2021 Research Report on sustainable development actions of enterprises in China From China International Chamber of Commerce & PricewaterhouseCoopers

The following is the 2021 Research Report on sustainable development actions of enterprises in China From China International Chamber of Commerce & PricewaterhouseCoopers recommended by recordtrend.com. And this article belongs to the classification: PWC, research report.

Core discovery 1: the focus of sustainable development goals of enterprises has shifted from the social level to the economic level

Compared with the 2019/20 baseline report, in the post epidemic era, enterprises in China pay more attention to the sustainable development goals * from the social level (sdg1, 2, 4, 5) to the economic level (sdg8, 9, 11, 12). Among the top five sdgs, environmental issues have also received extensive attention. Climate action (sdg13) ranks among the top five sdgs for the first time, which shows the determination of enterprises in China to cope with climate change and commit to green and low-carbon transformation.

The above changes are inseparable from the impact of the external macro environment. Under the epidemic, economic and social recovery encourages enterprises to think about how to balance sustainable and long-term prosperity while economic development, which will help enterprises choose and promote sustainable economic models, such as responsible consumption and production, scientific and technological innovation, etc. (sdg9, 11 and 12). At the same time, changes in consumer behavior and policy orientation will also encourage enterprises to promote sustainable communities, supply chain management and scientific and technological innovation.

In addition, among the sustainable development goals that Chinese enterprises will pay attention to in the next five years, only the first and second priorities have changed slightly, which reflects that enterprises have begun to pay attention to long-term sustainable and prosperous development. At the same time, enterprises have also recognized the importance of climate change and low-carbon transformation. Climate action (sdg13) ranked among the top five for the first time, up 3 places from last year. Industry, innovation and infrastructure (sdg9), sustainable cities and communities (sdg11) and responsible consumption and production (sdg12) topped the list, indicating that the company is committed to more sustainable lifestyle, value chain and technology innovation. In addition, enterprises hope to promote decent work and economic growth (sdg8) and recover from the impact of the epidemic as soon as possible.

Core finding 2: there are obvious differences in the priority sustainable development goals in different industries, and the economic related goals are more than last year

The six industries give priority to different sustainable development goals due to their different business models, value chains and market development trends (Figure 2). Climate change has been paid attention to in traditional high carbon emission industries (manufacturing, transportation and logistics, energy, construction and mining). At the same time, the attention to sustainable supply chain and industrial innovation in this industry is also increasing; Guided by policy and market, the financial industry gives priority to responding to climate change and pays attention to new wind directions such as carbon market, climate change and new energy; The retail industry is still consumer centered, focusing primarily on health and welfare and ensuring product quality. Compared with the baseline report project, the priority of the two social goals of health and well-being and high-quality education in the six industries has decreased, while responsible consumption and production and industrial innovation are among the best.

Core finding 3: strategic drive and brand positioning are the main motivation for enterprises to implement sustainable development goals

The report shows that 94% of the surveyed enterprises are willing to implement the sustainable development goals, and the rest are still in the wait-and-see stage. The driving factors for enterprises to promote sdgs can be divided into four categories. From the survey results, the key factors for enterprises in China to implement sdgs are strategic growth and brand positioning:

Strategy driven: win market share or keep in line with the increasingly obvious sustainable development trend in the future.

Risk management: measure uncertainties such as policy changes and transition risks, and predict their impact on business.

Brand positioning: integrate sustainability as a part of brand positioning to create a good brand image in consumers and the market.

Asset management: maximize the market value of listed companies and attract external investment through ESG practice.

Core finding 4: in the next five years, enterprises will pay more attention to integrating sustainable development into the strategic level

Compared with the baseline survey, the surveyed enterprises are more willing to implement sustainable development goal projects or management in the next five years. 68% of the surveyed enterprises will integrate sdgs into various business decisions from the perspective of enterprise strategy, and keep consistent with the specific business objectives; 60% of enterprises plan to design and evaluate the impact of specific sdgs on relevant businesses, so as to measure and report the development of enterprises; 41% of enterprises will report and disclose management or project practices around sdgs, an increase of 118% over last year’s baseline report.

The report contains a “double carbon column” to help enterprises with low-carbon transformation

Since the announcement of the “30.60 double carbon goals” in September 2020, the Chinese government is successively issuing a number of regulations and guidelines to promote sustainable development and low-carbon transformation. The findings of the report also directly reflect the impact of the dual carbon policy on enterprises. The climate action (sdg13) jumped 3 places, entered the top five most concerned goals for the first time (Figure 2), and will continue to bring business opportunities to enterprises in the future. Therefore, the joint investigation team decided to open a new double carbon column according to the climate action (sdg13) to discuss the actions of enterprises in response to the double carbon goals, hoping to help enterprises identify risks and opportunities and help enterprises move towards low-carbon transformation.

