The China Securities Regulatory Commission (CSRC) is considering mandatory environmental, social and governance (ESG) reporting as part of efforts to shift to a lower-carbon economy. Regulators are now formulating a framework for mandatory ESG-related disclosures for companies listed in China. The first step would be to design a standard that is recognized by the international community and applicable to the local market. China may introduce the requirements first on a “comply or explain” basis before transitioning to a full-scale compulsory framework. Chinese state-owned public enterprises are expected to take the lead on compliance. China is trying to catch up with global peers on reporting standards and meet a net zero target by 2060. CSRC vice chairman Fang Xinghai said that coming up with mandatory ESG reporting requirements was the next step.
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