A-shares ESG mandatory disclosure faces the "first test": 192 companies have already "submitted their exams"

Daily Securities reporter Wu Xiaolu

This year, A-share listed companies’ sustainability (ESG) reports are taking their “first exam” under mandatory disclosure. According to incomplete statistics by this reporter based on listed company announcements, as of April 7, 567 listed companies had already published their 2025 ESG reports, including 192 listed companies that fall within the scope of mandatory disclosure.

Experts interviewed by Daily Securities said that in recent years, the completeness of ESG report disclosures has improved, with content becoming more detailed and objective. Reporting has gradually shifted from qualitative descriptions to quantitative data presentation, enhancing comparability and transparency. Next, listed companies’ ESG reports will move from “mandatory disclosure” to “value disclosure.”

Li Jing, Managing Partner in charge of ESG and sustainability for EY Greater China, said in an interview with Daily Securities that going forward, it will be necessary for multiple parties—including regulators, enterprises, the market, and intermediaries—to work in concert to expand the volume of ESG disclosures and improve their quality, to make ESG a core driving force behind high-quality development for listed companies, and to help the capital market better support the green transition.

Forty percent of mandatory disclosure entities have already “turned in their papers”

ESG reports are known as the second “financial statements” of listed companies, and they are becoming necessary non-financial information for the market to assess enterprise value, risks, and long-term competitiveness.

Pursuant to the Guidelines for Information Disclosure of Listed Companies’ Sustainability Reports issued by the Shanghai, Shenzhen, and Beijing Securities Exchanges (hereinafter referred to as the “Guidelines”), the sample companies of the Shanghai 180, STAR Market 50, Shenzhen 100, and the ChiNext Index, as well as companies listed simultaneously both domestically and overseas, are required to make their first disclosure of their 2025 sustainability reports by April 30, 2026. This marks that ESG reports have officially become a company’s “required question.”

According to Wind data, as of April 7, there were 470 listed companies included in the mandatory disclosure scope. Of these, 192 had already published ESG reports, accounting for 40.85%.

In recent years, as China’s domestic ESG disclosure system has continued to improve, both the number and quality of ESG report disclosures by listed companies have kept rising. Since 2024, the Shanghai and Shenzhen and Beijing exchanges have successively issued the “Guidelines” and the Compilation Guide for Sustainability Reports of Listed Companies (hereinafter referred to as the “Guide”). The China Association of Listed Companies and the Shanghai Stock Exchange have also released practical case studies in sequence, providing listed companies with clearer and more operational “reference materials” for disclosing ESG reports. In 2025, nearly 1,900 listed companies disclosed sustainability reports, bringing the overall disclosure rate to nearly 35%.

“With the “Guidelines” and the “Guide” rolling out one after another, companies’ disclosure frameworks have gradually become unified, and the completeness of the four core elements (governance—strategy—risk management—metrics and targets) has improved significantly. For example, after the “Guide” on addressing climate change was released, more companies started to disclose Scope 1 and Scope 2 greenhouse gas emissions, and some leading enterprises have even begun to try Scope 3 accounting.” Shen Lina, Head of the Green Finance Business Division at Faryou Credit Information, told Daily Securities.

In Li Jing’s view, under the guidance of regulators, market promotion, and joint efforts across the industry, listed companies have made clear progress in areas such as ESG information disclosure, improved governance structures, and implementation of green practices. The ESG philosophy has gradually shifted from external advocacy to internal management. The level of attention from market participants, practical capabilities, and information transparency have all improved steadily, and the overall development trend has continued to look positive.

Further unleash companies’ intrinsic motivation

At present, listed companies’ ESG reports show structural differentiation: leading companies and mandatory disclosure entities have relatively standardized ESG reports, but small- and mid-cap companies still tend to be rather simplified.

“The standardization of disclosures by mandatory disclosure entities continues to improve.” Li Jing said that the rollout pace of non-mandatory disclosure entities varies. For some companies, the completeness and focus of information disclosure still need to be strengthened, and there is still room to improve the uniformity of data definitions and the completeness of quantitative indicators, leaving a gap from the goal of presenting companies’ sustainability practices in a high-quality and all-round manner.

