Options for action in China

Increase pension funds’ ESG focus

  • The government could have all state pension funds (Pillars Ia and Ib), the National Social Security Fund (including its licensed fund managers and custodians), enterprise annuity plans and mutual funds take account of ESG issues, encourage high standards in investee companies and report on how they are doing so.

Expand green finance

  • The government, through organisations such as the People’s Bank of China, is developing comprehensive policies to support the greening of China’s financial system. The demand from financial institutions for green investment is growing and can be further strengthened.

Support research

  • The Ministry of Human Resources and Social Security, the People’s Bank of China, the stock exchanges and the investment industry could work together to support high-quality academic research into ESG issues.

Introduce a stewardship code and monitor stewardship outcomes

  • The Ministry of Human Resources and Social Security could work with the investment industry to develop a code setting out institutional investors’ stewardship responsibilities.

Continue to enhance corporate practice

  • Significant steps have been taken by central and provincial governments to reduce pollution and improve energy efficiency in Chinese firms. This should be continued and extended across all sectors and sustainability issues. This will focus investors’ attention on company performance and increase the pressure on companies to adopt environmental management systems and controls to manage their environmental and sustainability impacts effectively.

Enhance corporate disclosure

  • The Shanghai and Shenzhen stock exchanges, together with the China Securities Regulatory Commission (CSRC), could analyse and report on the disclosures being provided by listed companies.

Produced in collaboration with UNEP FI and Generation Foundation

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Investor obligations and duties in six Asian markets