The Global Convergence of Standards
for Climate-related Disclosure
Enterprises need to take immediate action to prepare for the future
Chinese companies’ 2022 CDP disclosure report
April 2023

1

Overview of environmental information disclosure on
CDP platform (April 2023)

18,700+300+

Companies representing half of global
market capitalization disclose to CDP

740+

Investors with over US$130 trillion in
assets requested companies makeenvironmental disclosure through CDP

CDP supply chain members

wielding over US$5.5 trillion in

1,100+

purchasing power

Cities, states, and regions shared best practiceImportant Notice
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4

CONTENTS

Executive summary...............................................................................................................................6
1. The development and future trend of global climate policy and sustainability disclosure
standards..............................................................................................................................................8
1.1 Broader consensus on and cooperation in global climate governance.............................8
1.1.1 China will work actively and prudently toward the goals of reaching peak carbon
emissions and carbon neutrality, and implement the National Strategy for
Climate Change Adaptation..............................................................................................8
1.1.2 EU promotes sustainable development through further legislation, requiring
companies to disclose sustainability information.......................................................9
1.1.3 China and the US resume climate cooperation and launch the Framework forTransition Finance to support green development....................................................10
1.2 National and international sustainability disclosure standards gradually converge.....10
1.2.1 The Global Sustainability Disclosure Standards will be launched soon, which
may accelerate the convergence of international standards..................................11
1.2.2 EU and the US introduce climate-related disclosure requirements compatible
with the TCFD framework................................................................................................11
1.2.3 China accelerates sustainable development, with HKEX taking the lead inaligning with international standards............................................................................12
2. A panorama of CDP disclosures and CDP development trends in 2022...........................14
2.1 The number of global and Chinese CDP disclosures continues to grow at a high rate,with an annual growth rate of over 40%..............................................................................14
2.2 CDP together with other parties continues to drive response to climate change in
China and globally....................................................................................................................15
3. Analysis of the CDP questionnaire responses by Chinese companies and key findings....17
3.1 Governance: improving top-level design.............................................................................18
3.2 Strategy: enhancing climate assessment...........................................................................20
3.3 Risk management: improving management framework.................................................23
3.4 Metrics and targets: proactively expanding the scope.....................................................25
3.5 Brief summary............................................................................................................................30
4. Case study............................................................................................................................................32
4.1 Ping An Insurance (Group) Company of China..................................................................32
4.2 Yanfeng.........................................................................................................................................35
4.3 Zhongxing Telecommunication Equipment Corporation (ZTE).....................................38
5. Prospects............................................................................................................................................42
6. Appendix (CDP methodological framework & technological standard updates)............44
Acknowledgements............................................................................................................................46
5

Executive summary

The year 2022 witnessed broader consensus on global climate governance reached by theinternational community and more opportunities for cooperation. The 27th session of the Conferenceof the Parties of the UNFCCC (COP 27) was successfully convened in November and at the meeting,governments agreed to establish a Loss and Damage fund to provide financial support to developing
countries. The EU continued to lead the world in climate change-related legislation, passing the moststringent regulations. The Group of Twenty (G20) Sustainable Finance Working Group, co-chairedby China and the US, released the G20 Framework for Transition Finance, to promote the financial
sector's support for the transition of high-carbon emitting sectors to low and net-zero paths. China
has been implementing the National Strategy for Climate Change Adaptation, establishing a policy
system for reaching peak carbon emissions and carbon neutrality.
International sustainability disclosure standards gradually converged, attaching great significanceto climate change. In March 2022, the International Sustainability Standards Board (ISSB) published
two exposure drafts of IFRS® Sustainability Disclosure Standards (ISDS), namely IFRS General
Requirements for Disclosure of Sustainability-related Financial Information (S1) and IFRS Climaterelated Disclosures (S2). ISSB has taken its final decisions on the technical content of the drafts of
ISDS, with their expected issuance at the end of Q2 2023;1 The EFRAG Project Task Force on European
Sustainability Reporting Standards (EFRAG PTF-ESRS) released the first set of draft European
Sustainability Reporting Standards (ESRS); The United States Securities and Exchange Commission(SEC) has released a regulation on climate-related disclosures for listed companies in the country.
Besides enhancing requirements for the disclosure of environmental information, China has been
striving to align with international standards, with its Hong Kong SAR taking the lead. For example,
the Hong Kong Exchanges and Clearing Limited (HKEX) issued the Guidance on Climate Disclosuresin November 2021, requiring companies to strengthen climate disclosures; It is expected that listedcompanies in relevant industries in Hong Kong will have to make climate-related disclosures in line withthe the Task Force on Climate-Related Financial Disclosures (TCFD) framework by 2025.
1

6

Available at https://www.casc.org.cn/2023/0224/238659.shtml

In 2022, CDP has been working with multiple parties to actively promote corporate responses
to climate change by planning to include S2 in its environmental disclosure platform from 2024
onwards, creating an open framework that makes environmental disclosure easier for small
and medium enterprises (SMEs) and other businesses, and including questions on issues suchas biodiversity in its questionnaire. In 2022, the number of global and Chinese CDP disclosurescontinued to increase at a high rate, with an annual growth rate of over 40%. Among them, more than
2,700 companies in China (including Hong Kong, Macao, and Taiwan) participated in CDP disclosure,an increase of 43% over last year.
Drawing on the TCFD framework, companies have taken actions to respond to climate change
focusing on the four pillars of governance, strategy, risk management, and metrics and targets.
According to the 2022 disclosure data collected by CDP, more than 20% of Chinese companies
have conducted scenario analysis to identify climate related risks and opportunities; more than
30% of Chinese companies have incorporated climate change into their corporate strategies; morethan 40% of Chinese companies have provided incentive measures for managing climate issues;nearly 60% of Chinese companies have set carbon reduction targets; and more than 70% of Chinesecompanies have board level participation in climate governance. It is expected that in the future, theofficial release of ISDS will guide Chinese companies to further improve their climate governanceand assess climate impacts in a scientific and systematic manner. Fewer than 20% of Chinesecompanies currently disclose their Scope 3 emissions from purchased goods and services, below
the global disclosure average. However, in 2022, the percentage of Chinese companies disclosing
Scope 3 emissions has already increased in relation to 2021, and it is expected that as China's
carbon emissions database is established across industries, more companies will follow the ISDS
guidelines to disclose their Scope 1, 2 and 3 GHG emissions, further closing the gap with global
percentages.
Amid rising global uncertainty and strategic opportunities and risks, in addition to actively
addressing climate risks, Chinese companies should seize opportunities related to climate change,
seek green cooperation, identify their direction in terms of climate strategy in the changing
environment, further enhance environmental and sustainability disclosure, and lay a solid foundation
for their development in the global market.

71. The development and future trend of global
climate policy and sustainability disclosure
standards
1.1 Broader consensus on and cooperation in global climate governanceIn 2022, amid the slow recovery of global economy from the impact of the Covid-19 pandemic
and the ongoing Russia-Ukraine conflict, global energy-related CO 2 emissions grew by 0.9% 2.
Considering the current carbon emissions and the remaining carbon budget, there is now a 50%
chance that global warming of 1.5°C will be exceeded in nine years3. Against this backdrop, COP27,
convened in November 2022, achieved a historic outcome with governments agreeing to provide “lossand damage” funding for vulnerable countries hit hard by climate disasters. In the same year, at the
15th Conference of the Parties (COP15) to the Convention on Biological Diversity convened by the
UN in Montreal, governments agreed on a new Global Biodiversity Framework committing to protect
30% of Earth's lands and oceans by 2030. Among targets of the framework, it is required to ensurethat large and transnational companies and financial institutions disclose their risks, dependencies,
and impacts on biodiversity.
1.1.1 China will work actively and prudently toward the goals of reaching peak carbon emissions
and carbon neutrality, and implement the National Strategy for Climate Change Adaptation
In October 2022, the 20th National Congress of the Communist Party of China was held, andthe report to the Congress proposed that "China will work actively and prudently toward the goalsof reaching peak carbon emissions and carbon neutrality". Based on China's energy and resource
endowment, we will advance initiatives to reach peak carbon emissions in a well-planned andphased way in line with the principle of building the new before discarding the old. We will exercise
better control over the amount and intensity of energy consumption, and transition gradually toward
controlling both the amount and intensity of carbon emissions. We will promote clean and highefficiency energy use. We will speed up the planning and development of a system for new energy

2

CO2 Emission in 2022 published by International Energy Agency in March 2022

3

Carbon Budget 2022, from Global Carbon Project8

sources, and strengthen our systems for energy production, supply, storage, and marketing to ensure
energy security. We will improve the statistics and accounting system and the cap-and-trade systemfor carbon emissions. The carbon absorption capacity of ecosystems will be boosted. We will get
actively involved in global governance in response to climate change.” 4
The National Strategy for Climate Change Adaptation 2035, jointly released by 17 departments
in May 2022, states that "Based on the exposure and vulnerability of various areas and regions to
the adverse impacts and risks of climate change, it further clarifies the key areas, regional patterns,
and assurance measures for China's climate change adaptation work.” 5 The strategy follows
the ecosystem approach, covering both the natural ecosystems and the social and economic
systems. In order to achieve China's 2035 vision, it proposes major measures, such as analyzing
and assessing the impacts and risks of climate change, improving the climate change governancesystem, forming a working system of climate system observation – impact risk assessment – taking
adaptation actions – evaluation of action effectiveness, and enhancing society's climate change
adaptation awareness and ability.
1.1.2 EU promotes sustainable development through further legislation, requiring companies todisclose sustainability information
In November 2022, the European Parliament and the EU Council adopted the Corporate Sustainability
Reporting Directive (CSRD). The CSRD will cover all undertakings listed on a regulated market in the EU,
and all large companies incorporated in a EU member state that meet two of the following threecriteria for two consecutive years (balance sheet total assets greater than €20 million, a net turnoverof more than €40 million, or an average number of employees during the financial year of more than 250);
with respect to non-EU incorporated companies that have one subsidiary listed on a EU regulated market,
have significant EU revenues, or have one subsidiary in the EU that meets some of the large company
requirements, disclosure obligations need to be fulfilled at the group or subsidiary level as appropriate.
Also, under the current CSRD proposal, reporting information must be subject to third-party attestations.
Under the CSRD proposal, the scope of companies covered by the mandatory disclosure of sustainability
information and the requirements of disclosure will be significantly increased.