Wang Yao, Dean of the International Research Institute of Green Finance at Central University of Finance and Economics, said in an interview with Daily Securities that small- and mid-cap enterprises—especially those in private manufacturing, traditional energy, agriculture, and other sectors—lack sufficient disclosure willingness and capability due to constraints such as professional talent and cost pressure. ESG practices in these companies are still at the initial stage, and overall disclosure performance still has room for continued improvement.

ESG information disclosure is not simply about meeting regulatory requirements; it must be transformed into an internal need for enterprise value management, risk control, and improving long-term competitiveness. Market participants believe that moving ESG from “mandatory disclosure” to “value disclosure” is an inevitable path for ESG development among A-share listed companies, and further efforts are needed to stimulate listed companies’ intrinsic motivation to disclose ESG information.

Li Jing believes that it is possible to build a “three-tier coordination mechanism” to fully unleash enterprises’ endogenous disclosure motivation. Internally, ESG should be integrated into the full chain of strategy and operations. At the system level, it is necessary to further improve the rules and mechanisms for positive incentives, accelerate the issuance of industry-specific application guidelines, and refine the specific methods for calculating environmental, social, and governance indicators. In the market arena, it is important to guide institutional investors to systematically incorporate ESG factors into investment decision-making and post-investment management, and to convey clear ESG information requirements to enterprises. It is also necessary to support the development and application of ESG indices; by guiding capital flows toward high-quality ESG enterprises through index-based investing, a positive cycle of “high-quality disclosure—access to capital—improving performance” can be formed.

Wang Yao suggested advancing the effort from three dimensions: policy, market, and capacity building. On the policy dimension, enterprises’ ESG performance could be linked with green credit interest subsidies, government green procurement, and so on, so that companies can see that “green credit” is directly converted into “cash benefits.” On the market dimension, it is necessary to promote the exploration of mechanisms linking ESG performance with refinancing review and with green channels for merger and acquisition restructuring, enabling high-quality enterprises to obtain capital facilitation. On capacity building, it is important to develop lightweight, industry-oriented ESG disclosure tools and digital platforms for small and mid-sized enterprises to lower disclosure thresholds and cost burdens.

Promote a virtuous cycle between ESG disclosure and investment

ESG information disclosure and ESG investment complement each other and promote one another. With the growth of ESG disclosures by listed companies, the scale of ESG investment has continued to expand. According to statistics, as of the end of 2025, the combined size of China Securities Index and GuoZheng sustainability index products was about RMB 125 billion, which is more than double compared with the end of 2020.

Market participants believe that, at present, the development of ESG funds is still constrained by multiple dimensions. Wang Yao said that on the one hand, ESG investment and research capability building at fund companies generally lags behind the speed of product innovation. Many institutions’ ESG investment practices remain at the level of “negative list screening” or “industry thematic investing,” and have not yet formed the ability to systematically integrate ESG factors into the full process of fundamental analysis, valuation models, portfolio construction, and risk management. On the other hand, the ESG data infrastructure also constrains the quality of investment research decisions. In recent years, the number of ESG data providers has increased rapidly, but there are still obvious shortcomings in terms of data coverage, update frequency, indicator comparability, and the length of historical traceability.

Wang Yao further said that high-quality disclosure provides investors with a basis for decision-making, reduces information acquisition costs and uncertainty, and attracts more capital inflows. Meanwhile, the expansion of investment demand also incentivizes companies to improve their ESG performance and enhance the quality of their disclosures, thereby creating a positive feedback loop.

Regarding how to promote a virtuous cycle between ESG information disclosure and ESG investment, Li Jing said that it is necessary to focus on three core aspects—“data foundation building—demand pull—supervision and oversight escort”—to construct a closed-loop ecosystem. First, strengthen the data foundation. Taking the rollout of mandatory disclosure as an opportunity, drive companies to disclose quantitative indicators that are continuously comparable, unify calculation definitions, encourage third-party assurance or verification, and establish unified data standards, so as to provide reliable “raw materials” for investment. Second, strengthen the demand pull by guiding long-term capital to increase allocations, enrich the ecosystem of investment products, and broaden the boundaries of ESG investing. Finally, improve the supervision and evaluation system; strengthen through-supervision of ESG fund products, promote standardized construction of ESG rating agencies, establish linkage mechanisms between ESG disclosure and investment, and guide companies to place greater importance on the long-term value of ESG disclosure.