In April 2024, the Shanghai Stock Exchange (SSE) officially issued Guidelines No. 14 of Shanghai Stock Exchange for Self-regulation of Listed Companies - Sustainability Report (Trial) (hereinafter referred to as the "Sustainability Report Guidelines"). In the 2023 ESG report compilation process, nearly 600 SSE-listed companies referred to the relevant content of the Sustainability Report Guidelines, and about 400 companies have incorporated these guidelines into their compilation basis. ESG information disclosure is gradually becoming standardized and regulated. How to effectively manage ESG, the "second financial report" is crucial.
SSE-listed companies actively explore the path of ESG construction, with disclosure efforts booming.
According to statistics, in 2023, 1,149 SSE-listed companies separately disclosed 2023 social responsibility reports, ESG reports, sustainable development reports, etc. (hereinafter referred to as ESG-related reports), and the disclosure rate reached 50.6%, an increase of 3.6 percentage points year on year. The majority of companies are increasingly disclosing more detailed content, with nearly 700 companies publishing ESG reports that focus on the external economic, social, and environmental impacts of their production and operations, and 107 companies releasing sustainability reports that emphasize the risks and opportunities associated with corporate, social and economic sustainability.
At present, the SSE has developed a stable group of listed companies that regularly disclose ESG-related reports. This group includes most large-cap blue-chip companies, key-index companies, and those listed both domestically and internationally, achieving near full coverage. The SSE 50 Index and STAR 50 index companies all disclosed ESG-related reports, with a disclosure rate of 93% for SSE 180 index companies. The disclosure rate reached 99% for 138 companies that are simultaneously listed domestically and internationally. Many SSE-listed companies have maintained continuous disclosure over several years, accumulating extensive practical experience. 786 companies have disclosed ESG-related reports for more than three consecutive years, 522 companies for more than five consecutive years, and 313 companies for more than 10 consecutive years. For instance, Baoshan Iron & Steel Co., Ltd. has disclosed reports for 21 consecutive years and has shifted to disclosing sustainability reports.
China United Network Communications Limited has been proactively disclosing its performance in environmental and social responsibility and corporate governance for more than 10 consecutive years, leading the industry. In March 2022 and March 2023, the social responsibility report was upgraded to a "sustainability report". The 2023 report is more substantial and comprehensive, including "striving to be a practitioner of ecological civilization development", "building a booster for the development of people's livelihood undertakings", "creating a new atmosphere and forging a new landscape of modern governance", which have garnered wide acclaim from both the industry and society.
Since its inaugural Corporate Social Responsibility (CSR) report in 2009, Shanghai Fosun Pharmaceutical (Group) Co., Ltd. has consistently disclosed information related to its sustainability development and continuously improved the quality of its disclosures. As of the end of 2023, the company has published its CSR reports for fifteen consecutive years (2008-2022) and Environmental, Social, and Governance (ESG) reports for the last three years (2020-2022). In 2024, in order to better address stakeholders' concerns regarding corporate sustainability, the company merged the Corporate Social Responsibility Report and the Environmental, Social and Governance Report into the ESG and Sustainability Report to further enhance the integrity, consistency and readability of the report, with a view to using transparent non-financial indicators to help stakeholders more comprehensively and systematically track the economic externalities resulting from business operations, and better evaluate the company's sustainable development capabilities.
Enhance market recognition and consensus on value, continuously improving disclosure quality and ratings
The mainstream adoption of ESG signifies a new understanding in the market regarding the external impacts of corporate operations and establishes new evaluation standards for corporate value. SSE-listed companies have engaged extensively with stakeholders through surveys, interviews, and research to assess the impact levels of various issues, establishing a robust mechanism for identifying substantive concerns. Through more comprehensive and higher-quality ESG disclosures, these companies aim to secure investor recognition. For instance, Fuyao Glass Industry Group Co., Ltd. underscores its proactive approach by conducting diverse communication channels, both online and offline, before preparing each ESG report. This ensures active and effective dialogue with stakeholders. Based on stakeholder feedback, Fuyao Glass conducts an assessment of significant ESG issues to align the corporate operations with the expectations and needs of all stakeholders. Concurrently, the company engages a third-party intermediary to provide authentication services, enhancing the report's credibility, accuracy, and investor acceptance. Moreover, China Petroleum & Chemical Corporation has continuously improved the disclosure quality and issued sustainability reports for 18 consecutive years. The company benchmarks regulatory requirements and advanced practices of domestic and international peers, enhancing quantitative data disclosure. In 2023, the number of quantitative data points in the Sustainability Report reached 119, a 34% year-on-year increase. The company integrates sustainable disclosure into its internal control processes, continuously expands the scope of third-party verification indicators, and saw a 33% year-on-year increase in the number of verification indicators in 2023. Enhancing communication among stakeholders and integrating disclosure standards and stakeholders' feedback into corporate strategy and operations establishes a virtuous circle of coordination and mutual promotion between disclosure and management.