4

Report to the 20th National Congress of the Communist Party of China, October 16, 2022

5

For details, see The National Climate Change Adaptation Strategy 20359

1.1.3 China and the US resume climate cooperation and launch the Framework for Transition
Finance to support green development
In November 2022, G20 Summit was held in Bali, Indonesia. The day before the official openingof the G20, Chinese President Xi Jinping met with the US president Joe Biden and agreed to jointly
work for the success of the 27th Conference of the Parties to the United Nations Framework
Convention on Climate Change (UNFCCC). Since China and the US, the world's two largest emittersof greenhouse gases, account for 40% of global carbon emissions, their agreement on climate
issues could help drive the steady development of the global climate governance system. The G20
Bali Summit adopted the G20 Framework for Transition Finance, the outcome of the G20 Sustainable
Finance Working Group, which is co-chaired by China and the US The main purpose of the framework
is to promote the financial sector's support for the transition of high-carbon emitting sectors to low
and net-zero carbon. The Framework for Transition Finance includes five pillars: identification oftransition activities and investments, reporting of information on these activities and investments,
developing transition-related finance instruments, designing policy measures, and assessing andmitigating the negative social economic impacts of transition activities and investments. The
landmark framework provides a reference of basic principles for countries to prepare transition
finance policies.

1.2 National and international sustainability disclosure standards graduallyconverge
In response to the International Organization of Securities Commissions (IOSCO) statement
calling for globally consistent, comparable and reliable sustainability disclosure standards, the IFRS
formally announced the establishment of ISSB during COP26. Created to meet existing international
disclosure requirements, ISSB consolidated several international organizations such as theInternational Integrated Reporting Council (IIRC), the Climate Disclosure Standards Board (CDSB),
the Sustainability Accounting Standards Board (SASB), and signed a Memorandum of Understanding
with the Global Reporting Initiative (GRI). The disclosure framework developed by ISSB is based on
the four pillars of the TCFD and the work of ISSB is supported by the G20. During COP27, CDP alsoannounced that it would incorporate the IFRS S2 Climate-related Disclosures into the CDP disclosure
10

platform from the 2024 disclosure cycle onwards. Major countries or regions have recently issued
their own sustainability disclosure standards, which are to a large extent compatible with the TCFD
framework and attach great significance to climate risk.
1.2.1 The Global Sustainability Disclosure Standards will be launched soon, which may accelerate
the convergence of international standards
In March 2022, the ISSB published two exposure drafts of IFRS® Sustainability DisclosureStandards (hereinafter referred to as ISDS), namely IFRS S1 General Requirements for Disclosureof Sustainability-related Financial Information (hereinafter referred to as S1) and IFRS S2 Climaterelated Disclosures (hereinafter referred to as S2), with the final standards currently proposed to bereleased by the end of the second quarter of 2023. Drawing on the TCFD framework, both S1 and S2
focus on the four pillars of governance, strategy, risk management, and metrics and targets, with S1
focusing on the overall disclosure requirements related to corporate sustainability and S2 focusing
on the disclosure requirements for corporate climate-related topics.
In February 2023, the ISSB decided to introduce a requirement to permit preparers toconsider open-ended sources of guidance to identify and disclose sustainability-related risks
and opportunities. This means that in the short term, companies can follow other establishedsustainability disclosure standards or frameworks when identifying sustainability-related risks andopportunities other than climate change (such as SASB or GRI). But in the long term, companies
should consider understanding, sorting out or establishing a comprehensive sustainability disclosure
framework to systematically improve or optimize their ability to identify, manage and disclosesustainability-related risks and opportunities.
1.2.2 EU and the US introduce climate-related disclosure requirements compatible with the TCFD
framework
In November 2022, the European Financial Reporting Advisory Group (EFRAG) submitted
the first set of 12 draft European Sustainability Reporting Standards (ESRS) to the European
Commission for adoption. Building on the TCFD, the ESRS require companies to disclose theirstrategy and business model, climate scenario analysis, Scope 3 greenhouse gas emissions, as wellas value chain-related sustainability risk assessment, greenhouse gas emissions, labor, community
impact, and product and service information. Based on the double materiality principle, companies
11are required to disclose both their impact on sustainability issues (environment, society, employees,
human rights, anti-corruption and governance) and the impact of sustainability issues on thedevelopment, performance, and financial condition of companies.
In March 2022, SEC published proposed rules for climate-related disclosure by US publiccompanies6. The proposal imposes strict requirements on US public companies to report information
on greenhouse gas emissions and climate-related risks. US public companies are required to reporttheir Scope 1 and 2 greenhouse gas emissions and get independent third-party attestations toenhance climate-related disclosures. SEC officials said most companies listed on the S&P 500 index
may be required to report greenhouse gas emissions from their supply chains and consumers.
1.2.3 China accelerates sustainable development, with HKEX taking the lead in aligning withinternational standards
China is at the stage of voluntary disclosure plus mandatory disclosure by some companies. In
December 2021, the Ministry of Ecology and Environment issued the "Measures on the Managementof Environmental Information Disclosure for Companies". Focusing on companies with highenvironmental impact and public concern, the Measures require the disclosure of environmental
information in accordance with the law by key emission units, corporates implementing mandatory
cleaner production audits, listed companies that meet the prescribed circumstances, debt issuing
corporates and other entities. For example, key emission units are required to disclose eight types of
information, including information on corporate environmental management, pollutant generation,
treatment and emissions, and carbon emissions. In June 2022, SASAC issued the "Measures for theSupervision and Administration of Energy Conservation and Ecological Environmental Protectionof Central Enterprises". It is required that central enterprises should actively implement the conceptof green, low-carbon, and circular development, incorporate energy conservation, ecologicalenvironmental protection, and the strategic orientation and target requirements of carbon peaking
and carbon neutrality into enterprise development strategies and plans, develop orderly around themain business, and develop the energy conservation, environmental protection and other green
and low-carbon industries. China actively participates in the global promotion and adoption ofsustainable disclosure standards and strives to align with international sustainable development
6

SEC Proposes Rules to Enhance and Standardize Climate-Related Disclosures for Investors (US Securities and Exchange Commission)

12

rules. The Ministry of Finance and China Securities Regulatory Commission (CSRC) both submitted
feedback on the ISDS exposure drafts. On December 31, 2022, ISSB and the Ministry of Financejointly announced the establishment of an office in Beijing, which is expected to start operations in
mid-2023.
In June 2022, the Hong Kong Green and Sustainable Finance Cross-Agency Steering Group
noted that as a priority, the Securities and Futures Commission (SFC) and the Hong Kong Exchanges
and Clearing Limited (HKEX) were evaluating a climate-first approach to implement the ISSB
standards for Hong Kong listed companies. HKEX has incorporated several key recommendations
from TCFD into the ESG reporting requirements and conducted its fifth review of ESG disclosures in
November 2022, coming up with key recommendations on board governance of ESG issues, social
issues, and climate change. In terms of climate change, it is recommended that issuers shouldcommence the planning and building of the necessary infrastructure and systems for climate
reporting requirements in the future.7 Meanwhile, the Hong Kong Green and Sustainable Finance
Cross-Agency Steering Group has announced its intention to make climate-related disclosures in linewith the TCFD framework mandatory by 2025.

7This refers primarily to the findings of the latest review of issuers' environmental, social and governance (ESG) disclosures published by
Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX),
on 25 November 2022.
13

2. A panorama of CDP disclosures and CDP
development trends in 2022
2.1 The number of global and Chinese CDP disclosures continues to grow at
a high rate, with an annual growth rate of over 40%
More than 18,700 companies worldwide disclosed climate change-related environmental information
through CDP in 2022, an increase of 42% in relation to last year; among them, more than 2,700 companies in
China (including Hong Kong, Macao and Taiwan) participated in CDP climate change-related environmental
information disclosure, an increase of 43% year over year.
Figure 1: Global and Chinese CDP disclosure trends from 2020-2022
18,636

43%

42%
38%

13,124

32%

9,526

2020

2,723

1,902

1,446

2021
Global

2022

2020

2021

2022

China

Among the 2,723 Chinese companies that responded to the climate change questionnaire, 2,580
companies submitted responses to their customers and 368 companies submitted responses to theirinvestors or submitted responses independently. Overall, Chinese companies participating in climatechange disclosures are more driven by the purchasing power of their customers. On the one hand, asa major manufacturing country with high-quality and stable output, China is favored by global buyers
and has an important role in the global supply chain; on the other hand, increasing impacts of adverse
climate, tightening environmental regulations, and volatile energy prices have led to an urgent needfor international brands to find more climate-resilient suppliers as partners to implement a low-carbon
transition in business.
More than 95% of the companies invited by investors to participate in the CDP disclosures arelisted companies. In 2022, 376 companies in Mainland China, Hong Kong, Macau and Taiwan were14

invited by investors to participate in CDP disclosures on environmental issues, a significant increaseof 68% over last year. This is mainly due to two reasons: firstly, investors are increasingly pushingfor disclosure and expanding the scope of invitations; secondly, companies' own disclosure andmanagement awareness has increased and the response rate has improved.
However, overall, the number of Chinese listed companies participating in CDP disclosures islower than the global average. While major markets around the world have introduced or are explicit
about the forthcoming introduction of "mandatory environmental information disclosure" requirements,
Chinese mainland is still at the stage of "mandatory + voluntary disclosure". Due to the differencein market environments in terms of policy, in 2021, the disclosures by listed companies in China
accounted for less than 10% of the overall CDP disclosures, compared to the global average of about
25%. In 2022, the percentage of disclosures by listed companies in the overall CDP disclosure in China
increased to 14%, narrowing the gap with the global average (27%).

