China, People's Republic of : Piloting Environmental Information Disclosure to Promote Relevant Green Standards in the Yellow River Basin

Agriculture, natural resources and rural development / Rural water policy, institutional and capacity development

Monitoring and disclosure of the environment, social, and governance (ESG) information for public and private sector projects is a key aspect of green development. Policy reforms have been issued to strengthen awareness of and measures for the environmental information reporting and ESG disclosure in the People's Republic of China (PRC). Two new policies were issued in 2021 by the PRC's Ministry of Ecology and Environment (MEE): (i) the Reform Program for the Legal Disclosure System of Environmental Information (the Reform Program), and (ii) the Measures for the Administration of Legal Disclosure of Enterprise Environmental Information. Both policies identify the required reforms to strengthen environmental information reporting and disclosure by listed enterprises, including bond issuers. These reforms also emphasize the need for annual submission of mandatory environmental information to be reported, including details on emissions, pollution generation and abatement, and environmental management. The MEE facilitates this reform process, including through coordination with ministries, line departments, provincial government agencies, and the private sector.

In support the MEE's reform objectives and tasks, there is an urgent need to assess existing reporting frameworks to align and cope with the growing demand for green financing in the PRC. Organizational capacities in terms of environmental information reporting and disclosure must be enhanced. Important reform tasks include (i) identification and enforcement of a standardized set of environmental information and indicators which are aligned with international best practices, (ii) improvement of compliance assessments, and (iii) identification of crosscutting strategies to address varying reporting and disclosure methodologies. Environmental policy and institutional reform specialists need to work together in developing a consistent and unified reporting approach, and systematically selecting domestically applicable environmental information and indicators which match available ESG guidance. Together with strengthening the environmental information disclosure, designing an effective cross-sector environmental reporting and information-sharing mechanism based on a sector assessment and stakeholder feedback is necessary. With a knowledge-sharing mechanism designed, guidance on effective reporting which resulted from reliable disclosure of environmental information and best practices can be disseminated to influence greater participation by other stakeholders. These reform tasks are integral in (i) stimulating long-term commitments among concerned institutions, (ii) promoting regional participation for environmental information and best practices information sharing, (iii) supporting inclusion of high-quality environmental data in an ESG reporting framework, and (iv) promoting better transparency to support the PRCs green finance and sustainable investment agenda.

Focusing on environmental dimension of the ESG indicators, the expected outcome of the TA subproject will guide listed enterprises and concerned institutions on effective environmental information reporting and disclosures. Experiences and lessons learned will be applied in designing an online information-sharing platform to achieve national-level and cross-sector cooperation and promote synergies between the MEE and concerned institutions. The TA subproject will support the TA Cluster outputs by (i) leveraging from national and international best practices to identify gaps and limitations in domestic environmental information reporting; (ii) developing standardized indicators that provide practical methodology for environmental information reporting and disclosure; (iii) improving environmental information-sharing mechanisms; and (iv) strengthening cross-sector knowledge-sharing and capacity-building activities of listed enterprises for environmental information reporting and disclosure. The Asian Development Bank is providing this TA to support achieving resilient ecological protection and high-quality development for the PRC's Yellow River basin.

Resilient ecological protection and security in the Yellow River basin achieved

Cross-sector environmental reporting and information-sharing mechanism enhanced

Technical advice on cross-sector environmental information-sharing mechanism and draft green standard for environmental information disclosure developed

Draft green standard for environmental information disclosure piloted

Knowledge and capacity for environmental information sharing and governance strengthened

A team of national and international individual consultants have been engaged, following the ADB Procurement Policy (2017, as amended from time to time) to support the TA project implementation.

The recruited TA consultants will provide 25.5 person-months of consulting services, comprising one international and five national consultants: ESG specialists (international, 3.0 person-months; and national, 3.5 person-months), policy and institutional reform specialist and team leader (national, 8.0 person-months), environmental information disclosure specialist (national, 3.0 person-months), environment specialist (national, 4.0 person-months), and capacity building specialist (national, 4.0 person-months). The need for additional consultants' support will be reviewed during the TA implementation; and if required, support will be proposed as international and/or national resource persons.