The latest central document clarifies: exploring ESG evaluation

Issuing time:2024-01-16 08:50

In a world of constantly evolving business practices, environmental, social, and governance (ESG) principles have become key factors influencing global corporate strategies. On January 11th, the Central Committee of the Communist Party of China and the State Council issued the "Opinions on Comprehensively Promoting the Construction of a Beautiful China", in which Article 9 also clearly stated: deepening the reform of the legal disclosure system of environmental information, exploring the evaluation of environmental, social, and corporate governance. It can be seen that in China, ESG is increasingly becoming an important force in promoting high-quality economic and social development.

For businesses, understanding and utilizing these trends is not only a matter of embracing sustainable development, but can also affect your ability to attract new customers, suppliers, and investors. By grasping these five key elements, it will help you successfully achieve environmental, social, and governance transformation.

01 Driving ESG frameworks in a constantly changing regulatory environment

The business landscape is witnessing changes driven by strengthened regulation of ESGpractices, and governments around the world are introducing complex ESG related legalobligations, requiring companies to accept ESG frameworks and disclosures.

Corporate Sustainability Reporting Directive (CSRD), Financial Services Sustainability Related Disclosure Regulations (SFDR), Global Reporting Initiative's GRI Sustainability Reporting Standards, ISO26000 Social Responsibility Guidelines, SDG (United Nations Sustainable Development Goals), Climate Change Related Financial Disclosure Guidelines (TCFD) The International Sustainable Disclosure Standards (ISSB) are common international disclosure standards.

By timely understanding these regulatory changes and actively adopting relevant ESG practices, your business can not only maintain compliance but also gain a competitive advantage.


02 Deeply integrating enterprise strategy and ESG

Although ESG has achieved comprehensive development and unprecedented popularityin 2023, there are still doubts about ESG in the market. Some companies believe that ESG is just spending money, which means operating costs are rising. In fact, true ESG is not only about this, but also about creating greater and longer-term value.

With the continuous popularization of ESG knowledge, such cognitive misconceptions have gradually been reversed, and enterprises have entered a new stage. By formulating ESG strategies and action plans, establishing a board ESG committee, forming an executive level ESG working group and ESG department, setting ESG medium and long-term goals, and establishing a deep correlation between ESG and the company's business value and competitive advantage.

ESG is not just a trend, it is also a strategic compass that guides you towards sustainable development, responsibility, and success. By integrating these principles into the core of your business, you can not only contribute to a better world, but also create a brighter future for your business.

03 Adapt to rapidly developing technology and data

Technology is rapidly developing and will have a significant impact on the way businesses handle ESG. Data, artificial intelligence, and automation are reaching unprecedented capabilities. Tools like artificial intelligence have raised many concerns about the ethical use of these systems and may require additional governance to protect companies and customers from the consequences and misuse of implementing new technologies.

In addition, technology is expected to affect the existing workforce. Enterprises may need to focus on team transformation to adapt to these changes. For example, improving employees' skills in utilizing new technologies and encouraging them to take on different roles can enhance social responsibility and corporate productivity. By combining innovation with ethical considerations, your business can demonstrate the importance of ESGto your core values, helping your team thrive in the digital age.


04 Strengthen public supervision

In today's interconnected world, claims and accusations related to ESG practices are becoming increasingly common. Unethical companies face the risk of public scrutiny on news networks and social media platforms. It is expected that this public awareness will increase in the future, and companies must be prepared to improve visibility and transparency.

More information is becoming available, allowing consumers to access data in unprecedented ways. For example, a clean product company claiming to be environmentally friendly may need to increase transparency in its supply chain and production methods so that consumers can verify these claims. By clearly communicating your sustainable practices and publicly sharing data and third-party certifications, your business can build trust with consumers and help them recognize that you are an ethical and socially conscious enterprise.

05 Protecting Your Supply Chain

The integrity of the company's supply chain has never been so important. Governments,investors, and customers are increasingly demanding that companies comply with ESG related standards when selecting suppliers. These factors include avoiding suppliers whouse unsustainable transportation methods, environmentally damaging manufacturing processes, and human rights issues.

Focusing on supply chain ethics and sustainable development not only aligns with your ESG goals and ensures operational resilience, but also attracts new customers and investors to develop your business.

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