2.2 CDP together with other parties continues to drive response to climatechange in China and globally
Globally, besides Europe, the U.S., Singapore, Brazil, etc., the number of economies requiring
mandatory disclosure has further increased, and relevant requirements have been further enhanced.
The European Sustainability Reporting Standards (ESRS), submitted for adoption in June 2023, requirecompanies to disclose not only financial information, but also their impacts on the environment. These
apply to the entire value chain of companies, thus having global impacts. In this context, CDP stands
ready to support companies in making the disclosures required by the law through the CDP disclosure
platform, to encourage companies to be better prepared for the future. In China, in the second half of2022, CDP China participated in the development and delivery of the TCFD course of the United Nations
Sustainable Stock Exchange (UNSSE) initiative, and delivered an online course to companies listed on
the Hong Kong Stock Exchange and Shenzhen Stock Exchange, to improve companies' understandingof disclosure requirements and enhance their disclosure capabilities.
In 2022, at COP27 CDP announced that S2 will be included in the CDP disclosure platform from2024 onwards. Since 18,700+ companies representing half of global market capitalization disclose
data through CDP, the move means that the standards may be rapidly extended to about 20,000
companies worldwide. Therefore, this paper analyzes the research results in light of the requirementsof the draft ISDS. Another positive action by CDP in the process of standardizing and digitizing
basic climate data is the announcement of the creation of a Net Zero Data Public Utility (NZDPU). In
15

November 2022, CDP announced that it would work with the Climate Data Steering Committee (CDSC)
in an effort to provide the underlying data for the NZDPU. In China, CDP China will work with the ISSB
Beijing office, which will begin operations in mid-2023, to provide support to companies in China anddeveloping economies to make information disclosures.
To make disclosure easier for SMEs and other businesses, in 2021, CDP partnered with theInternational Chamber of Commerce (ICC) and the Exponential Roadmap Initiative to create a modular,
open framework that resulted in the production of a bespoke questionnaire set shorter than the full
CDP questionnaire. The brief questionnaire has just over 40 questions on climate, deforestation risk,
and water security, making it easier for disclosers to understand than the full CDP questionnaire.
After a successful pilot involving hundreds of companies, in 2022, CDP completed the adaptation of
the questionnaire for SMEs, which CDP is now rolling out for banks. When it comes to supply chains,
SMEs are a critical part of the picture. While the full CDP questionnaires have worked well for theworld's largest companies, SMEs typically need something shorter, simpler and with no prior assumed
sustainability knowledge, albeit still aligned to TCFD. This development will facilitate disclosure by SME
clients of banks or SME suppliers of large clients. In 2022, CDP delegated some of the questions in
its questionnaire to the Hong Kong Green and Sustainable Finance Cross-Agency Steering Group for
custom development of a questionnaire for local SMEs in Hong Kong. CDP also facilitated two capacity
building activities to guide SMEs on their disclosure journey and help financial institutions tackle thechallenge of accessing climate and environmental data from their SME clients. Globally, this is one ofthe deepest collaborations between CDP and regulators.
The COP15 of the UN Convention on Biological Diversity took place in December 2022. For the
first time, CDP included questions on biodiversity in its questionnaire, revealing that companies haverecognized the importance of it but have not yet taken significant practical actions. In September
2022, CDP announced that it would expand the scope of the disclosure system and that from 2023
companies would disclose against new questions and metrics on plastic, initially through the water
security questionnaire. CDP is uniquely positioned to scale disclosure, standards, and existing bestpractices across the global economy. CDP is keen to discuss further with various partners on how
to leverage the CDP disclosure system to accelerate implementation of the new Global Biodiversity
Framework and track progress against its targets.

16

3. Analysis of the CDP questionnaire
responses by Chinese companies and key
findings
Based on the analysis of the results of the 2022 CDP questionnaire for Chinese companies anddrawing on the TCFD framework, this report identifies the following four key findings:
1. Governance: Chinese companies attach a high degree of importance to climate governance,with over 70% of them having board-level climate governance. Yet, less than 50% provide salary
incentive measures for managing climate issues and targets, which may result in unclear authority
and responsibility for climate governance and inadequate incentives in some companies.
2. Strategy: Over 60% of Chinese companies are aware of the implications of climate-related risks
and opportunities on their strategies and finance, while only about 1/3 of them incorporate theissue of climate change into their strategic consideration. Chinese companies were significant
underperformers in pushing their suppliers into involvement with climate governance when wecompared the involvement rate of their suppliers to the global average. Those findings indicatethat most Chinese companies are currently improving their awareness of climate change andpractical actions need to be further strengthened.
3. Risk management: More than 70% of Chinese companies have built procedures for assessing
and managing climate-related risks and opportunities. However, less than 20% of them
identified chronic and systematic climate risks respectively. Chinese companies are at the
beginning stage of managing climate risks, and efforts are needed to develop a comprehensive
and systematic approach to identifying, assessing, and managing such risks, and also integrate
climate risk factors into their overall risk management system.
4. Metrics & targets: Over 70% of Chinese companies have disclosed their Scope 1 emissions.
For Scope 3 emissions, that figure was significantly lower, with less than 20% of companies
having disclosed them (from purchased goods and services), indicating that the accounting
and disclosure of carbon emissions upstream and downstream the value chain needs to befurther strengthened. There is great enthusiasm among Chinese companies to set up carbon
reduction targets with nearly 60% of them having established absolute or intensity objectives.
In contrast, less than 10% has depicted long-term net zero targets, reflecting the lack ofambition of Chinese companies to set long-term carbon reduction targets.
17

3.1 Governance: improving top-level design
Companies gradually formulate their climate governance structures
The 2022 CDP questionnaire asks Chinese companies whether there is board-level oversight ofclimate-related issues within their organization, and finds out that 77% of Chinese companies haveboard-level climate governance, reflecting the importance Chinese companies attach to it. At thesame time, the ISDS exposure draft has also proposed disclosure requirements on the governancestructure, the clarity of which will determine the overall awareness of climate governance and its
performance by a company. According to PwC's 26th Annual Global CEO Survey - Asia Pacific8, 46%
of Asia Pacific CEOs prioritize climate change in business activities. This trend is most obvious inAustralia, China, Japan, New Zealand, and Singapore. With 27% of Asia Pacific CEOs saying that theircompanies will be exposed to the threats of climate change in the next five years and 17% sayingthat such exposure will take place in the next 12 months, the importance and urgency of climate
governance is growing among senior management in the China region.
Figure 2: Board-level participation in climate governance by Chinese companies in 2022

Yes
77%

No
23%

Companies urgently need to integrate climate considerations into their performance andremuneration management system
The 2022 CDP questionnaire asks companies if they offer incentives for the management ofclimate-related issues, with 45% of Chinese companies providing salary incentive measures for
managing climate targets, and 34% of them indicating that they plan to introduce such measuresin the next two years. The ISDS exposure draft contains detailed disclosure requirements on
how companies monitor progress in setting and implementing targets related to significant
climate-related risks and opportunities, including the linking of relevant performance indicators
to remuneration. “Measures for the Supervision and Administration of Energy Conservation and
8

PwC, Leading in the new reality: 26th Annual Global CEO Survey - Asia Pacific, released in January 18, 202218

Ecological Environmental Protection of Central Enterprises” 9 released by SASAC of the StateCouncil in 2022 requires that the results of the assessment and evaluation of energy conservationand ecological environmental protection of central enterprises should be included in the businessperformance assessment system for the heads of central enterprises. With increasingly clear
policies and standards guiding Chinese companies, it is expected that they will further improve theeffectiveness of performance and remuneration management in climate governance.
Linking climate-related performance to salary incentives is key to implementing climate
governance in companies, so as to drive action by managers, responsible departments, andemployees. Climate performance incentives can be provided through long-term incentive schemes
and should be integrated into existing human resource management systems. Companies shouldsystematically plan their governance system, sort out their climate governance structure, define theresponsibilities at each level, and agree on the specific objectives of each responsibility, so that they
have the basic conditions to design their salary incentives.
Figure 3: Percentage of Chinese companies providing salary incentive measures
for managing climate targets in 2022

No, plan to provide such measures
within 2 years
34%
Yes
45%

No, do not have any plan to provide suchmeasures within 2 years
21%9

Measures for Supervision and Administration of Energy Conservation and Ecological Environmental Protection of Central Enterprises
released by the State-owned Assets Supervision and Administration Commission of the State Council has been effective since August2022
19

3.2 Strategy: enhancing climate assessment
Thirty percent of companies integrate climate change into their business strategy and financial planning
The 2022 CDP questionnaire has investigated the impact of climate-related risks andopportunities on the business strategy and financial planning of Chinese companies. It finds outthat 31% of Chinese companies have incorporated climate change into their business strategy and
36% incorporated climate change into their financial assessment. As international and domesticorganizations and markets further promote sustainable development, and the ISDS exposure
draft proposes that an entity should be required to disclose strategies for climate-related risks andopportunities, it is increasingly important for Chinese companies to consider climate issues at thestrategic level. However, Chinese companies currently lack clear guidelines and analytical tools fordisclosure, and some have not even established relevant professional teams, which can collaborate
with professional third-party partners to develop their climate strategies. The net zero transformation
services provided by PwC help companies analyze the current state of climate change, assess thecapabilities needed to transform their business, identify strategic options, develop a business case,and adjust their operating model10 to develop a sound and efficient climate strategy roadmap. In thepath of climate strategy transition, companies also need to understand and develop green financial
products, properly identify climate-related strategic opportunities, and drive the greening of value
chains. Chinese companies can work with professional institutions to get support in policy andmarket analysis, management experience sharing, and low carbon technology introduction.

