The Guidebook for the Implementation of ISSB Standards in China officially released

2024-11-25未知责任编辑0

On October 30 , the academic hall of Central University of Finance and Economics overflowed with passion. The Seminar on the Application of ISSB Standards in China and the launch event for The Guidebook for the Implementation of ISSB Standards in China (hereinafter referred to as the “Guidebook ”) kicked off at this hall.

Numerous experts, including Professor Guo Dongmei, Dean of the School of Economics of Central University of Finance and Economics, Mr. Pan Chunsheng, member of the Party Committee and Vice President of China Association for Public Companies，Mr. Zhang Zhengwei, Special Advisor to ISSB Chair and Director of IFRS Beijing Office, Mr. Zhang Weiguo, a professor from Tsinghua University and Shanghai University of Finance and Economics, Chief Accountant of The China Securities Regulatory Commission (CSRC), former Executive Director of International Accounting Standards Board, participated in the event and witnessed the launch of the book, and made keynote speeches or comments on this new book.

As the first comprehensive interpretation of the ISSB standards in China, the Guidebook is co-authored by Mr. Yin Gefei, Chief Expert of GoldenBee Consulting and Ms. Liu Yifang, Director of Sustainability Standards Research Center at the Central University of Finance and Economics.. It brings together the wisdom of many seasoned experts and took more than a year to complete.

The Guidebook, based on the disclosure standards, revolves around seven parts, namely, the background, basic requirements, governance, strategies, risk management, indicators and goals, and disclosure suggestions of the standards. The kernel of this guidebook, disclosure, is presented in the form of “article interpretation+typical cases+case comments” and provides explicit and actionable guidance for Chinese companies to disclose information following the ISSB standards. Therefore, it is of guiding significance in helping Chinese listed companies to better understand and implement the ISSB Standards .

Ms. Guo Dongmei noted in her welcoming address that the publication of the Guidebook will exert far-reaching influence on the academic, education and business communities from the perspectives of optimizing discipline setting and cultivating talents. “This book will not only be an significant achievement in the realm of international financial report standards in our country, but will also offer us a window into ISSB standards and promote the implementation of these standards.”

According to Mr. Yin Gefei, GoldenBee Consulting joins hands with Sustainability Standards Research Center in conducting studies on sustainability disclosure and publishing findings in Sustainability Disclosure Book Series in order to help Chinese enterprises better adapt to the latest global trend of sustainability disclosure. The Guidebook unveiled this time is merely the first volume of this series, with other volumes being published afterwards.

Ms. Liu Yifang also stated that the editorial board and the writing group have finished the initial draft work of the second volume of the series, which focuses on interpreting relevant information about climate. This book, featuring the four pillars of ISSB Standards, governance, strategies, risk management, goals and indicators, industry guidelines and other two parts, will continue to follow the mode of combining the interpretation of the articles, typical cases and case comments.

The emergence of the Guidebook
The release of The Guidebook for the Implementation of ISSB Standards In China ——The Interpretation and Implementation of IFRS SI

In recent years, sustainable development has become a common consensus and shared goal of the world. Meanwhile, the sustainable development of enterprises has riveted attention from the whole society and has been taken into consideration when investors are making decisions. Against this backdrop, publishing an excellent ESG report echoes with the trend of the times and listed companies are increasingly willing to actively disclose sustainability information. According to the latest data from the Securities Times, 2,211 A-share companies has released their ESG-related reports for 2023, with disclosure rates reaching 41.4% and hitting a record high. However, listed companies are still confronted with challenges in disclosing sustainability information. Standards set by agencies from home and abroad are complicated, increasing compliance difficulties for these companies. Over 60% of listed companies expect that there will be more concrete and authoritative information disclosure rules so that the disclosure quality can be improved through simplified procedures.

In June 2023, the ISSB issued the first two IFRS Sustainability Disclosure Standards - General Requirements for Disclosure of Sustainability-Related Financial Information and Climate-Related Disclosures, which marks an important step forward in helping to address the aforementioned challenges. Universally accepted standards not only help reduce the difficulty of sustainability disclosure, but also cut disclosure costs and improve the efficiency of report preparation. Therefore, global sustainability and information disclosure have entered a new stage of development.

China has made quick response. On April 12, 2024, under the unified deployment of the CSRC, the Shanghai, Shenzhen and Beijing Stock Exchanges issued the Sustainability Reporting Guidelines for Listed Companies (hereinafter referred to as the "Guidelines"), which for the first time systematically regulates the disclosure of sustainability-related information by listed companies. In line with the global sustainability disclosure standards, the Guidelines better reflects the actual situation in China, and has become a milestone in the disclosure of sustainability-related information of listed companies in China.

