The Necessity for Developing a Mandatory Environmental Information Disclosure System for ESG in China: From the Perspective of Corporate Compliance

Zehua Zhang

doi:10.54097/rek4ft14

Authors

Zehua Zhang

DOI:

https://doi.org/10.54097/rek4ft14

Keywords:

Mandatory environmental disclosure, ESG, Corporate transparency, Corporate compliance, Compliance incentive, Greenwashing

Abstract

This paper explores the necessity of establishing a mandatory environmental information disclosure system in China. As global pressures for climate change and environmental protection increase, governments worldwide are enhancing requirements for non-financial corporate disclosures. China, as the world's second-largest economy, is improving its ESG (Environmental, Social, and Governance) disclosure regulatory framework to promote corporate compliance and sustainable development. However, the current scope of environmental information disclosure in China is limited and its effectiveness is minimal. This paper argues that comprehensive mandatory environmental disclosure is crucial for enhancing corporate transparency and investor confidence. It also helps prevent greenwashing and carbon washing practices, reducing legal and reputational risks for companies. To achieve effective environmental information disclosure, the paper suggests developing standardized disclosure guidelines, establishing compliance incentive systems, and fostering a corporate culture of green compliance, thus promoting ecological civilization construction in China.

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