China ESG - Weekly news update: FTSE Russell confirms China inclusion for flagship global bond index



New ESG reporting metrics released by World Economic Forum


A set of universal environmental, social, and governance (ESG) measures and disclosures released Tuesday by the World Economic Forum is designed to help companies report nonfinancial disclosures. The “stakeholder capitalism metrics,” including ESG indicators and disclosures for financial markets, investors, and society are designed to make benchmarking sustainable business performance easier. 


A World Economic Forum publication encourages companies to report on the full set of metrics in their mainstream reporting. The publication recommends that each company apply its own view of dynamic materiality, reporting on what is deemed material to its business and stakeholders. 


The metrics are centered on four pillars: People: Reflecting a company’s equity and its treatment of employees. Metrics include diversity reporting, wage gaps, and health and safety. Planet: Reflecting a company’s dependencies and impact on the natural environment. Metrics in this pillar include greenhouse gas emissions, land protection, and water use. Prosperity: Reflecting how a company affects the financial well-being of its community. Metrics include employment and wealth generation, taxes paid, and research and development expenses. Principles of governance: Reflecting a company’s purpose, strategy, and accountability. This pillar includes criteria measuring risk and ethical behavior. 


In parallel to this work, the World Economic Forum collaborated with five leading, independent global framework and standard setters to work toward a comprehensive reporting system and a statement of intent that complements the common metrics. Earlier this month, the International Integrated Reporting Council, CDP, the Climate Disclosure Standards Board (CDSB), the Global Reporting Initiative (GRI), and the Sustainability Accounting Standards Board (SASB) announced a shared vision of what is needed to make progress toward comprehensive corporate reporting and the intent to work together to achieve it. 

 

Source: Journal of Accountancy


FTSE Russell confirms China inclusion for flagship global bond index


Index provider FTSE Russell has announced that it will include China onshore sovereign bonds in its World Government Bond Index starting on October 2021, paving the way for more access for global investors into the world’s second-largest bond market.

The index compiler said on Thursday evening that it intends to include Chinese government bonds into its flagship global sovereign bond index next year with pending final confirmation this coming March.


The move could see as much as US$140 billion of investments flowing into China’s onshore bond market given a weighting of 5.7% and US$2.7 trillion that tracks the global government bond index, according to analysis from Goldman Sachs.


Source: Reuters & Ignite Asia



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