"Environmental, Social and Governance" (ESG) is a corporate management philosophy and investment philosophy proposed by the United Nations in 2004, emphasizing the coordinated development of economy, environment and society, and giving full play to the power of capital to solve social and environmental problems. In the past two decades, the concept of ESG has been widely practiced and promoted by governments and market players around the world, and has become one of the mainstream investment concepts and practical strategies in developed and emerging market countries. According to the predictions of relevant institutions, by 2025, the global ESG asset scale will reach 53 trillion US dollars, accounting for 1/3 of the global asset management scale. With the deepening of the global consensus on sustainable development, the requirements of society for enterprises in green development, energy conservation and emission reduction, social responsibility, integrity management and compliance management are becoming more and more stringent, and promoting ESG practices has become an inevitable choice for enterprises in the new era, which will help enterprises form differentiated competitive advantages and help the world to make positive changes.
01
overview
The Chinese government attaches great importance to sustainable development and has taken a positive attitude to promote ESG practices in recent years. Since the 17th National Congress of the Communist Party of China, the mainland has attached great importance to comprehensive, coordinated and sustainable development, adhered to the civilized development path of production development, affluent life and good ecology, and built a resource-saving and environment-friendly society. The 20th National Congress of the Communist Party of China (CPC) further put forward the great goal of building a modern socialist country in an all-round way and promoting the great rejuvenation of the Chinese nation in an all-round way with Chinese-style modernization In the new stage of development, promoting high-quality development is an important task at present and in the future. The core values of economic prosperity, environmental sustainability, and social equity advocated by ESG are highly consistent with the mainland's important strategic goals such as high-quality development, common prosperity, and the realization of "dual carbon". These important strategic goals provide a path, point out the key points, and deepen the content for the practice of ESG in China, giving rich connotation and broad space for the practice of ESG in China. It has become an imperative task to enhance the influence and voice of the mainland in the global ESG system.
In order to thoroughly implement the spirit of the 20th National Congress of the Communist Party of China, fulfill the responsibilities of mainstream media, promote the construction of an ESG system with Chinese characteristics, and improve China's influence in the global ESG field, China Media Group, together with the State-owned Assets Supervision and Administration Commission of the State Council, the All-China Federation of Industry and Commerce, the State-owned Economic Research Think Tank of the Chinese Academy of Social Sciences, and the China Enterprise Reform and Development Research Association, will launch the "China ESG (Corporate Social Responsibility) Release" and grand ceremony in 2023. Through the construction of an ESG evaluation system that is in line with international standards and in line with national conditions, and conducts a comprehensive ESG evaluation of Chinese listed companies with greater influence on China's A-share and Hong Kong stocks, it has successively released theme reports from different dimensions such as "Annual ESG Action Report", "ESG Action Report on Technological Innovation", "ESG Action Report on Guangdong-Hong Kong-Macao Greater Bay Area", "ESG Action Report on the Financial Industry", and "Belt and Road" ESG Action Report, and held the annual ceremony of "China's ESG Role Model" at the end of the year, in the form of a matrix throughout the year. Convey the voice of responsibility, disseminate value contributions, guide Chinese enterprises to improve the level of ESG construction with the power of example, provide assistance for the high-quality development of China's economy and society, lead more Chinese enterprises to the path of high-quality and sustainable development, and take ESG as the inevitable requirement of the new era, and promote the society towards a future of harmonious coexistence and long-term common prosperity between man and nature.
The Annual ESG Best Practice Report is one of the series of activities of "China ESG (Corporate Social Responsibility) Release". Through this project, we will summarize and publicize the excellent cases of ESG practice of Chinese enterprises, better promote China's ESG construction, and lead more Chinese enterprises to the path of high-quality and sustainable development. ESG best practices refer to cases in which enterprises continue to advance, have great influence, lead and achieve outstanding results in environmental, social and governance practices, showing the characteristics of strategic, innovative, practical, social, driven, systematic and sustainable.
1. Strategic: The case practice is in line with the global ESG development trend, responds to the macro strategic positioning and policy requirements of the Party and the country, conforms to the direction of the company's business development strategy, and can give full play to the core advantages of the enterprise and help build a world-class enterprise;
2. Innovativeness: The relevant concepts, systems, processes, and methods presented in the case are innovative in promoting ESG work, and the work characteristics and highlights are outstanding;
3. Practicality: The case gives full play to the advantages of technology, resources and other advantages of the industry where the enterprise is located, and forms an effective practice plan in the fields of economy, society, environment and other fields;
4. Sociality: The content of the case has a strong role in promoting economic and social development, and reflects high environmental and social values;
5. Motivation: Case practice can enhance the positive impact of enterprises on the government, communities, employees, customers, partners, media and other stakeholders, enhance social value, and have a strong driving effect;
6. Systematic: The case practice is based on the systematic planning of the enterprise, the enterprise has a deep understanding of the practice background, has a clear route design of the practice method, has a rational analysis of customer needs, has a comprehensive judgment on the practical effect and social value, and has a careful plan for future development;
7. Sustainability: The content of the case presentation is the long-term practice of the enterprise, and the enterprise has a mature and long-term plan and future outlook for the practice;
Practicing the concept of ESG is of great significance to helping the mainland achieve coordinated economic, social and environmental development. Under the guidance of the national strategy, Chinese enterprises have opened a new era of actively responding to the ESG concept and comprehensively improving their ESG level. In the new historical period, achieving high-quality development has become the central requirement of all economic work. Chinese enterprises will adhere to the national policies and guidelines, focus on important issues such as the real economy, regional development, scientific and technological innovation, green transformation, and rural revitalization, move forward bravely and resolutely in the process of promoting Chinese-style modernization, serve the people's better life, contribute to the high-quality and sustainable development of the economy and society, and make positive contributions to global sustainable development with Chinese solutions, Chinese wisdom and Chinese strength.