SSE-listed companies have further strengthened their sustainable development governance structure and mechanisms. Over 800 companies have their chairman serving as the head of the highest decision-making body on sustainable development matters, while over 600 companies have established internal governance structures and mechanisms to address and manage sustainable development-related risks and opportunities. For instance, China Yangtze Power Co., Ltd. integrates ESG management mechanisms into daily operational management, advancing enterprise compliance management, implementing carbon peak and carbon neutrality goals, and fulfilling social responsibilities, to maximize ESG value creation and optimize value realization. By assessing and tracking the risks and opportunities of ESG indicators and comprehensively optimizing the resource efficiency of business operations, the company can enhance its ability to address environmental, social and governance uncertainties, comprehensively improve its capability to address risks, and consolidate the foundation for sustainable development.
With the continuous accumulation of mature and excellent practical experience, SSE-listed companies have steadily improved the reliability and ratings of their ESG information disclosure. Among the 1,149 companies that disclosed ESG-related reports, 129 engaged third-party verification organizations to authenticate report content, enhancing the reliability and credibility of their ESG disclosures.
The responsibility-oriented approach under the new quality productive forces injects new momentum into sustainable development
The core principles of green and sustainable development promoted by ESG align closely with the new quality productive forces. Emphasizing technological innovation, SSE-listed companies aim to bolster their ESG capabilities, striving for breakthroughs in the harmonized development of economy, environment, and society.
SSE-listed companies further enhance their technological innovation capabilities to significantly bolster green environmental development, and take active measures to help achieve the "carbon peak and carbon neutrality" goals. According to annual reports and ESG disclosures of listed companies, 1,896 companies established environmental protection mechanisms in 2023, accounting for 83.45% of the total, with nearly 290 billion yuan invested in environmental protection. Furthermore, 811 companies disclosed total carbon emissions in their annual or ESG-related reports, while 1,598 companies reported on carbon reduction measures and their effectiveness. Over 400 companies engaged external organizations to conduct carbon emissions accounting.
For instance, China Southern Airlines Company Limited has been serving the national "carbon peak and carbon neutrality" goals. In 2023 and as of May 2024, the company has saved 255,500 tons of fuel and reduced carbon emissions by 804,800 tons. Through the "Green Flight" initiative, over 7,212,900 meals were adjusted based on demand, and 2,697 passengers participated in the carbon offset service. CMOC Group Limited announced its carbon peak and carbon neutrality plan to strengthen climate financial information disclosure, with annual environmental protection investments reaching 252 million yuan. The company has achieved significant environmental performance: carbon intensity is 95% lower than the industry average, renewable energy accounts for 41% globally, and 80% of water is recycled. These efforts have raised CMOC's MSCI ESG rating to AA, placing it among the leaders in the global industry. In 2023, the six cascade power stations of China Yangtze Power Co., Ltd. generated a total of 276.263 billion kWh, equivalent to replacing 83.07 million tons of standard coal consumption compared to coal-fired power plants. This contributed to reducing CO2 emissions by 227 million tons, SO2 emissions by 22,900 tons, and NOx emissions by 36,700 tons, contributing to ensuring energy supply, reducing pollution and carbon emissions, preventing and controlling smog, and addressing climate change.