Figure 4: Percentage of Chinese companies considering climate change in theirstrategies and financial assessments in 2022
Percentage of Chinese companies considering climatechange in their strategies in 2022

Percentage of Chinese companies considering climatechange in their financial assessments in 2022

No
69%
Strategies inany area or
areas affected31%

10

PwC, Building Blocks of Net Zero Transformation

20

Yes
36%

No
64%

Twenty percent of companies apply scenario analysis to identify climate risks and opportunities
In the 2022 CDP questionnaire responses, 61% and 49% of Chinese companies identified thestrategic and financial implications of climate-related risks and opportunities respectively, indicatingthat some Chinese companies have considered climate risks and opportunities prior to the official
release of the ISDS. In their climate risk and opportunity identification process, 23% of Chinesecompanies have conducted qualitative or quantitative climate scenario analysis. Climate scenario
analysis is one of the most important tools to help companies effectively identify and analyze therisks and opportunities presented by climate change. At its core is the construction of climate andenvironmental risk transfer models to assess how climate-related risks are transferred to a company.
The ISDS exposure draft requires companies to use scenario analysis to conduct climate resilienceassessments, disclosing the results of the climate resilience analysis and the process used. In caseunable to use such scenario analysis, it requires companies to explain in detail the techniques andmethods used to assess climate resilience. Scenario analysis is based on certain climate knowledge,
models, data, and analysis, and poses a great challenge to the data integrity, data granularity, andprofessional competence of companies. Therefore, Chinese companies are in urgent need of
improving their own capabilities in this regard or seeking external consultancies.

Figure 5: Percentage of Chinese companies identifying climate-related risks andopportunities and using scenario analysis in 2022
0%

10%

20%

30%

40%

50%

Identifying climaterelated risks to strategy
and finance

70%

61%

Identifying climaterelated opportunities tostrategy and financeConducting scenario
analysis

60%

49%

23%

21

A few companies promote emissions reduction in the upstream supply chain
According to the findings of the 2022 CDP questionnaire on Chinese companies promoting
emissions reduction in the value chain, 70% are already addressing climate governance with partsof their value chains, with half of them engaging their clients in climate governance, but only 28%
doing so with their suppliers, which is lower than the global figure of 39%. According to PwC's 26th
Annual Global CEO Survey - Asia Pacific11, when asked about threats, Asia Pacific CEOs stated thatover the next 12 months they will be particularly exposed to inflation, macroeconomic volatility,and geopolitical conflict; however, when considering threats in the next five years, climate seems
to be progressively impacting operations of companies in the Asia Pacific region through a cycle ofdisruption of supply chains and inventory.
Figure 6: Percentage of companies involving climate governance intheir value chains in 2022
0%

10%

20%

30%

40%

50%

60%

Number/percentage
of companies
involving climate
governance intheir value chains

80%

70%

Number/percentage
of companies
involving theirclients in climate
governance
Number/percentage
of companies
involving their
suppliers in climate
governance

70%

54%

28%

The current drivers of supply chain emissions reduction by Chinese companies are limited dueto the lack of economic benefits that this might bring. The Implementation Plan for Promoting Green
Consumption12 issued by the National Development and Reform Commission and other departments has
systematically designed an institutional policy system to promote green consumption, comprehensively
promote the green transformation of consumption in key fields, and continuously improve standards
related to green products. The maturing market of green consumption is expected to create new market
opportunities for green products, driving companies to integrate emissions reduction initiatives across
11
12

22

PwC, Leading in the new reality: 26th Annual Global CEO Survey - Asia Pacific, released on January 18, 2022
The National Development and Reform Commission and other departments, Implementation Plan for Promoting Green Consumption,
released on Jan 18, 2022.

the value chain. According to the CDP questionnaire, 13% of Chinese companies already offer low carbon
products or services. Currently, the supplier emissions management of most companies focuses only
on supplier screening and capacity building, with only a few companies covering data collection13. In thisregard, if Chinese companies want to seize the opportunities of green consumption, they need to step up
their efforts to strengthen specific work in various aspects of emissions management of their suppliers,
for example, by linking carbon data in the upstream and downstream supply chain and incorporating
environment-related performance into supply chain management.

3.3 Risk management: improving management framework
Most companies have integrated climate-related risks into their risk management processes
The 2022 CDP questionnaire surveys Chinese companies on their climate risk management
processes. It finds out that 72% of Chinese companies have built procedures for identifying,assessing, and managing climate-related risks and opportunities. In the management framework
proposed by the ISDS exposure draft, stakeholders of a company need to understand how thecompany's climate-related risks are identified, assessed, and managed, and whether they areintegrated into existing risk management processes. Building on the integration of climate-relatedrisks into their processes, Chinese companies can further improve their climate risk management,
establish a risk control mechanism covering ex-ante, ex-interim, and ex-post factors, integrate
climate risk management with enterprise risk management, build a comprehensive risk management
system, and develop specific climate risk management tools.

Figure 7: Percentage of Chinese companies with procedures for identifying, assessing,and managing climate-related risks and opportunities in 2022

Yes
72%

No
28%

13

CDP, Charting a Path Forward to Net-zero: A Research Report on the Opportunities and Challenges Faced by Listed Companies in the
Chinese Mainland and Hong Kong in Relation to Decarbonisation, released in December 2022.
23

Chinese companies need to systematically identify, assess, and manage climate-related risks
The 2022 CDP questionnaire asks Chinese companies to identify risks with the potential to havea substantive impact on their business. Among the eight types of transition risks and physical risks
collected, acute physical, current regulation, market, and emerging regulation are the types identified
most often in the climate-related risk assessments by Chinese companies, reflecting that Chinesecompanies are more concerned about some short-term risks at this stage, such as the impact of
extreme weather events on their finances and strategies. Less often identified are transition risks
that have more direct impact on companies, such as current policy, shifts in market supply anddemand, and upcoming policies; Chinese companies pay less attention to chronic physical risks thatlag behind the current impact and more indirect transition risks, such as reputation and technology,
with less than 20% of them identifying such risks.

Figure 8: Climate-related risks identified by Chinese companies in 2022
36%

Acute physicalCurrent regulation

30%

Market30%

Emerging regulation

27%
19%

Chronic physical
Reputation

12%

Technology

11%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Overall, Chinese companies are still at the early stage of climate risk awareness andmanagement and need to further develop a comprehensive and systematic approach to climate
risk identification, assessment, and management. Developed countries, particularly those in Europe,
have been aware of climate risk for a long time, and some companies have been concerned about
the impact of climate risk after the adoption of the Kyoto Protocol almost 20 years ago. At present, aseries of management tools and scenario analysis guidelines for climate risk have been establishedacross the world. Compared to the 50 to 70 years it will generally take for developed countries to24realize carbon neutrality after reaching peak carbon emissions, China has only 30 years between
the planned transition from peak carbon to carbon neutrality, so the transition risks for Chinesecompanies are even more severe. Chinese companies can systematically manage climate risk by
taking into account their own realities and drawing on existing international climate risk assessment
methodologies. Firstly, companies need to establish a baseline and objectives to enable their
management or board of directors to understand climate risks as early as possible, analyze the gaps
between their practices and international disclosure standards and regulatory requirements, and be
informed of the progress of the practices of peer companies, on the basis of which they can set up
a roadmap for climate risk management that suits them. Secondly, companies need to identify andanalyze climate-related risks and opportunities. At this stage, companies need to identify and analyze
climate risks by industry, region, and business unit through proper quantitative or qualitative scenario
analysis, and to build internal capacity for climate risk assessment. Lastly, companies need tointegrate climate-related risks and opportunities into their risk management framework and climate
risk factors into their current risk control system. For major climate risks, companies should further
study and develop response strategies and set corresponding climate risk monitoring indicators.

3.4 Metrics and targets: proactively expanding the scope
Nearly 70% of companies have set up climate-related targets, but only 10% have set net zero targets
The 2022 CDP questionnaire asks companies about the setting of net-zero targets, carbon
emission targets and other climate-related targets. It finds out that 68% of Chinese companies haveset climate-related targets, of which 59% have set absolute or intensity emissions reduction targets,and only 10% have set net-zero targets. More Chinese companies have set emissions reduction
and climate-related targets, reflecting their proactive actions in the context of China's carbon
peak and neutrality commitments and long-term action on climate change. However, for the longterm systemic project of "net zero emissions", companies face key challenges, such as difficulties
in collecting data on Scope 3 emissions, limited influence on value chain emissions reduction,difficulties in accessing low-carbon energy, high comprehensive costs of low-carbon transition, lackof clarity of local emissions reduction policies, etc.14 impeding their efforts to set net zero targets.
Demonstrating climate leadership in the industry is one of the key drivers for companies to commit
to net-zero emissions. 15
14
15

CDP, Scoping Out: Tracking Nature Across the Supply Chain – Global Supply Chain Report 2022, released in March 2023.
CDP, Charting a Path Forward to Net-zero: A Research Report on the Opportunities and Challenges Faced by Listed Companies in the
Chinese Mainland and Hong Kong in Relation to Decarbonisation, released in December 2022.

