The ESG Information Disclosure in Financial Market of China

Abstract

In recent years, ESG (Environmental, Social and Corporate Governance) has become an indispensable factor in investment decisions. ESG information disclosure of listed companies has played an important role in finance. Since companies with good ESG performance focus on long-term development and sustainable value creation. And they have better internal governance mechanisms which help to manage risks better. These companies would have stronger sustainable competitive advantages in the market. While in China’s ESG disclosure development, there still could be some issues that need to be addressed. This paper will from three perspectives to discuss the existing problems. Firstly, an official ESG disclosure framework and a regulatory force are needed to help standardize and legitimize the disclosed information. Secondly, there could be other ESG information besides the environmental problems that may also cause financial risks that need to be noticed during the disclosure. Lastly, to catch up the aggregated development of worldwide ESG disclosure, the supporting ESG infrastructure need to be improved. To solve these problems, this paper also gives relatively possible solutions: to construct a ESG management system and disclosure norms suitable for the Chinese market; to construct ESG-based bank credit facilities; to promote the development of digitalization and informatization of the disclosure.