Great importance has been attached to ESG investing by regulatory authorities, financial institutions, listed companies, and industry associations in China. According to the survey conducted by the Asset Management Association of China (AMAC), 87% of institutional investors are aware of ESG investing. ESG performance has become an important dimension to measure the investment value of listed companies in the market. Based on the SynTao Green Finance STαR ESG Database and its ESG Risk Radar System, this report studied more than 1,700 listed companies and in particular, reviewed and analyzed the 2018-2020 ESG rating results of A-share companies represented by the CSI 800 index constituent stocks. The major findings are:
- Both the number of ESG reports issued and the disclosure rate at indicators level increase, while the qualitative disclosure is still in a better shape than quantitative disclosure, and the voluntary disclosure information are to be enhanced.
- The overall ESG performance of A-share listed companies is steadily improving, but it is still in a developing stage. Scores for active ESG management and information disclosure moves up significantly, but ESG risk exposure over the same period of time also increases.
- Top ESG-rated listed companies shows a faster improvement of ESG performance than the bottom ones.
- 61.6% of the CSI 800 constituent companies have ESG controversies during the past year. Environmental pollution, product (service) problems, and business ethics are the most frequently seen ESG controversies.
- There is a significant correlation between ESG performance and the stock prices in A-share market.
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