25

Figure 9: Climate-related targets set by Chinese companies in 2022
68%

70%
59%

60%
50%
40%
30%
20%
10%
0%

10%

Net zero target

Carbon reduction
targetAny climate target

Case studies: Lenovo Group Limited16
Lenovo has set its targets of greenhouse gas emissions reduction. The targets coveremissions from Scope 1, 2 and three categories of Scope 3 (use of sold goods, purchased
goods and services, and upstream transportation and distribution).
Lenovo has established Science-Based Targets and has made its immediate goals
public through the website of Science Based Targets initiative (SBTi): Lenovo is committed
to reducing Scope 1 and 2 GHG emissions by 50% in absolute terms by FY2029/2030,
using FY2019/20 as the base year; within the same target timeframe, Lenovo is committed
to reducing GHG emissions by 25% from each of the three categories of Scope 3, namely,
the use of sold goods (laptops, desktops and servers), purchased goods and services, andupstream transportation and distribution.
Lenovo's roadmap to achieve these goals includes: progressive optimization ofclimate change KPIs and assessment processes; collection of climate-related information;
development of climate change incentive policies, etc. Meanwhile, through its CDP supply
chain membership, Lenovo collects environment-related information from suppliers andassesses their environmental performance, and continuously tracks the environmental
performance of the supply chain and the progress of its goals.
16

26

Source: Lenovo 2022 CDP Climate Change Disclosure

Seventy percent of companies disclose carbon emissions data, but less than 20% of them disclosesuch data for Scope 3 purchased goods and services
In the 2022 CDP questionnaire, findings state that 75% of Chinese companies disclose Scope 1
emissions and 58% disclose Scope 2 emissions. These proportions are essentially the same as thosein 2021. Sixteen percent of Chinese companies have disclosed carbon emissions from purchased
goods and services in Scope 3, a slight increase over the proportion in 2021. Compared to the global
average of 36% included in the CDP Global Report, the percentage of Chinese companies disclosing
emissions in the upstream supply chain is still lower. On the one hand, Chinese companies are still
unaware of the measurement of the environmental impact of their supply chains; on the other hand,the difficulties in traceability of Scope 3 data and the lack of uniform disclosure requirements, emission
accounting methods, and carbon emission factor databases have led to a lack of overall Scope 3
emissions disclosure and inadequate data quality. The SEC's proposed climate disclosure rules for
US-listed companies, the ISDS exposure drafts, and the EU ESRS all require participating institutions
to disclose their Scope 1, 2 and 3 GHG emissions and emissions intensity. As Chinese companies go
global and align with international standards, they need to gradually build and improve their carbon
accounting and disclosure capabilities, establish carbon emissions data collection mechanisms, anddevelop tools, templates and carbon management systems to track and manage carbon emissions
data effectively.
Figure 10: Respective proportions of Chinese companies disclosing Scope 1, 2,
and 3 emissions (from purchased goods and services)
0%

10%

20%

30%

40%

50%

60%

80%
75%

Scope 1

75%

57%

Scope 2

Scope 3(purchased
goods &
services

70%

58%

13%
16%
36%
2021 China

2022 China

2022 Global

27

Chinese companies implement various emissions reduction initiatives to save energy and reducecarbon emissions
In 2022, 66% of Chinese companies are taking active emissions reduction initiatives, a significant
increase from 44% in 2021. The total number of emissions reduction initiatives has increased
significantly in line with the increase in the number of companies participating in CDP disclosure(see Section 2. The number of Chinese companies participating in CDP climate change-related
environmental information disclosure increased by 43% over 2021), with an increase of almost 50% in
2022 compared to 2021. Energy efficiency in production processes and energy efficiency in buildings
account for nearly half of the emissions reduction initiatives undertaken by Chinese companies,
indicating that Chinese companies are taking more practical actions to reduce carbon emissions while
decreasing operating costs through energy savings and consumption reduction. Among the major
emissions reduction initiatives, the adoption of company policy or behavioral change has increased
significantly compared to 2021, accounting for 17% of all emissions reduction initiatives. More Chinesecompanies have established corporate management systems for implementing emissions reduction
actions, which will help to further systematically promote the long-term and in-depth low-carbon
transition. The implementation of emissions reduction initiatives is a long-term project for companies.
They can usually start with systematic planning to identify specific emissions reduction initiatives,prioritizing the implementation of these through an analysis of financial benefits and carbon reductions,and finalizing the implementation of actions through specific carbon reduction projects.

Figure 11: Types of emissions reduction initiatives implemented by Chinese companies
2021

2022

18%

20%
32%

28%
7%

8%
10%
10%
20%
10%

28

20%

17%

Improving energy efficiency inproduction process

Company policy or
behavioral change

Use of low carbon
energy in production

Energy efficiency in buildings

Waste reduction andmaterial recycling

OthersCase studies: Cscec International Construction Co., Ltd 17
China State Construction Engineering (Hong Kong) Limited (CSHK) releases the "Carbon
Neutral Commitment for the Construction Period of Organic Resource Recovery Centre Phase II"(O.PARK2), committing to achieve carbon neutrality during the construction period of O.PARK2.
The project of Organic Resource Recovery Centre Phase II (O.PARK2) incorporates the conceptof sustainable development and is designed to gain a Platinum rating under the BEAM Plus rating
system. Measures include maintaining 40% of the original plants on site and replanting trees
throughout the slope, increasing the green area by 50% by building gardens and urban farms on
the roof of buildings to integrate the buildings into the surroundings and reduce the impact onlandscape. The project also uses renewable building materials and energy efficient technologies tominimize carbon emissions during its entire lifecycle. To calculate the expected avoided emissions,the project used the operational control approach to determine the organizational boundary andcovered the time period from 5 September 2019 to 31 August 2021. During the project period thecompany used low carbon building materials, such as up to 100% recycled steel and metal iron, as
well as concrete with ground granulated blast-furnace slag (GGBS) as a replacement for 60% of
cement, which is expected to avoid emissions of 18,337 metric tons of carbon dioxide equivalent
per functional unit when compared to the reference product/service or baseline scenario. The
revenue generated from this green low-carbon project accounted for 0.2% of total revenue forthe reporting year and the company believes that this approach can be extended to all types of
construction projects.

Companies need to pay more attention to internal carbon pricing mechanisms
Only 3% of Chinese companies responding to the 2022 CDP questionnaire use internal carbon
pricing, and 23% of companies indicate that they would not establish an internal carbon pricing
mechanism in the next two years. However, in its section about the cross-industry metric categories,
the ISDS exposure draft has specific requirements for companies to disclose internal carbon prices:on the one hand, a company is required to disclose the price for each metric tonne of greenhousegas emissions that it uses to assess the costs of its emissions; on the other hand, a company isrequired to disclose how it is applying the carbon price in decision-making (for example, investment

17

Source: CSCEC International, CDP Climate Change Disclosure in 2022
29

decisions, transfer pricing and scenario analysis). The ISDS exposure draft also gives a specificdefinition of internal carbon price, i.e., "Price used by entities to assess the financial implications ofchanges to investment, production and consumption patterns, as well as potential technologicalprogress and future emissions-abatement costs." There are two types of internal carbon prices. The
first type is a shadow price, which is a theoretical cost or notional amount that the entity does not
charge but that can be used in assessing the economic implications or trade-offs for such things
as risk impacts, new investments, net present value of projects, and the cost-benefit of various
initiatives. The second type is an internal tax or fee, which is a carbon price charged to a businessactivity, product line, or other business unit based on its greenhouse gas emissions (these internal
taxes or fees are similar to intracompany transfer pricing). Internal carbon price is an effective toolof a company for managing and promoting a low-carbon transition, and the process of setting it
up needs to be continually validated and tested through corporate practice, to arrive at a carbon
pricing model that fits the company's carbon targets and reduction path. Chinese companies should
pay more attention to internal carbon pricing, mobilize their departments to reduce emissions by
establishing internal carbon pricing mechanisms, achieve their own emissions reduction targets
more effectively, avoid the risks of climate change and seize more business opportunities brought
about by climate change.

3.5 Brief summary
Chinese companies can draw on the TCFD framework and plan holistically along four pillars:
governance, strategy, risk management, and metrics and targets.
Companies take concrete actions through climate-related risk and opportunity governance.
Governance requires, on the one hand, the involvement of the board of directors, elevating the work
to the high level of decision-making; on the other hand, it is necessary to establish a governancestructure and assign specific responsibilities to the corresponding departments and employees.
The effective functioning of the governance structure requires appropriate salary incentives, andthe alignment of responsibilities and rights in climate governance contribute to the systematic
implementation of climate governance. In the future, Chinese companies will need to strengthen
their governance structures and promote the establishment of supporting mechanisms, such as
remuneration policies, to help implement climate governance actions.

30

By incorporating climate change into their strategies, companies can prevent and manage therisks of climate change, and at the same time seize the business opportunities that it presents.
The basis of a climate strategy is the identification of climate-related opportunities and risks
and the quantification of the resulting financial impact to support strategic decisions. Chinesecompanies need to consider adopting scenario analysis to systematically analyze the climate risks
and opportunities they face under their current strategies. At the same time, companies should
identify the business value of driving climate actions in the value chain and integrate the low-carbon
transition of the value chain into the approaches of their climate strategy.
Climate risk management in a company is a systematic effort, and implementing it in thespecific processes is an important step in driving a systematic response to climate change. Chinesecompanies should learn from international climate risk assessment methods, set a roadmap for
future risk identification, assessment, and management, improve corporate capabilities for climate
risk assessment, identify and analyze the climate risk factors they are facing, develop assessmentand monitoring metrics, and integrate climate risk management into the overall corporate risk
management.
Companies need to put climate governance into practice by setting specific climate-related
metrics and targets. On the whole, Chinese companies are currently on a relatively weak footing interms of Scope 3 carbon emissions disclosure, internal carbon pricing and net zero target setting.
The quality of the disclosure of metrics and targets can be gradually improved by continuously
consolidating the accumulated data base, strengthening internal and external capacity building,mobilizing suppliers to participate in emissions reduction actions, and establishing a data collection
and monitoring system.
Given the gap between the current status of carbon information disclosure by Chinesecompanies and the requirements of TCFD and ISDS exposure drafts, it is recommended thatcompanies should develop a climate information disclosure management team and establish aninternal climate information disclosure system as soon as possible, and gradually improve theirclimate information disclosure system from such aspects as board-level oversight, climate risk
and opportunity assessment, carbon emission management and climate target setting, in order toenhance their climate resilience and capabilities for sustainable development.

