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A Comparison of the Development of ESG System Both at Home and Abroad and Policy Options for Improving the System in China (No.217, 2018)


By Chen Ning & Sun Fei, Research Institute of Finance, DRC

Research Report, No.217, 2018 (Total 5492) 2018-12-12

Abstract: The development of the ESG (environment, social responsibility and corporate governance)system can be evaluated from the following three dimensions including the ESG information disclosure principles and guidance, corporate ESG performance rating and ESG investment guidance. The international ESG system was originally derived from the spontaneous movement of the public and the promotion driven by non-profit organizations. Subsequently, some international organizations such as the United Nations began to develop ESG-related principles and frameworks and promoted the adoption of ESG disclosure standards among stock exchanges in the globe. By now, a relatively complete ESG information disclosure and performance evaluation system has gradually taken shape. However, China's government-led ESG system still remains inadequate without a full-fledged evaluation and investment system. China needs to move faster to promote and improve the overall institutional framework of ESG system and propel the shift of ESG from spontaneous-based to mandatory-oriented information disclosure measures relating to corporate ESG system. In addition, it is necessary to strengthen the construction of the ESG database and promote the exchanges and cooperation between entities in the industry, industrial associations, regulatory sectors covering industry, commerce, taxation, environmental protection and finance so as to fully bring out the effects of the ESG system through corporate development.

Key words: ESG system, performance evaluation, social responsible investment