up the Guidance for Enterprise ESG Disclosure in May. This voluntary guideline generally aligns with the global benchmark of draft rules issued by the International Sustainability Standards Board (ISSB). As China’s first ESG disclose standard, the guideline took effect on June 1.

    Sources:

    http://finance.people.com.cn/n1/2022/0726/c1004-32485950.html

    https://pandaily.com/shenzhen-stock-exchange-releases-esg-ratings-methodology/

    http://www.cnindex.com.cn/eng/information/notices_news/2022/202207/t20220725_17805.html?act_menu=2

    https://www.reuters.com/business/sustainable-business/shanghai-bourse-asks-star-market-companies-disclose-esg-details-2022-01-20/

    https://www.bloomberg.com/press-releases/2022-05-11/china-releases-its-first-esg-disclosure-standard-with-ping-an-s-participation-l31pg2rt

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