31

4. Case Study

4.1 Ping An Insurance (Group) Company of China 18
Background
Founded in 1988 in Shekou, Shenzhen, Ping An Insurance (Group) Company of China, Ltd.,
emerged as the pioneering publicly traded insurance company in China. Over time, it has transformed
into one of the country's three leading integrated financial conglomerates. In light of China's dual carbon
targets, the Group has proactively worked to drive carbon neutrality and sustainable development
across the nation. It has established green finance development goals and a comprehensive 2030 planfor operational carbon neutrality, with the aim of achieving net zero emissions of greenhouse gases,
including carbon dioxide, within its own operations. It also explores avenues for carbon neutrality in its
asset portfolio. To better turn the principles of sustainable development into actions, it has launched afive-year agenda focusing on sustainable development initiatives.
Climate governance
Ping An has implemented a four-tier governance structure, with the Board of Directors at thehelm, to supervise and manage climate change and carbon neutrality concerns. Each level of theorganization has governance mechanisms designed specifically for climate-related affairs. Throughongoing improvements in the management and regular reporting mechanisms of ESG practices andrisks, it ensures timely dissemination of climate risk management objectives, plans, implementation
progress, and outcomes to the Board of Directors and management. This approach enables more
effective climate risk management within the company.

18

32

Source: Ping An Group's 2022 Sustainability Report12: An's
Ping An's
governancestructuresustainable Development
development
FigureFigure
12: Ping
Governance
Structure
forforSustainable
Strategylevel

Board of Directors

Oversee all ESG issues and be
responsible for the strategicplanning of sustainable
development, risk management,
policy making and progress
review.

Strategy and investment Committee

Management
level

Group Executive Committee

Be responsible for the managementof core ESG issues such as green
ﬁnance, and rural revitalization,
as well as the Group's external
communication and publicity
concerning sustainable development.

Sustainable Development Committee

Execution
level

Group ESG Oﬃce
ESG Taskforce (CSR/IR/PR/Group Functional Representatives）

Coordinate sustainable
development work inand outside the Group.

Group Function Units
Practice level

Branding & PR, Brand Oﬃce, HR, Finance,
Planning, Asset, Management, Inter Control,
Procurement, Others
Insurance
Investment
Banking
Technology

MemberCompanies

Execution Matrix

Ping An Group Execution Matrix

Climate-related risks and opportunities
Ping An identifies climate-related physical and transition risks and uses publicly accessible
scenarios to analyze climate scenarios, strengthen assessment and management of climate-relatedrisks, and plan the roadmaps for emissions reduction.
Figure 13:
Climate-relatedrisks
andandopportunities
An
Figure13: Climate-related
Risks
Opportunitiesfor
forPingPing An
Risk Type

Physicalrisks

Climate Risk
Factors

Risk
Categories

Risk Examples

Time Horizon

Business
Segments
Involved

Magnitudeof Impact

Climate disasters

Operationalrisk• Climate disasters may cause physical losses to the physicalassets in the affected areas, resulting in asset impairment.

Long term

The whole Group

Significant

Climate change

Credit risk

• Climate change leads to business loss of specific clients.

Medium tolong term

Banking, asset
management, etc.

Minor

New economic
policies on
low-carbon
transition

Credit risk,
market risks,etc.

• If the government issues new policies to support low-carbon
transition, high-emission economic activities will be underpressure, and low-carbon industries may benefit from themove. The policies may have a positive or negative impact on
the business of specific clients.

Medium tolong term

Banking, asset
management, etc.

MediumEmerging lowcarbon
technologies

Credit risk,
market risks,etc.

• Emerging low-carbon technologies rapidly take over themarket, while the development of clients in traditional sectors
is hindered.

Medium tolong term

Banking, asset
management, etc.

MediumFluctuating

Credit risk,
market risks,etc.

• The cash flows of high-emission clients are affected by thefluctuation of carbon prices.

Medium tolong term

Banking, asset
management, etc.

Significant

Higherenvironmental
standards

Credit risk,
operationalrisk, market
risks, etc.

• Higher standards for energy use in buildings may require moreinvestments in renovation for the purposes of energy
conservation and environmental protection

Short term

The whole Group

Significant

Concerns ofinvestors

Reputationrisk• With the increasing public concerns for climate change andgreen and low-carbon development, inconsistency of thecompany's business models with the trend of low-carbon
economy may impair the corporate reputation and affectrating results.

Long term

The whole Group

MediumTransition prices in the
carbon market
risks

33

The company has incorporated climate-related risks into the Group's ESG risk management,
building a full management process - advance, intermediate and afterward - risk management
mechanism. This mechanism is specifically tailored to the different assets within the organization.
To improve its risk prevention and governance performance, it has integrated ESG's core theories
and standards with the Group's risk management practices and relied on such strategies as theimplementation of a dual control model that involves both the Group and its member companies,
the adoption of ESG integrated risk management approaches, and the provision of a unified ESG
management system along with dedicated management tools.

Key measures
Developing low-carbon buildings: Ping An's Scope 2 emissions, primarily attributed topurchased electricity, constitute 87.5% of its total operational emissions, surpassing those of Scope
1 or 3 emissions. To realize its 2030 carbon neutrality goal set for its operations, it started withbuildings. For instance, when constructing a commercial building in Shenzhen, it employed a 'freecooling' system, heat recycling system, high-performance elevation design and other cutting-edge
technologies, resulting in a remarkable 46% reduction in energy consumption. In Beijing, guided
by the design philosophy of "Green, Energy-saving, Low-carbon, and Environmentally Friendly",
it promoted energy-conservation and emissions reduction while ensuring optimal comfort andpractical functionality in its commercial buildings.
Cutting office-related emissions: In 2022, Ping An 's total paper consumption amounted to1,559 tons. During the same period, it launched a series of campaigns to minimize office supply
wastes and reduce operational emissions, which garnered significant participation from its major
office buildings. These efforts involved promoting double-sided printing, adopting online paperlessprocessing systems, relying more on online conferences, and encouraging improved office behaviors,
resulting in a reduction in office-related carbon emissions.
Transitioning from brown assets to a green future: Ping An plans a cut or phase-out of its
investments in brown assets to facilitate the achievement of its low-carbon targets and transitionof its asset structure to a green future. The Group has made it clear that its future financial support
will be correlated with transition roadmaps and targets, imposing stringent thresholds, and listing
management systems on various aspects of the four industries with the highest carbon emissions.
Promoting investments in green assets: To promote the development of global green economy,
Ping An prioritizes and focuses its investments on assets that remove carbon dioxide.

34

In September 2022, the company launched green bonds funds, aimed at supporting
the growth of renewable energy-based electricity generation in countries along the Road
and Belt. These funds will add an additional 181 MW of electricity-generating capacity fromrenewable sources, bringing their total capacity up 71,770 MWh while cutting 135,012 tonsof CO2 emissions.

4.2 Yanfeng 19
Background
The Shanghai-based Yanfeng Automotive Interiors (YFAI) operates 82 plants and technology
centers across 17 countries with 27,000 global employees. The company designs, develops,
and manufactures automotive interiors and exteriors for all carmakers. It considers sustainable
development as a cornerstone of its global corporate strategy. It places particular emphasis on
carbon neutrality, greenhouse gas emissions reduction, and development of lightweight productportfolios to enhance fuel efficiency and minimize landfill waste. Moreover, the company collaborates
with Schneider Electric, Sphera, iPoint, and the Responsible Supply Chain Initiative (RSCI) and otherorganizations to effectively work towards achieving its carbon neutrality goals.
Climate governance
YFAI has established a Sustainable Development Committee, led by the CEO as the chairman,
who is responsible for assessing and managing climate-related risks and opportunities, reviewing risk
management policies, reporting significant risks, and making informed decisions. The global climate
risk managers are appointed to coordinate and manage risks on a regional level, providing regular
reports to the CEO. The regional risk managers are assigned to assess risks specific to their respective
regions. Additionally, the Sustainability Council, consisting of multiple functional departments, such as
procurement, R&D, operations, finance, human resources, legal, IT, and public relations, collaboratively
defines sustainable development metrics and encourages its members to take actions within theirrespective sectors so as to facilitate the implementation of lighthouse projects.

19

Source: YFAI's 2022 CDP Climate Change Disclosure and 2021 YANFENG Corporate Social Responsibility Report
35Figure 14: Climate-related Risks and Opportunities for YFAI

Figure 14: Climate-related risks and opportunities for YFAI
Risk Type

Climate Risk
Factors
Current regulation

Transition
risk

Science andtechnology

Reputation

Risk Examples

Time Horizon Magnitudeof Impact

Solutions

The company faces various
legal frameworks as it
Medium term
operates across over 12
countries.

Medium• Develop energy management plans to save energy.
• Follow international standards to set specific targets for reducing
energy consumption.

Technology holds the key
to the success of its
business models.

Medium term

Medium tohigh• Product and service R&D.
• Regularly receive customer feedback.
• Develop lightweight solutions.

It places greater importanceon corporate image andnegative feedback from its
stakeholders.

Short term

Medium tolow• Identify customers' needs for sustainable development andclimate strategies.
• Conduct climate-related risk governance.

