It may be hard to imagine China as an emerging leader in sustainable business practices as it remains one of the world’s top carbon emitters. However awareness of ESG best practices is growing among Chinese companies, largely driven by changes in regulatory policies as part of China’s structural shift toward sustainable growth.
As with other developments in the Chinese economy, ESG may appear limited or unsystematic on the surface. Still, the scale and speed of transformation may indicate a much larger opportunity for investors.
The challenge for investors is how to see through the layers of ESG changes in China and recognize the drivers of future opportunities. Three critical factors to analyze are financing as a lever for ESG change, adoption of technology and the effective use of metrics to monitor progress.
Capital has emerged as a key lever driving environmental change in China. This is not limited to companies in environmentally link…