Highlight of the column: Chinese enterprises are highly concerned about and sensitive to carbon policies, and actively try to carry out low-carbon actions

More than 80% of the enterprises surveyed said that the double carbon target had different degrees of impact on the company’s revenue. Among them, high emission industries (manufacturing, transportation and logistics, energy, construction and mining) are often strictly regulated due to their high emissions and high pollution, so they are more affected by relevant policies. At the same time, 76.8% of the enterprises have taken low-carbon actions, including carrying out carbon inventory, setting carbon neutrality and net zero goals, implementing low-carbon technologies, carrying out low-carbon operation management and developing foreign cooperation projects. Similarly, the proportion of low-carbon actions taken by high carbon emission industries is significantly higher than that of low carbon emission industries.

Key challenge 1: enterprises in China still lack effective guidelines for evaluating sustainable development goals

Although 97.2% of the surveyed enterprises expressed their willingness to evaluate the practice related to the sustainable development goals, and the number of enterprises mastering the SDG evaluation increased (by 17.6% compared with last year), most of the surveyed enterprises still lack the ability to effectively evaluate the sustainable practice. More than 80% of the surveyed enterprises are still in the planning stage of sustainable development goal assessment. 39.4% of the surveyed enterprises planned to evaluate the sustainable development goals related to their own business, and the other 43% of the surveyed enterprises planned but did not know how to evaluate. Among the surveyed enterprises that have not yet mastered the evaluation method, 81.6% believe that the main reason is the lack of relevant industry guidance, while 51.0% believe that the main reason is the lack of internal talents.

Key challenge 2: enterprises lack the motivation to publicly disclose sustainable development practices

In the phase II report, 55.6% of the surveyed enterprises have publicly disclosed their own sustainable development practices, which is no increase or decrease compared with the data in 2019. 31.9% of the surveyed enterprises disclosed their sustainable development practices in ESG or CSR reports, an increase of 4.9% over 27% in 2019. From the perspective of specific industry attributes, listed companies and top 500 enterprises have good disclosure practices due to their high attention from stakeholders and more internal and external policy supervision.

Key challenge 3: enterprises need more public policy guidance and financial support to promote low-carbon emission reduction

82% of the surveyed enterprises hope to be encouraged by the industry’s low-carbon policies and financial subsidies in order to carry out low-carbon actions. In terms of industrial policies, enterprises need more explicit guidance on low-carbon measures; In terms of financial subsidies, more enterprises hope to provide financial incentives to key carbon reduction enterprises; In terms of carbon trading, enterprises hope to optimize the relevant policies of strong emission control and voluntary carbon market at the same time; In terms of financing policies, enterprises prefer to use monetary tools to provide financing for carbon reduction projects and better promote low-carbon transformation.

Future recommendations

In order to seize the first opportunity in the sustainable development market and effectively respond to the existing key challenges, PwC has put forward relevant suggestions from the aspects of enterprise management and operation strategy to the support of specific measures for enterprises’ reference:

Strategic level: actively study the development trend of industrial policies, clarify the enterprise’s own concept of sustainable development, and incorporate the sustainable development goals into the decision-making process. Enterprises should fully understand and sort out the potential impact of external industry policies on their own operations, and pay attention to the industry-leading practices at home and abroad, so as to plan risk mitigation and identify new market opportunities in advance. At the same time, the enterprise should also manage its own sustainable development direction from a strategic height, clearly formulate sustainable development goals and visions, and the senior management of the enterprise should take the lead.

Strategy level: use the sustainable development goals assessment tool to conduct impact assessment to clarify the effectiveness of key projects or actions. Enterprises can refer to professional assessment guidance platforms such as SDG action manager to quantify the impact of enterprise project practice from different core key indicators at the social and environmental levels. Enterprises can also widely solicit feedback from core stakeholders through questionnaire evaluation, and constantly optimize and strengthen the management of business-related sustainable development goals, project results and influence.

Support level: first, we should strengthen the training management of the concept of sustainability and talents, and expand the reserve of relevant talents. Enterprises should consciously cultivate professionals in relevant fields, so as to effectively build a professional compound talent team, and effectively implement various measures for enterprises to carry out sustainable development business in the future; Second, we should actively carry out foreign cooperation to promote the sustainable transformation of the whole industry. Good sustainable development can not be achieved without the cooperation of a wide range of stakeholders. Whether the upstream and downstream of the industrial chain jointly promote the development of the industry, or cross industrial chain cooperation and collaboration in different fields, they will effectively promote leading practices or initiatives; Third, we should actively communicate with the outside world and disclose the practical achievements of sustainable development, and publicize the leading ideas and industry practices. Enterprises can report their influence on sustainable development to stakeholders through internationally recognized non-financial information disclosure frameworks, such as Global Reporting Initiative (GRI), climate change related financial information disclosure (TCFD), Carbon Disclosure Project (CDP) of global environmental information research center, etc.

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