ESG is gaining traction among Chinese investors

Oksana Patron

26 May 2023

The expectations of Chinese investors and customers are driving the change in how fast the environmental, social, governance (ESG) concerns are gaining traction, according to Fidelity.

Its International Survey on “ESG priorities in China: How companies in China are approaching ESG” has found, after studying the view of more than 260 C-suite and director-level corporate executives based in China who worked at listed organisations, that the ESG adoption was ‘robust’ and maturing among listed corporates in China.

This means that a growing number of Chinese companies have been increasing their ESG capabilities and developing the frameworks they needed to incorporate ESG into their organisations.

But the main drivers of a change in sentiment towards the ESG factors in China remained ‘multiple stakeholders’ which included investors and customers and the shift in their views on the role the ESG considerations should play.

The data shows that more than half (53%) of the companies surveyed have publicly announced an ESG, CSR or sustainability strategy either in a report or on their website and those that have not yet made a public announcement are working hard to address this.

Additionally, almost two thirds (64%) also published annual ESG reports, while a further 29% have plans to do so within the next three years – meaning that by 2026, 93% expect to have published an annual ESG report.

At the same time, almost half of companies surveyed (47%) said they developed an ESG strategy to meet customer expectations while 44% aim to meet investor expectations.

When the organisations were asked about the strategic ESG areas they had set tangible goals to be met in the future, climate change came on top (49%) and was followed by gender representation on board (45%) and pollution management (44%), the survey found.

Also, there was a significant progress made on establishing special board functions, with nearly all firms having established remuneration and nomination committees despite it not being mandatory.

When it came to outperforming current legislation, larger firms were taking the lead on audit, remuneration and nomination committee independence, but fall back to the average when it comes to overall board independence.