In addition, SSE-listed companies take advantage of digitalization and intelligence, and more than 1,800 companies have disclosed specific measures and effects in terms of ensuring supply chain security and bolstering industrial and supply chains. For instance, China United Network Communications Limited serves the digital economy, strengthens its Unicom Cloud, and continuously enhances its position as the leading "5G+ Industrial Internet" brand. The Gewu Unilink platform has been selected as a national cross-industry platform, with a total of 30,000 5G industry application projects. China United Network Communications Limited supports the construction and operation of digital economy platforms in 16 provinces. It also serves the national cultural digitization strategy by creating digital exhibition platforms for institutions such as the National Natural History Museum of China and the Shaoshan Mao Zedong Memorial Museum. Building an inclusive and convenient digital society, China United Network Communications Limited is upgrading urban digital brains and expanding its digital rural platform to cover 255,000 administrative villages, comprehensively supporting rural revitalization. China United Network Communications Limited actively practices the "carbon peak and carbon neutrality" goals, jointly building and sharing 4G/5G networks, saving approximately 20 billion kWh annually, and reducing carbon emissions by over 11.5 million tons per year, contributing to the building of a Beautiful China. For instance, Smartsens Technology (Shanghai) Co., Ltd., a company listed on the STAR Market, has begun mass-producing and supplying several high-end 50-megapixel CIS chips such as SC580XS, SC550XS, and SC520XS to major domestic smartphone manufacturers. These chips are replacing those from Japan's Sony, addressing customers' bottleneck issues in core component areas and helping achieve over 90% localization of key components. China Southern Power Grid Energy Storage Co., Ltd. has overcome the blockade of foreign manufacturers and mastered the key core technology of pumped storage equipment, achieving comprehensive autonomy in pumped storage technology. This advancement has promoted the enhancement of national manufacturing capabilities, ensuring the security of the pumped storage industry chain and supply chain. By the end of 2023, Shanghai Fosun Pharmaceutical (Group) Co., Ltd. had listed four rare disease drugs, with an additional pipeline of 10 rare disease drugs under research. The independently developed artemisinin-based products continue to support anti-malarial efforts in Africa, with a global cumulative supply of over 340 million doses, treating more than 68 million severe malaria patients. The eCME multimedia online medical training project covers eight African countries, helping to enhance local medical professionals' expertise and promote the capacity building of public health in developing countries.
Harnessing the functional value of SSE-listed companies to enhance people's living standards
Based on their own resource advantages and characteristics of their industry, SSE-listed companies actively consolidate the results of poverty alleviation, help achieve rural revitalization, and further unleash their corporate functional value. This effort aims to effectively serve economic and social development, and serve the people's better life more comprehensively and fully. About 1,177 SSE-listed companies have disclosed relevant content, with a total investment of more than 100 billion yuan, to promote the sustainable and high-quality development of local industries through various re-lending and re-discounting measures such as fund assistance, consumption assistance, industrial assistance, employment assistance, talent revitalization, agriculture-related loans, agricultural and small business support.
China Shenhua Energy Company Limited has made outstanding contributions in serving the overall situation of energy and other aspects. In ensuring energy security through coal, it has achieved stable and high production levels under safe and compliant conditions. In power stability through coal-fired electricity, it fully utilizes coal-fired power as a reliable backup. In 2023, the company achieved a production of 325 million tons of commercial coal, sales of 450 million tons of coal, and a total electricity sales of 199.75 billion kWh. At the same time, the company focuses on social concerns and fulfills its responsibilities as a central state-owned enterprise. It continues to engage in public welfare activities in rural revitalization, education funding, and livelihood security. In 2023, the company donated a total of 438 million yuan and spent approximately 74.55 million yuan on rural revitalization, implementing 31 projects.
In 2023, due to Typhoon Doksuri, severe floods, landslides and other natural disasters occurred in many places. China Railway Construction Corporation Limited (CRCC) carried out emergency rescue operations on the Fengtai-Shacheng Railway, Beijing-Kowloon Railway, Beijing-Xiong'an Railway, Beijing-Yuanping Railway, Zhoukoudian Railway Station in Fangshan, Liangxiang-Chenjiafen Railway as well as Beijing, Tianjin, Hebei, Heilongjiang, Jilin and Liaoning, with a total of 40,758 employees and 4,972 sets of mechanical equipment. After a 6.2-magnitude earthquake hit Jishishan in Linxia, Gansu province, CRCC immediately engaged in rescuing the injured, establishing rescue channels, providing earthquake relief supplies, assisting affected villagers, clearing mudslides, demolishing dangerous sites, building temporary shelters, and conducting post-disaster surveys.
In fulfilling its social responsibilities, China Petroleum & Chemical Corporation has established three distinctive brand initiatives: industry assistance, education support, and consumer assistance. These efforts significantly contribute to rural revitalization, with a total investment of 230 million yuan in 2023. China Petroleum & Chemical Corporation continues to implement public welfare projects such as the "Sinopec Lifeline Express for Brightness", which over the past 20 years has provided free treatment for cataract patients from low-income backgrounds, totaling 56,000 individuals across 18 provinces and regions nationwide. Moreover, China Petroleum & Chemical Corporation is committed to fostering positive community relations by actively engaging in social communication and supervision. The company regularly hosts public open days, inviting stakeholders to visit their facilities. Over the past decade, more than 220,000 people have visited their sites through these events.
