China issues first ESG disclosure standard based on Ping An framework

BNP Paribas has separately signed a revolving credit facility with Ant Group linked to green targets.

The first China-focused ESG disclosure standard has been released by the China Enterprise Reform and Development Society, a government think tank, based on a collaboration with powerhouse insurer Ping An and “dozens of other companies in China”.

The standard is based on relevant Chinese laws and regulation and details disclosure principles, performance indicators and the applicable regulatory framework for different companies. It can be deployed internally for ESG governance purposes or as a reference for third-party reviews.

Ping An contributed to the drafting of the standard, which incorporates the insurer’s in-house CN-ESG evaluation system framework “to provide a standardised scientific approach for corporate ESG information disclosure”.

The CN-ESG framework was created in 2020 based on the sustainability disclosure requirements of the Hong Kong Stock Exchange and the Shanghai Stock Exchange. It operates across 13 ESG themes, covering 134 mandatory and 260 optional indicators.

ESG frameworks used internationally “are difficult to match with the operating conditions in China” despite a rising interest in sustainability considerations domestically, Ping An said in a statement announcing the new ESG disclosure standard.

The standard appears to be voluntary at this stage, with no details provided on its future enforcement.

Ping An, one of China’s largest insurance companies, did not provide information on the dozens of other companies that contributed to the standard’s development but said they were “ranked among the top in their industries, with high social influence and reputation” and have implemented “the concept of sustainable development in their operation”.

In April, Ping An claimed to be the first Chinese insurer to launch an ESG bond index, which compiles the top 90 percent of listed domestic bonds rated by the state-backed ChinaBond ESG Evaluation system.

The disclosure standard, titled “Guidance for Enterprise ESG Disclosure”, can be accessed here (Chinese only).

Separately, BNP Paribas has entered into an agreement to provide sustainability-linked credit lines to Ant Group, an affiliate of the Alibaba Group and owner of China’s largest digital payment system. The fintech will be required to decarbonise its operations by 2030 in line with a pledge made last year, in addition to “using renewable energy” and donating a proportion of revenues to green projects to secure lower interest rates from the bank.

No additional details were provided in relation to Ant Group’s performance targets, such as the proportion of offsets which will count toward net zero and the value of the credit facility. BNP Paribas said it would monitor the targets via Ant Group’s proprietary enterprise carbon management platform.

BNP Paribas did not respond to Responsible Investor’s enquiries by press time.