The company has included climate metrics as part of its employee incentive mechanisms by
integrating the Scope 1 and 2 carbon emissions reduction targets for the 2020-2023 period into its
long-term incentive plan for its senior management team. It also provides financial incentives for
EHS managers who successfully meet energy-saving goals and obtain ISO 50001 certification. To
further rise energy efficiency, it has introduced the Energy Hunt Program, which encourages theactive involvement of all factory employees in this effort.
Climate-related risks and opportunities
After assessing acute physical, chronic physical, current regulation, emerging regulation, scienceand technology, laws, market and reputation, and other physical and transition risks, YFAI has taken
targeted measures.
The company also recognizes the identified risks as potential climate-related business
opportunities. It actively engages in renewable energy projects, implements energy efficiency
measures, innovates its products and services, and adapts to market shifts that proceed from theevolving consumer preferences. It promotes its climate-related risk and opportunity management
system to global organizations and constantly enhances its effectiveness.
Setting climate goals
Guided by the dual-carbon strategy, YFAI aspires to Scope 1 and Scope 2 carbon neutrality by
2030 and a 50% reduction in Scope 3 emissions (upstream supply chain). At the same time, it has
set its sights on comprehensive global carbon neutrality by 2040. In addition to these overarchinggoals, it has also established specific targets related to energy consumption and energy efficiency.
By 2030, it aims to ensure that renewable energy sources account for 100% of its total energy
consumption. In 2020, it also set a target to improve energy efficiency by 3% annually across all its
global automotive interiors manufacturing areas.
36Key measures
Internal operation: in 2022, thanks to improved resource efficiency and adoption of renewableenergy, YFAI reduced its Scope 2 emissions by 217,152 tons, a 22% drop from that of last year.
Use of renewable energy: YFAI has collaborated with global partners on six solar panel projects.
One notable project involved the installation of 1,373 solar panels on the roof of the Neustadt factoryin Germany, estimated to generate approximately 532,000 kWH of electricity annually. In 2021, theautomotive supplier utilized a total of 48,000 square meters of solar panels worldwide. By 2022,
renewable energy had become the exclusive power source for all its European factories.
Enhancing resource efficiency: YFAI has taken a range of measures to improve resource
efficiency in its daily production. One example is that it globally sourced 3,736,160 kilograms ofrecyclable materials. Since it applied the proprietary Compression Hybrid Molding (CHyM) process,the company was able to save 1,600,000 kilograms of plastic for 6,000,000 door panels produced
worldwide, compared with conventional manufacturing methods.
Raising employees' awareness about carbon reduction: To achieve the sustainable
development goals designed for its business units and the entire company, YFAI has implemented
the Energy Hunt Program across its global interior factories, encouraging active participation from all
employees. As part of the program, one energy-saving advocate will be appointed within each factoryand provided with specialized training. These advocates play a vital role in driving the program's
success by regularly communicating performance and progress updates.
Across the entire value chain: With the help of carbon footprint monitoring tools, YFAI
effectively engages with customers and suppliers, offering more sustainable solutions and reducing
emissions at all stages of the value chain.
Product carbon footprint accounting: Apart from company-level climate mitigation measures,
YFAI introduced product carbon footprint software for its automotive interior products in 2021 to
improve its environment reporting at the product level. This software allows the company to measure
the carbon footprints of various interior applications and provide data support to downstream
customers for carbon accounting purposes.
Developing sustainable products: As an automotive interior manufacturer, YFAI is committed
to developing sustainable products. For example, the company has developed a sustainable steering
wheel that reduces carbon monoxide equivalent emissions by over 95% per kilogram during production.
Its environmentally friendly interior decorations incorporate recycled fabrics that are 100% recyclable,
and its lightweight design of dashboard crossbeams reduces weight up to 50%.
Evaluating suppliers' climate-related performance: To deepen collaborations with suppliers,
YFAI has identified sustainable development as a key part of its procurement process and an
essential criterion in evaluating supplier performance. To date, the majority of its direct suppliers37have successfully undergone this process. It also organizes an annual Yanfeng Outlook Day event
where suppliers are introduced to current and future sustainable development initiatives, along withcollaborative opportunities.

4.3 Zhongxing Telecommunication Equipment Corporation (ZTE) 20
Background
ZTE Corporation is a global provider of telecommunications and information technology.
Founded in 1985 and listed on both the Hong Kong and Shenzhen Stock Exchanges, the company has
been committed to providing innovative technologies and integrated solutions for global operators,
enterprise customers, and individual consumers from over 160 countries, serving over a quarter ofthe global population. The company adheres to the concept of "Innovation, Convergence, and Green
Development" throughout its product lifecycle, from R&D to production, logistics, and customer
services. It has been releasing the sustainability report/CSR report to the public since 2009 as well as
participating in CDP climate disclosure since 2008. To tackle the challenges posed by the low-carbon
transition, it has paved a green path to the digital economy by promoting green operations, green
supply chain, green digital infrastructure, and empowering the green development of industries to help
operators and industrial consumers transition to a green, low-carbon, and sustainable future.

Climate governance
ZTE has established an organizational structure for sustainability within the company. At the top
level, its Board of Directors reviews the company's annual sustainable development strategy, major
projects, and related work plans, and regularly discusses reports from the Sustainable Development
Management Committee to ensure that the company's sustainable development goals are achieved.
The Sustainable Development Management Committee comprises the senior management membersof the company, including the Executive Vice Presidents, Chief Operating Officer, and Chief Strategy
Officer. The committee implements the decisions of the company's Board of Directors on sustainable
development in terms of the environment, society, and governance, guards the company against
relevant risks, and reports the work progress to the Board of Directors on a regular basis. Under thecoordination of its Human Resources Department, the Sustainable Development Working Groupconsists of representatives from all units within the company (Compliance, Strategy, Finance and20

38

Source: ZTE's 2022 CDP Climate Change Disclosure and 2021 ZTE's Sustainability ReportAccounting, Supply Chain, Securities, Quality, Learning and Development, Marketing, R&D, Branding,
Cybersecurity, Operations Management, and ZTE Foundation). The working group reports ESG
information to the Sustainable Development Management Committee and provides necessary
information for decision-making. It also guides and supports the units in executing sustainable
development strategies and decisions.
Figure 15: The sustainability governance framework of ZTE
Board of Directors
Sustainable Development Management Committee
Sustainable Development Working Group
Optimizing
Governanceto Prevent
Operational
Risks

Staying awayfrom Redlines
and Adhering
to Compliancein Operations

Leading with
High-End
Talent andSupporting
Employee
Development

Empowering
Industries
ThroughInnovation
and Building
the Foundationof Digital
EconomySecuring
Customers'
Trust with
Openness andTransparency

PromotingGreen
Development
to Tackle
ClimateChangeUpholding
Win-WinCooperation
to Grow with
Partners

Shouldering
CSR toContribute to
the Global
Community

Climate-related risks and opportunities
Identifying climate-related opportunities from product and service R&D: ZTE's customers,
including major telecom operators both internationally and domestically, have stringent requirements
for supply chain and product energy efficiency. They expect suppliers to set emissions reduction
targets, demonstrate progress in emissions reduction, offer energy-efficient products, and disclose
carbon footprints. ZTE understands that setting emissions reduction and energy efficiency goals
not only helps the company save costs but also attracts and retains customers with needs for
low-carbon development, thereby enhancing its overall market competitiveness. To capitalize on
these opportunities, it has strategically restructured its former Digital Energy Product Operation
Department. By integrating power electronics, energy storage technology, cloud technology, andartificial intelligence, it aims to rapidly digitize its energy and develop innovative energy-saving
products and services. Furthermore, it has increased its R&D investments in energy efficiency,
operations, and low-carbon innovation within its production to enable its production process to be
low-carbon and highly energy-efficient.

39

Setting climate goals
ZTE Corporation has clearly set its ambitious goals to reach "carbon peak" by no later than 2030 andachieve "carbon neutrality" by no later than 2060. Acknowledging the immense challenges of the lowcarbon transition, ZTE is strategically developing green solutions for enterprise operations, supply chain,digital infrastructure, and industry empowerment to drive the progress toward its dual carbon goals.

Key measures
Green operations: Since 2021, ZTE has been inviting external certification agencies to conduct
annual on-site inspections within the company and to verify its global greenhouse gas emissions inaccordance with the ISO 14064 standard. It has also provided relevant carbon emission data in its
annual sustainability report.
Green supply chain: ZTE collaborates with partners across its global value chain to establisha "green supply chain", focusing on energy conservation and emissions reduction in raw material
selection, material recycling, and logistics and transportation. The company requires its suppliers
and partners to adhere to the environmental and social responsibilities.
Green digital infrastructure: ZTE is actively working towards minimizing its infrastructure
carbon footprints by deploying green sites and data centers. Firstly, in the construction ofcommunication network energy infrastructure, it has introduced the concept of a new "zero-carbon"
energy network and promoted its application through the adoption of green energy sources.
Secondly, in the design and implementation of site products and solutions, it has integrated lowcarbon and environmentally friendly principles, such as reducing resource waste and promoting
smart collaboration, to establish green sites. Thirdly, it has developed digital solutions like UniSite+,PowerPilot, and iEnergy, which have been widely deployed in operator networks worldwide, effectively
supporting energy conservation and consumption reduction.
In addition, it is dedicated to the development and provision of eco-friendly products. This
includes using recyclable phone packaging, designing smart devices with low energy consumption,
as well as building high-performance data centers. Environmental protection requirements havebecome an integral part of its conceptual design, performance appraisal, design finalization, andproduct certification processes, establishing a full-lifecycle management system for green productsthat intends to reduce carbon emissions during product sales and use.
Empowering the green development of industries: ZTE continuously drives ICT innovationand collaborates with industry partners to explore green application scenarios. It launched its own
40green energy strategy in 2021, demonstrating its commitment to promoting green energy. With over
500 green innovation patents, it consistently improves efficiency, reduces energy consumption, andcontributes to building a green and low-carbon society through technological innovations. Moving
forward, it will further strengthen its basic research efforts in new energy, new materials, and newcomponents, striving for key technological breakthroughs. By promoting the extensive adoption ofdigital technologies across various sectors for sustainable development, it will ultimately achievecarbon neutrality.