“The ISSB Standards, developed by pooling collective wisdom of stakeholders, are recognized globally as a model for high-quality sustainability disclosure standards. By guiding companies to disclose sustainability-related information, it will help improve corporate transparency and enable investors to comprehensively assess corporate sustainability risks and opportunities," said Mr. Zhang Weiguo, who spoke highly of the release of the ISSB Standards. Mr. Yin Gefei also said that the introduction of the new standards shows that global sustainability disclosure is becoming more consistent, comparable and explicit, helping stakeholders to more clearly identify the "externalities" of a company's economic activities. The release of new standards will also allow investors, lenders, and other creditors to be more forward-looking in exploring investment opportunities that are in tune with the goal of getting long term sustainable returns. In addition, it enables investors to avoid sustainability-related risks and the financial risks arising from transmission effects more effectively. However, the ISSB Standards, a new benchmark standards for sustainability disclosure, are commonly applicable to major global enterprises, but the specific disclosure requirements and indicator design still need to be localized to fit our country's actual situation. With the purpose of helping Chinese enterprises to better interpret the ISSB Standards and to further comprehend and implement the Guidelines so as to give sustainability disclosure into full play in improving enterprises’ competitiveness, GoldenBee Consulting made concerted efforts with Sustainability Standards Research Center in publishing the Guidebook. The release of the book could not have come at a better time.

The Guidebook released at an opportune moment
#The release of The Guidebook for The Implementation of ISSB Standards in China ——The Interpretation and Implementation of IFRS SI#

During the height of the launch event, the participants also witnessed the inauguration of the Guidebook by Mr. Yin Gefei and Ms. Liu Yifang. The two scholars also highly commented this new book, especially for the fact that the book is written in the mode of “article interpretation + typical cases + case comments”. Each article is presented along with some typical cases of sustainability disclosure and professional comments, thus rendering the standards more comprehensible for Chinese enterprises. Besides, Mr. Yin Gefei, one of the editors of the book, shared his initial purpose when writing this book, saying that with he ISSB Standards officially released and put into practice, Chinese enterprises will see seven trends in sustainability-related information disclosure, and that there will be more standardized and compulsory requirements in this regard. What lies behind are the management logic and the situation of enterprises. It also reflects that investors and other stakeholders increasingly focus on the ESG value of enterprises, which represents unprecedented both opportunities and challenges for Chinese enterprises.

“How to respond to those changes and trends is not an option, but a call we must answer,” said Mr. Yin Gefei. He also made brief introduction to the chapters and contents of the Guidebook. “In the future, the editorial board of Sustainability Disclosure Book Series will continue to focus on subject research and contribute more cutting-edge research achievements to the disclosure of sustainability-related information to ensure that Chinese enterprises will better showcase the value of sustainable development through conversations with investors and other stakeholders and serve as contributors to sustainable development of the society.”

Mr. Pan Chunsheng noted in his speech that the contents of the Guidebook align with the Guidelines to a certain degree. This book not only provides a reference for the enterprises to comprehend ISSB Standards, but also offers a guidance for listed companies to have a deeper understanding about sustainable development. “In ancient times, China boasted the Four Great Inventions. In today’s world, the advancement of the ISSB Standards also needs to draw wisdom from the Four Great Inventions. The Guidebook published today can be compared to a compass.” Mr. Zhang Zhengwei cited the Four Great Inventions to highlight that promoting the ISSB Standards entails the supports, implementation and advancement by watchdogs and all sectors. He added that all companies, listed or non-listed, large-sized or small and medium-sized, should notice this institutional change until sustainability disclosure became a mandatory rule with a unified system and covered all companies. “We should be well-prepared since the ISSB Standards are set to being implemented soon,” Mr. Zhang Zhengwei noted. “When enterprises disclose sustainability-related information according to ISSB Standards, they are also confronted with multiple challenges brought by the credibility of the information, disclosure of risk factors, the blueprint for development and the confidentiality of commercial information. The Guidebook provides relevant knowledge for the enterprises in tackling the above-mentioned challenges,” said Mr. Zhang Weiguo and he described the book as “the best practice that is in line with the international trends and Chinese rules, and an action that speaks louder than words” when commenting on the new book. His comments illustrate his appreciation and expectations for the Guidebook from the perspective of international standards, local application and practice mode.

Experts present in the launch event made splendid speeches, filling the hall with excitement. After the inauguration of the Guidebook, participants from enterprises made in-depth discussion with the experts about the implementation of ISSB Standards in China. In addition, representatives from Goldwind, China Communications Construction Group, China Certification and Inspection Group and other enterprises shared their experience in sustainability-related information disclosure and third party certification.

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