02
Key findings:
1. Bear in mind the "great man of the country" and resonate with the national strategy
Outstanding case enterprises have actively responded to and deeply participated in the national strategic goals, integrated their own characteristics, and shaped ESG practices with Chinese characteristics, playing an irreplaceable and important role in helping rural revitalization, promoting the joint construction of the "Belt and Road", and further promoting "carbon peak and carbon neutrality". For example, the Ningxia Tengger Desert New Energy Base Project of the National Energy Group, as the first batch of "Shagehuang" new energy bases in China, has explored a new development model of "new energy construction + protection and restoration of Shagehuang ecosystem". Focusing on the "dual carbon" to accelerate the layout of the environmental protection industry, China Chemical has undertaken and designed polysilicon projects with a total production capacity of more than 90% of the global polysilicon production capacity, making outstanding contributions to China's photovoltaic as a new "Chinese business card" on the world stage, and also taking an important step for the world to share and reach clean energy.
Second, the company's strategy is leading, and ESG is positioned and started high
Enterprise value comes first and foremost from the economic value reflected in the return on investment and the growth of economies of scale. Fundamentally, the realization of the economic value of the enterprise depends on the creation of social value, and only the enterprise that shares the value can realize the organic combination of economic and social benefits and form a competitive enterprise. Practicing ESG is the key to sustainable development, adapting to global market competition, and becoming a "competitive enterprise". "Competitive enterprises" will strengthen top-level design from the strategic level, position ESG work in the dimensions of vision, mission and values, and integrate ESG construction with corporate development strategy. For example, ICBC adheres to the tenet of "promoting the development of the real economy through green finance", incorporates green finance into the group's development strategy, formulates a medium- and long-term development plan for green finance, systematically plans the bank-wide green finance development framework, and clarifies development goals, key tasks, organization and management, and system construction.
3. Improve ESG management, pay attention to planning guidance and system construction
An effective ESG governance system can help enterprises form advantages in value creation, risk control and market competitiveness. At the same time, ESG management, which penetrates into all levels and business links of enterprises, can also guide enterprises to form endogenous motivation for social and environmental responsibility, and promote the simultaneous improvement of social and commercial value of enterprises. Through good governance practices, the company has established a standardized corporate management system, promoted ESG construction from the top down at the governance, strategy and management levels, increased the participation of the board of directors in ESG as a whole, information security, climate risk and other issues, and gave full play to the strategic leading role of the board of directors in ESG work. For example, with the mission of "expanding the space of happiness", China State Construction has refined the "Five Elements of ESG Management", strengthened the top-level design, and built a three-tier ESG governance system of "governance layer, management level, and execution layer", so as to strengthen the foundation for ESG work and continue to create stable value for the country and society.
4. Participate in ESG practices in an all-round and multi-level manner, and work together to promote sustainable development
By promoting extensive participation in ESG construction, unblocking communication channels at all levels, cultivating and condensing the awareness of full participation, deepening the ESG culture, and achieving comprehensive synergy of ESG goals, enterprises will lay a solid foundation for long-term sustainable development. Enterprises with excellent cases use ESG concepts, actively mobilize internal resources, and achieve multi-level and all-round participation with the help of human, financial, technical and other guarantees. The company's senior leaders provide strategic guidance and decision support, and the organization's culture and values inspire internal motivation among employees. These are essential to drive ESG practices. For example, China Mobile has innovatively built a development model of "three energies and six greens", with "energy saving, clean energy, and empowerment" as the field setting, and "green network, green energy consumption, green supply chain, green office, green empowerment, and green culture" as the path setting, integrating into the overall situation of national energy transformation, and promoting the application of information technology to empower economic and social emission reduction and carbon reduction.
5. Actively interact with stakeholders to create a distinctive public welfare brand
Stakeholder engagement is an important way for companies to practice ESG values. Practicing ESG depends on the consensus of all stakeholders. Stakeholders are not only the actors and verifiers of corporate ESG results, but also important participants. Positive interaction with stakeholders can not only promote the improvement of ESG work, but also amplify the positive externalities of ESG practices and create a good social atmosphere for ESG work. Outstanding case enterprises actively interact with stakeholders, build a public welfare brand that serves the society and people's livelihood, organize volunteer activities, serve vulnerable groups in the community, create jobs, and cooperate with stakeholders to promote coordinated regional development. For example, China Resources Group's Hope Town project takes "environmental transformation, industrial assistance, organizational restructuring, and spiritual remodeling" as its four visions, and through the establishment of the basic model of "enterprise + cooperative + farmer", it makes use of the resource advantages of China Resources' diversified operation, fully explores the resource endowment of each town, and develops modern characteristic agriculture and characteristic rural tourism according to local conditions. ZTE uses the Internet of Things, artificial intelligence, big data and other technical means to improve rural infrastructure, help 24 towns and villages in Yanyuan, Sichuan Province achieve 5G signal coverage, so that the isolated mountainous areas can also get the latest information outside the mountains and even the world.