41

5. Prospects

There is a growing global consensus on addressing climate change and protecting ourenvironment. As part of its efforts in global governance and in building a shared future for mankind,
China's commitment and actions in this regard are essential for the great rejuvenation of the Chinese
nation. In its 20th National Congress report, the Chinese government highlighted the pursuit of a"modernization of harmony between humanity and nature" as one of the five defining characteristicsof China's modernization. Consensus turns into actions only when information is disclosed.
Comparable corporate environmental information applying increasingly consistent standards will
provide key data foundation for shaping carbon policies and managing green investment portfolios
and green supply chains.
Climate and environment legislation are becoming increasingly stricter in the European andUS markets, with a wider coverage of mandatory disclosure and more rigorous requirements.
One example is the EU's Corporate Sustainability Reporting Directive (CSRD), which applies to an
enterprise's global supply chain and companies trading securities in the EU market, and mandates
reporting on the environmental impact of corporate activities. Consequently, certain Chinesecompanies may be affected. The Chinese mainland currently has voluntary and mandatory
disclosure mechanisms running in parallel. But research has commenced on developing Chinesespecific standards for sustainability information disclosure. Within this context, Chinese businesses
shall stay informed about and understand the evolving information disclosure requirements set bypolicymakers and investors regarding the environment, climate, and nature conservation and gain
deeper insights into environment disclosure practices to prepare for compliance.
The global sustainability disclosure standards are converging and becoming increasingly
compatible. Recent sustainability disclosure standards introduced by major countries and regions
demonstrate a strong alignment with the TCFD framework and regard climate risks as an importantconsideration. The ISDS (draft), which is built on existing international disclosure requirements,
encompasses the four pillars of the TCFD disclosure framework. This initiative is supported by
China and other G20 members. As a platform that has consistently adopted mainstream disclosure
standards, CDP is committed to contributing to the standardization and digitization of essential
42

climate data. Following the comprehensive integration of the CDP questionnaire with the TCFD
framework in 2018, during COP27, CDP announced that it is to incorporate ISSB's climate-related
disclosure standards into its disclosure system starting from 2024. This move ensures that nearly
20,000 companies worldwide, which have already disclosed through CDP will be exempt from
duplicative disclosure, effectively reducing their compliance costs. Chinese companies can use the
CDP questionnaire to proactively familiarize themselves with international mainstream disclosure
standards and make early preparations.
Regarding environmental disclosures and management of impact on environment, Chinesecompanies have made continuous improvements, offering the international community Chinese
wisdom and solutions in combating climate change. Notably, some top-notch Chinese companies
have moved beyond mere on-request disclosure and have proactively leveraged CDP to establish
and manage their global green supply chains. By doing so, they aim to catch up with global leading
counterparts by empowering their supply chains to play a more extensive role in decarbonization,
thereby gaining a competitive advantage in this new international arena.
The year 2023 must be a year of accelerated action as we strive to achieve the arduous taskof limiting global warming to 1.5°C. On the domestic front, the journey towards achieving "carbon
peak" and "carbon neutrality" is faced with numerous challenges, necessitating collaborative efforts
and collective actions. The Chinese president Xi Jinping once said, "Charge at the toughest and aim
at the farthest", which means to take on the biggest challenges and go after the most ambitious
goals. Looking ahead, CDP is looking forward to fostering broader and deeper cooperation withstakeholders in China, working together to drive transformations in combating climate change andprotecting biodiversity to build a greener, more prosperous, and sustainable future.

43

6. Appendix (CDP methodological framework& technological standard updates)
CDP facilitates companies in promoting the transparency of their environmental actions, scaling
up their environmental efforts, and embracing accountability through its standard questionnairesystem, which embraces three different types of questionnaires: the climate change questionnaire,
which focuses on companies' response to climate change risks and their efforts in emissions
reduction; the forests questionnaire, which addresses companies' management of deforestation
risks and improvement of traceability in commodity supply chains; and the water security
questionnaire, which highlights companies' water security risks and enhancement of water efficiency
in their operations. The dimensions contained in these questionnaires have been aligned with thereporting framework recommended by the TCFD, covering Governance, Strategy, Risk Management,
and Metrics and Targets. As a result, CDP now has a TCFD-aligned environmental database.
Table 16: The relationship between the climate change questionnaire and TCFD's recommendations
Dimension

TCFD's Recommendations for Disclosure

Governance

Provide board-level supervision information on climate-related risks
and opportunities.
Provide management-level responsibilities on assessing andmanaging climate-related risks and opportunities.
Provide the short-, medium-, and long-term climate-related risks andopportunities identified by organizations.

Strategy

Provide the implications of climate-related risks and opportunities onan organization's business, strategies, and financial planning.
Provide resilience to an organization's strategies, considering
different climate scenarios including those relevant to 2°C or below.

CDP Climate
Questionnaire
C1.1b; C1.2; C1.2a

C2.1a: C2.3: C2.3a;C2.4; C2.4a: C3.1: C3.2;
C3.2a; C3.2b; C3.3; C3.4;
C-ES3.7; C-FS3.7a

Provide the procedures to identify and assess climate-related risks.
Risk
management

Provide the procedures to manage climate-related risks.
Provide how the procedures for identifying, assessing, and managing
climate-related risks could be integrated into an organization's overallrisk management activities.
Disclose the metrics applied by an organization when it assesses
climate-related risks and opportunities through its strategies and risk
management procedures.

Metrics andtargets

Disclose information on Scope 1, 2, and 3 (if applicable) greenhouseemissions and relevant risks.
Provide an organization's targets on climate-related risks andopportunities management and progress toward them.

44

C2.1; C2.2; C2.2a;
C-FS2.2b; C-FS2.2c;
C-FS2.2d; C-FS2.2e

C4.1; C4.1a; C4.1b;
C-FS4.1d; C4.2; C4.2a;C4.2b; C6.1; C6.3; C6.5;
C6.5a; C9.1; C-FS14.0;
C-FS14.1; C-FS14.1a;
C-FS14.1b; C-FS14.1

CDP provides a general questionnaire for each of the three themes (Climate Change, Forests,
and Water Security), along with industry-specific questionnaires tailored to sectors with significant
environmental impact, taking into account their unique characteristics. In addition, CDP has
developed comprehensive scoring methodologies for each questionnaire, encompassing basescores and score weights for each grade.
Questionnaire scoring is conducted by accredited scoring partners trained by CDP. Its internalscoring team then collates all scores, running data quality checks to ensure that scoring standards
are accurate and consistent.
CDP ranks participating companies within their global industry peers based on four ascending
levels: (1) Disclosure (D-/D), (2) Awareness (C-/C), (3) Management (B-/B) and (4) Leadership (A-/A).
These four levels present their progress in the journey of environment management.
CDP upholds the principles of voluntary, public, and transparent disclosure. The methodologies,
which are subject to annual updates, are publicly accessible on its official website and can beobtained free of charge. Additionally, companies' annual ratings are shared with invited investors andprocurement customers through the platform. Companies have the flexibility to decide whether topublicly disclose their ratings on the CDP official website, in accordance with their own discretion.
By participating in annual environmental data disclosure, companies can reap various benefits.
They can enhance their reputation, move ahead of market regulatory requirements, strengthen theircompetitive advantage, identify environmental risks and opportunities, track and measure progress,
and lower financing costs. Research indicates a positive correlation between higher environmental
performance scores and improved financial results among companies. Notably, over the past eight
years, the "STOXX Global Climate Change Leaders Index", which is based on the CDP's 'A-List', hasdelivered an average annual return 5.8% higher than other comparable indices21.

21

The date is based on the aggregate performance (total returns) of the STOXX Global Climate Change Leaders Index and the STOXXGlobal 1800 Index between December 19th, 2012 and November 17th, 2021.
45

Acknowledgements

CDP would like to express its sincere gratitude to the companies and partners involved in the
consultation during the preparation of this report. Its appreciation also goes to PwC China for theirinvaluable support in the preparation and publication of this report. The report was co-authoredby CDP China and PwC China with each party holding the copyrights and other related intellectual
property rights for their responsible sections of the report and subsequent revisions.

46

47

Authors
CDP China

PwC China				

Wu Furong (Flora Wu)

Cai Xiaoyin (Amy Cai)

CDP China Country Director

PwC China ESG Managing Partner

flora.wu@cdp.net

amy.cai@cn.pwc.com

Li FeiNi Qing

CDP China Associate Director

PwC China ESG Markets Leader

Fei.li@cdp.net

qing.ni@cn.pwc.com

Gui Xuan

Wang Ying (Mendy Wang)

CDP China Lead of Corporates and Supply

PwC China ESG - Climate and Sustainability

Chain

Partner

xuan.gui@cdp.net

mendy.wang@cn.pwc.com

CDP China

Cui Junlian

Room 1902, Tower A, Beijing Wanda PlazaPwC China ESG - Climate and Sustainability

No. 93 Jianguo Rd, Chaoyang District

Senior Manager

Beijing 100022

junlian.cui@cn.pwc.com

Tel: +86 (0)10 5820 3261
Shi Kangjie
PwC China ESG - Climate and Sustainability
Senior Associate
kangjie.k.shi@cn.pwc.com
Wang Yiyang
PwC China ESG - Climate and Sustainability
Associate
ian.yb.wang@cn.pwc.com
48