Action Plan for Accelerating the Improvement of Environmental, Social and Governance (ESG) Capabilities of Foreign-related Enterprises in Shanghai (2024-2026)| March 05, 2024

Major objectives:

---- Create an ESG ecosystem for foreign-related enterprises under the participation and coordinated development of the municipal government, industry organizations, foreign-related enterprises, and professional service institutions by 2026

---- Provide full coverage of ESG information disclosure among State-controlled listed companies with foreign-related business

---- Significantly increase the ESG information disclosure rate among listed private enterprises

---- Initially establish a standard system for the preparation and evaluation of corporate ESG reports

---- Introduce a number of internationally renowned professional ESG service institutions

---- Cultivate a number of local ESG professional service institutions with international recognition

Major missions:

I. Improve companies' ESG capabilities

1. SOEs

-- Feasibility study of incorporating ESG information disclosure and rating for SOEs' external procurement and bidding

-- Encourage State-controlled listed companies to standardize the preparation and disclosure of ESG reports

-- Promote more SOEs to be included in the "ESG Pioneer 100 Index for Listed SOEs"

2. Private enterprises:

-- Include ESG elements in Shanghai's policy documents on supporting the development of private enterprises' headquarters

-- Explore ESG incentive mechanisms for private enterprises

3. Foreign-invested companies:

-- Encourage foreign-invested enterprises to publish reports and practical results in ESG fields such as green development, social contribution, and human resources

-- Encourage multinational companies to include their successful ESG cases in their ESG reports to the headquarters

-- Support foreign companies with ESG expertise to share their experiences with companies along the industrial chain

-- Encourage foreign companies to participate in the formulation, implementation and application of Shanghai's ESG standards and evaluation rules

4. Encourage foreign-related companies' ESG application in cross-border businesses

-- Carry out green trade and green investment in the international market

-- Undertake green projects

-- Provide professional guidance and personalized services for outbound projects' ESG capacity

-- Feasibility study of including ESG report disclosure and rating in the recognition of trade-based companies' headquarters

II. Improve the efficiency of the ESG market

5. Strengthen international exchanges and cooperation

-- Support Shanghai's industry associations and social organizations to participate in the formulation and promotion of international ESG standards

-- Incorporate ESG work into the Shanghai-Singapore and Shanghai-Hong Kong cooperation mechanisms

-- Strengthen ESG cooperation with institutions and enterprises from the countries participating in the Belt and Road Initiative

6. ESG financial service and product innovation

-- Enrich the supply of ESG index products

-- Encourage financial to provide preferential interest rates or simplify business handling processes for enterprises with high ESG ratings

-- Encourage domestic financial institutions to provide diversified financing channels such as credit, equity, and debt for international construction projects in line with ESG concepts

-- Support qualified domestic and foreign financial institutions and enterprises to issue ESG-themed bonds

-- Support the IPO of companies with good ESG performance

7. Cultivate ESG professional service organizations

-- Help local professional service institutions to expand the scope of ESG services

-- Introduce well-known ESG-related professional service institutions from home and abroad

-- Strengthen the connection between local ESG professional service institutions and foreign-related enterprises

8. Beef up the promotion of ESG concepts

III. Optimize ESG service system

9. Establish a promotion mechanism for foreign-related enterprises' ESG work

10. Introduce ESG-related supportive policies

-- Coordinate and optimize Shanghai's special funds facilitating high-quality development in commerce

-- Provide support to Shanghai's foreign-related enterprises in publishing ESG reports and holding ESG activities

11. Nurture ESG professionals

-- Encourage think tanks, academic institutions and universities to carry out researches, talent training and social services in ESG-related fields

-- Encourage universities to introduce ESG course

12. Give full play to the pioneering areas

-- Support Pudong New Area and Lin-gang Special Area of the Shanghai FTZ to align with international ESG standards in trade of goods, trade in services, digital trade and outbound investment

-- Encourage all districts to build ESG capabilities based on their competitive industries


Source: Shanghai Municipal Commission of Commerce