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Climate disclosures: China’s ESG rules for listed firms could spur private firms to set net-zero targets, analysts say

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By illuminem briefings

· 2 min read

illuminem summarizes for you the essential news of the day. Read the full piece on SCMP or enjoy below:

🗞️ Driving the news: China's new ESG rules requiring listed companies to disclose climate commitments may spur private firms to set net-zero targets
• Analysts predict this development could address the current disparity, as only 38 of the world's 100 largest private firms have set net-zero targets, compared to 70 of their listed peers

🔭 The context: The new guidelines by Beijing, Shanghai, and Shenzhen stock exchanges demand sustainability reports from over 400 listed companies by 2026, covering both direct and indirect emissions
• This move is part of a global trend towards ESG disclosures, aligning with international standards

🌍 Why it matters for the planet: The new regulations aim to encourage not only listed but also private firms to tackle climate change
• This could significantly reduce greenhouse gas emissions, addressing the private sector's lag in making decarbonization commitments

⏭️ What's next: As listed companies enforce these new requirements, private firms in their supply chains will likely face pressure to disclose emissions, potentially resulting in more net-zero pledges and broader decarbonization efforts

💬 One quote: "With the three major stock exchanges now mandating double materiality and emissions information, private firms are obviously looking at the torch that is potentially coming for themselves," said John Lang, project lead at Net Zero Tracker

📈 One stat: Only 38 of the world's 100 largest private firms have set net-zero targets, compared to 70 out of 100 of their listed peers.

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